PCP voluntary termination

[BertBert]

I am mildly considering changing a car that is 3 years in out of 4 on PCP. I haven't fully done the maths yet. To give an idea though, the settlement figure is £9k more than the WBAC/trade in price.

I suspect economically it's a bad idea (no st sherlock). In a year it'll be worth 15% less, so say £14k. I need to refresh my memory of the buy it price, but feels like it is unlikely to be negative equity then.

Anyway, any wise thoughts or experiences of VTs?

[AliMc99]

You can VT once you’ve paid back 50% of total amount borrowed- depends on APR etc but in my experience it is around month 36/37 on a 4 year agreement. I VT’d my F82 M4 with BMW FS with no issues. They will charge you excess mileage prorata.

[Scrubs]

BertBert said:

Anyway, any wise thoughts or experiences of VTs?

It's a pretty simple process once you meet the criteria required. Last time I done it was worried about any impact on any future financing, but there was none.

[andymc]

Scrubs said:

BertBert said:

Anyway, any wise thoughts or experiences of VTs?

It's a pretty simple process once you meet the criteria required. Last time I done it was worried about any impact on any future financing, but there was none.

can you do this on a PCP? HP yes, happy to be corrected

[andymc]

You can end your PCP through voluntary termination once you have paid 50% of the total amount payable. This does not just mean half your monthly payments – it is half of the amount payable over the entire course of the agreement, including interest, fees and the optional final-balloon-payment.

[AddyT.]

andymc said:

You can end your PCP through voluntary termination once you have paid 50% of the total amount payable. This does not just mean half your monthly payments it is half of the amount payable over the entire course of the agreement, including interest, fees and the optional final-balloon-payment.

+1.

Did this on my SQ5 last year. Got rid just ticking over year 3 into 4. No issues whatsoever and a straightforward process. Once I had sent the confirmation e-mail it was final and no going back...which was fine. BCA were in touch around a week later to come and inspect and get the car. Got a badly damaged alloy wheel fixed first (as it absolutely wouldn't have got away with that) but overall the chap was really reasonable as it had done 80k miles. Audi tried to charge for a couple of tiny dents you really would struggle to see and corroded alloys but backed down when I challenged both, especially as corroded alloys due to the mileage was "to be expected" in the BCA guys eyes. Think my total damage cost was £198 which was OK after covering 60k miles in 3 years. Painless experience overall. Does seem to be when you hit the 3 year mark on a 4 year term.

As a sidenote, I did look at changing it for another Audi and they said it was in negative equity by £4k despite the car being within it's 20k miles a year arrangement. Think it was worth £24k and I saw it go up, and sell, for £28k from an Audi dealer which seemed like a lot of money to me for a 6 year old example with 80k miles on the clock but each to their own! Added to the fact you couldn't extend the warranty when it went over 100k miles and there was a lot that could possibly go wrong!

[Scrubs]

andymc said:

can you do this on a PCP? HP yes, happy to be corrected

Yes, once you have paid half of the amount payable over the entire course of the agreement. Some places will also let you contribute what's left to get to the half way point so that you can VT.

[Blue_star]

I am pretty sure pcp vts are all time high due to the large number of evs that are worthless in the second hand market.

[BertBert]

Thanks all,

Just done the sums and I get to the half way point just about dead on the 4 years. Then the final payment will be about £7k above the value of the car at that point (Cupra Born). So I think I'll just carry on for another year and hand it back at the end.

This is one of the scenarios I anticipated 3 years ago that the depreciation would be quite a lot! It's approx 70% in 4 years. Anyway, I'll keep going for another year and decide what next.

Thanks again for the help.

[BertBert]

Blue_star said:

I am pretty sure pcp vts are all time high due to the large number of evs that are worthless in the second hand market.

As mine demonstrates!

[Trevor555]

BertBert said:

Thanks all,

Just done the sums and I get to the half way point just about dead on the 4 years. Then the final payment will be about £7k above the value of the car at that point (Cupra Born). So I think I'll just carry on for another year and hand it back at the end.

This is one of the scenarios I anticipated 3 years ago that the depreciation would be quite a lot! It's approx 70% in 4 years. Anyway, I'll keep going for another year and decide what next.

Thanks again for the help.

Interested in this.

When you took the agreement out, did they say the final payment was a guaranteed future value?

I only ask as I've heard sales people sell it this way, and some even saying the final payment is a guaranteed value, but you're car will probably be worth a little more so you can use that as a deposit for your nect agreement.

Way too much miss selling of these PCP's gone on in the past I reckon.

[BertBert]

Yes it's interesting. I can't remember the details of the conversation. The paperwork calls it "final rental". I am certainly not under the impression that it was anything other than a final payment that could leave some "equity" or not depending on the depreciation. So in that regard I don't feel that it was missold. Or at least I didn't mis-purchase as it's done exactly as I thought on the downside!!

[Trevor555]

BertBert said:

Yes it's interesting. I can't remember the details of the conversation. The paperwork calls it "final rental". I am certainly not under the impression that it was anything other than a final payment that could leave some "equity" or not depending on the depreciation. So in that regard I don't feel that it was missold. Or at least I didn't mis-purchase as it's done exactly as I thought on the downside!!

Good to hear they didn't miss sell the agreement to you.

[HTP99]

AliMc99 said:

You can VT once you ve paid back 50% of total amount borrowed- depends on APR etc but in my experience it is around month 36/37 on a 4 year agreement. I VT d my F82 M4 with BMW FS with no issues. They will charge you excess mileage prorata.

Nope you can VT once you've paid back 50% of the total amount payable.

[BertBert]

HTP99 said:

Nope you can VT once you've paid back 50% of the total amount payable.

I did the sum by taking the car price, subtracting the deposit (and dep contribution) and adding the interest.

That seems to also work with the final payment (and the current settlement value). Take that total, subtract the 4 years' monthlies and it gives the final payment (give or take rounding).

[Blue_star]

BertBert said:

Blue_star said:

I am pretty sure pcp vts are all time high due to the large number of evs that are worthless in the second hand market.

As mine demonstrates!

I bet feels great that you can just return the car. I think we are the only country in the world that has vt.

Would you have kept car otherwise?

[Blue_star]

HTP99 said:

AliMc99 said:

You can VT once you ve paid back 50% of total amount borrowed- depends on APR etc but in my experience it is around month 36/37 on a 4 year agreement. I VT d my F82 M4 with BMW FS with no issues. They will charge you excess mileage prorata.

Nope you can VT once you've paid back 50% of the total amount payable.

I think this website is turning me into a reformboomer.


You can vt at any point you just need to pay 50%.

[Mandat]

Blue_star said:

HTP99 said:

AliMc99 said:

You can VT once you ve paid back 50% of total amount borrowed- depends on APR etc but in my experience it is around month 36/37 on a 4 year agreement. I VT d my F82 M4 with BMW FS with no issues. They will charge you excess mileage prorata.

Nope you can VT once you've paid back 50% of the total amount payable.

I think this website is turning me into a reformboomer.


You can vt at any point you just need to pay 50%.

Can you clarify, is that 50% of the total amount borrowed or the total amount payable.

Asking for a friend.

[Blue_star]

Payable im afraid.

[Sheepshanks]

BertBert said:

Yes it's interesting. I can't remember the details of the conversation. The paperwork calls it "final rental". I am certainly not under the impression that it was anything other than a final payment that could leave some "equity" or not depending on the depreciation. So in that regard I don't feel that it was missold. Or at least I didn't mis-purchase as it's done exactly as I thought on the downside!!

They've changed the name from Guaranteed Final Value to something like Optional Final Payment now. I recall a discussion on a Merc forum where a member was very unhappy that his car was worth less than the GFV - he wanted to keep the car and wanted the dealer to refund the difference!