Handing PCP Car Back Early

Dan103 · 20 Mar 2018 at 11:33

Basically my current car is on PCP finance and the contract is for 48 months which will end October 2019.

I did originally plan to buy the car out right at the end but my plans have now changed. I currently have a help to buy equity loan scheme due up Summer 2020 and I wont be able to justify paying the balloon payment at the end when the equity loan is due 6 months later.

Having looked at our finances we are going to be short but not too far off. I was thinking if i handed the car back when it turns 3 this October I would just buy a cheap runaround in the mean time and save paying the PCP each month on my current car.(£250.00pm)

Has anyone had experience of handing a car back early? Should I just wait it out?

This is my first financed car so any advice/experience is appreciated

VincentHanna · 20 Mar 2018 at 11:36

https://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/

[TW]Fox · 20 Mar 2018 at 11:44

You can't hand it back without paying extra unless you have paid more than 50% of the agreement which on a PCP you likely won't have done until toward the end of the agreement.

alex24 · 20 Mar 2018 at 11:52

48 month PCP, ouch. If you intended to buy the car there are much better ways I would have thought. You could take a different loan and settle the PCP finance. You’d also be free to sell the vehicle but that depends on the equity situation as to whether that is a good idea. May depend on how much deposit you paid and the terms of the agreement.

On Holiday · 20 Mar 2018 at 11:54

Sell it privately and then pay off the agreement?

[TW]Fox · 20 Mar 2018 at 12:03

Plenty O'Toole said:
Sell it privately and then pay off the agreement?

You can't sell it without permission as it isn't your car and it's likely worth less than the settlement value.

On Holiday · 20 Mar 2018 at 12:10

[TW]Fox said:
You can't sell it without permission as it isn't your car and it's likely worth less than the settlement value.

If you inform them that you are selling with the intention to settle then you can do so.. They'll usually impose a 2 week period to pay them back from the date of sale.
If you sell to a dealer or trader then they'll likely pay the settlement figure direct and send the remaining to the seller.

Settlement will depend entirely on the car and the deal so OP would need to have a look at the market really.

Dan103 · 20 Mar 2018 at 12:18

VincentHanna said:
https://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/

Thanks

[TW]Fox said:
You can't hand it back without paying extra unless you have paid more than 50% of the agreement which on a PCP you likely won't have done until toward the end of the agreement.

Yes based on the above link. and some quick maths (dont have exact paperwork) its going to be around 4 months later, Jan feb 2019 time before 50% has been paid.

alex24 said:
48 month PCP, ouch. If you intended to buy the car there are much better ways I would have thought. You could take a different loan and settle the PCP finance. You’d also be free to sell the vehicle but that depends on the equity situation as to whether that is a good idea. May depend on how much deposit you paid and the terms of the agreement.

My error in first post. I didnt plan on buying it out right when i got the car it was the middle of last year i though i could keep and live with it. Minimum deposit was paid around £200-£300. Balloon Payment is £6k at end

Maccy · 20 Mar 2018 at 12:48

Ask for a settlement figure, advertise it privately for that amount and see if you get any interest? I managed to shift mine after <1 year and sold it for a bit more than the settlement figure.

flea.rider · 20 Mar 2018 at 13:03

do what we did trade it in ...had a gtc on pcp .. yr before it was finished we traded it in and bought a smaller car payments on the gtc were 250ish .. now on a car we will own 180

-Ad- · 20 Mar 2018 at 16:29

Read your contract and see the section regarding voluntary termination after paying off 50% of the total figure. There should be an exact figure stated.

Work out how much you've payed already and the remaining amount required to hit the 50% total mark. Then either keep it up until that point, or terminate it early by making up the shortfall to the 50% mark (E.g. payed £8k of total £10k 50% figure. Hand back today you can pay them £2k and VT the car.

Simples.

mikeh501 · 20 Mar 2018 at 20:24

Just get a settlement figure from the finance company. Sell it, and pay it off. Simples.
(Unless your seling to a dealer, or WBAC; you will need to pay it off before you sell obvs, otherwise nobody would buy it!)

I've never completed a PCP term yet, and have done it many times.

-Ad- · 21 Mar 2018 at 07:57

mikeh501 said:
Just get a settlement figure from the finance company. Sell it, and pay it off. Simples.
(Unless your seling to a dealer, or WBAC; you will need to pay it off before you sell obvs, otherwise nobody would buy it!)

I've never completed a PCP term yet, and have done it many times.

Not soo much fun if you're in serious negative equity, say £5k and don't want to stick out until the end for a balloon payment and the chance of selling for a little money. Then there's the chance of the the car being worth less at the end of the term than the GFV rubbish.

After all that, if you're around the 50% mark, the VT route becomes much more appealing, especially around first MOT and major service time

Dan103 · 21 Mar 2018 at 09:19

-Ad- said:
Read your contract and see the section regarding voluntary termination after paying off 50% of the total figure. There should be an exact figure stated.

Work out how much you've payed already and the remaining amount required to hit the 50% total mark. Then either keep it up until that point, or terminate it early by making up the shortfall to the 50% mark (E.g. payed £8k of total £10k 50% figure. Hand back today you can pay them £2k and VT the car.

Simples.

Checked paperwork last night 50% is 8991.46 and i have calculated that I will have paid 9k at the end of October this year

On that basis come November would i presume i ring the finance company to terminate? It wouldn't be the dealer would it ?

HumanShield · 21 Mar 2018 at 11:52

Dan103 said:
On that basis come November would i presume i ring the finance company to terminate? It wouldn't be the dealer would it ?

Yes, the finance company. I've literally just done the same

Dan103 · 21 Mar 2018 at 12:21

HumanShield said:
Yes, the finance company. I've literally just done the same

Cheers. Were they okay with it or did the drag their heels at all with taking it back early ?

HumanShield · 21 Mar 2018 at 12:53

Dan103 said:
Cheers. Were they okay with it or did the drag their heels at all with taking it back early ?

They have been fine actually, although I still have the car a few weeks after notifying them.

mikeh501 · 21 Mar 2018 at 19:16

didnt realise you were going the VT route. Just be aware of them trying it on with charges etc....

Malt_Vinegar · 21 Mar 2018 at 19:26

Take note of the condition of Everything, take pics and make sure you are there when it is inspected.
Also, as mentioned above, if there is any calculated mileage excess, they will chase you for it.
Legally it is claimed you do not have anything extra to pay in your statutory rights, but they will try.

Ahleckz · 21 Mar 2018 at 22:06

Dan103 said:
Checked paperwork last night 50% is 8991.46 and i have calculated that I will have paid 9k at the end of October this year

On that basis come November would i presume i ring the finance company to terminate? It wouldn't be the dealer would it ?

You can only VT it once you've paid half of the total including interest and fees, so you may find out that's wrong. It's not simply half the cost of the vehicle/once you've paid back half the balance borrowed.

Handing PCP Car Back Early

Transmission breaker