Exiting a PCP - Anyone done it?

Malt_Vinegar

Malt_Vinegar

Malt_Vinegar

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So, I have the option to exit from my PCP deal with BMW finance for a small sum which seems like a decent option, seeing as I wish to move away from finance and go to a cheaper fully owned car.
BMW said this will go on my credit record, and I assume this might make getting car finance again difficult? Is this correct?
It seems odd, seeing as there is no default, and it is a statutory right to be able to exit.

Has anyone exited a PCP, and got finance again later? Did you find it caused you any issues?
 
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Awesome :)
Sounds good. I had found that article, but wanted to find out from people who had done it, and perhaps had problems.
Just running one last advert, and see if I can shift the car for the remaining finance minus less than the exit fee to save me some cash :) Otherwise, I will get getting rid!
 
I exited early from a PCP deal and just handed the car back - I was 2 years into a 3 year deal and the car was worth (inc balloon payment and whatever else I had left to pay) more than I had left to pay... if that makes sense. The 2nd year I did about 3000 miles in it so the milage was way lower than it was "meant" to have been (20k a year).

I was able to just hand back the keys, the dealer "bought" the car back for some amount, basically paying off the finance and then sold it for more than they deemed it to be worth..

Didn't cost me a penny extra and didn't affect my credit rating.
 
I did, a very easy process without penalty. The GFV was less than the market value of the car 16 months in to a 24 month agreement so I simply drove it to Renault and walked away with a cheque.

I couldn't sell it privately, didn't get a single enquiry but a local Renaultsport specialist dealer had a buyer in mind so it was easy money for them.
 
You don't *have* to wait until the 50% is paid back and hand it back to the finance company. If you can find a dealer who's willing to buy it from you for more than the outstanding balance then you can sell it and let them clear the balance on your behalf. I did that with no hassle at all - walked away with a cheque for a few grand. You may be better off doing this than just handing it back
 
If there is a sum involved it doesn't sound like a VT, therefore it has absolutely zero effect on your credit file, you are simply settling an agreement.

If it is a VT (ie you walk away having paid 50% of the value of the agreement) then your credit file will reflect the fact you VT'd. Whether this affects anything in future is entirely down to the lender you next use.
 
Whats the car and whats the settlement figure? If you've paid more than 50%, unless its a heavy depreciator or you got a bum deal, selling it and settling it would probably work out better
 
iaind said:
You don't *have* to wait until the 50% is paid back and hand it back to the finance company. If you can find a dealer who's willing to buy it from you for more than the outstanding balance then you can sell it and let them clear the balance on your behalf. I did that with no hassle at all - walked away with a cheque for a few grand. You may be better off doing this than just handing it back
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i did this too

3 year PCP on Skoda Ocatvia VRS

13 months into it, I got bored, sold it, buyer sent Skoda finance the money outstanding and gave me the extra on top, painless
 
I did this with a Golf, 2.5 years into a 3 year PCP deal. Called VW Finance and talked through my options.

Simply handed the car back and walked away in my case as the terms stated if I was past halfway through the deal I could do just that. Painless. Apart from not having the car of course :p
 
lmfy2k said:
i did this too

3 year PCP on Skoda Ocatvia VRS

13 months into it, I got bored, sold it, buyer sent Skoda finance the money outstanding and gave me the extra on top, painless
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Yep, people here will get caught up on the fact you're not allowed to sell it but in reality it doesnt make a difference if the dealer is settling it for you and giving you cash. You know the dealer is going to settle it because they can't sell a car with outstanding finance plus it'll be settled before the finance company know its changed hands.

If you wanted, you could get permission to sell based on a written offer of a value higher than the settlement - but I didn't bother. Got a letter in the post a few days later from the finance company confirming they have no further interest in the car and thanking me for my business. This will also go on your credit report as paying it off in full rather than terminating - although as Fox said, whether that affects anything is unclear.
 
Malt_Vinegar said:
It is a VT, over 2 years into a 4 year agreement.
sum is just under 1500 to "walk away"
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Why is there a sum due to VT? There should be no balance due to VT unless there is unfair wear and tear on the car surely?

It sounds like it isn't a VT at all, especially as the mid point on a PCP isn't 2 years into a 4 year agreement it's more like 3.5 years into a 4 year agreement because of the balloon at the end.

It sounds like a straightforward settlement rather than a VT.
 
I have no idea.
I called up, and said I would like to hand the car back, what do I need to do?
They said, it would cost me just under £1500 to hand it back. I am assuming this to take me up to the 50% figure?
They also said there would be a record on my credit rating, and then subject to mileage and wear and tear clauses.
 
That is not a voluntary termination.

A VT is where you hand the car back and walk away with nothing to pay even if the value of the car is far below the outstanding finance. The requirement is that you have paid back more than half of the agreement - in value terms, not time times.

I cannot imagine there would be ANY negative impact on your credit file from settling an agreement in this way. It's VT's that the finance firms hate.
 
[TW]Fox;28164555 said:
That is not a voluntary termination.

A VT is where you hand the car back and walk away with nothing to pay even if the value of the car is far below the outstanding finance. The requirement is that you have paid back more than half of the agreement - in value terms, not time times.

I cannot imagine there would be ANY negative impact on your credit file from settling an agreement in this way. It's VT's that the finance firms hate.
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Is it not possible they are just taking a payment to get me to 50% paid, then allowing the VT?

I am confused, and they are now closed :D
 
I'm sure some finance companies will look at "buying" it back in the same way as I've advised. It sounds like you're in negative equity if that's the case - but like I've said several times, if you actually get a settlement figure from them you can look at what the car is worth and maybe get a better deal. As fox said, 50% paid isn't just after 2 years and 1500 quid probably wouldn't bring you to that level anyway
 
[TW]Fox;28164604 said:
Surely you must know what you've paid so far and what the total amount financed was?
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Yes, I do. It is clearly stated on the agreement.

However, I just assumed that was what they sum was for, having not done this before :P

Perhaps I should scan the agreement document, and see what we all think :D

From memory - I entered into the agreement in March 2013, and paid £1250 upfront + £650 for the first payment, then payments of £461 going onwards.

So, again, without checking the paperwork, I make that 26 payments of £461 + £650 and £1250 - £13886 They want 1500 to close it off. That makes - 15386

Total amount payable after interest was circa 28k (excluding balloon payment)
 
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