You can end your agreement and return your car to the finance company as long as:Originally Posted by ryanb741
1. You repay 50% of the Total Amount Payable (not the total amount borrowed, as you need to include interest and fees, and not half of your scheduled monthly payments)
2. There are no damages if you have failed to take reasonable care of the goods (over and above normal wear and tear)
Assuming you have complied with both of the above, you’ll have nothing further to pay.
The Total Amount Payable is the total amount borrowed plus interest and fees. It also includes the Guaranteed Future Value (GFV) on a PCP. This means that you usually don’t reach the voluntary termination point until very late in a PCP agreement. It is not simply the halfway point of your agreement, as that is unlikely to be anywhere near the 50% repayment point on a PCP.
For a regular hire purchase (HP) agreement, you will usually reach the 50% repayment point about halfway through the agreement.
Last edited by redmonaco; 23rd April 2020 at 13:13.
My understanding is that the cooling off period is in relation to the finance taken out, not the vehicle. So in theory you would need to find an alternate way to fund the car. What happens in reality is very likely to be different depending on dealer / circumstances.
The entirety of what you borrowed to buy the car includes the balloon payment, always has done as far as I know.
The supplying dealer doesn’t forego that balloon payment when you buy the car, and it’s also included if you ask for an early settlement figure for the finance.
It’s always there, just as a huge final payment in the repayment schedule.
Your rights under voluntary termination are on the finance agreement, has to be by law.
Hmm, looks like I've mixed up PCP and HP, more info here: https://debtcamel.co.uk/vt-end-car-f...ement%E2%80%9D
There is a guy on a bike forum who regularly VTs his PCP 6 and 12 months into the finance and never seems to have a first service so I'm not sure how he's managing. Call the company, tell them you'd like to VT and wait for the quote. You're not compelled to go ahead with it after receiving a quote.
So you can’t just walk away then? You have to take the car on and finance it some way?
That makes sense as otherwise the dealership will be stuck with loads of cars from people who just change their mind. That said in this situation it must be happening on a huge scale.
That's a separate issue and part of the vehicle order and not the finance agreement. My view is that the finance agreement only starts when the car is collected from the dealership and properly handed over, since this has not happened I don't believe the finance has been taken out , its not like the dealership will have been paid by the finance provider
I wouldn’t be seen dead in a Velar, bargain price or not.
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+1.......that made me smile! It may be the most cost-effective way to finance a new car, but you're still standing the depreciation costs one way or another.........if you the customer isn`t paying the depreciation who is, the tooth fairy? However you dress it up, the depreciation on a £50grand+ vehicle is very significant.
You have 14 days from the activation of the finance to withdraw from the agreement with minimal costs. If you do withdraw you will be obliged to pay the finance company the full balance...there is no cooling off period in terms of the actual sale contract.
If you don’t withdraw in time or circumstances change at any time within the contract, you then have to request a settlement figure, which will include interest. Finance companies use a strict formula to work out what is owed.
Voluntary termination can be instigated once 50% of the Total Amount Payable has been reached. That’s 50% of total cash price of the goods and will include all the interest, fees, deposit and in the case of a PCP, the balloon. It is not 50% of the amount financed.
Last edited by the.admiral; 23rd April 2020 at 16:47.
I cannot believe people sign contracts not knowing fully what the implications/costs are.
When I bought my current vehicle in March last year the dealership pushed the pcp option to the point of being annoying.
The depreciation on any new expensive vehicle is massive, bit like buying a new Panerai ( speaking from experience). This loss is exacerbated by the hefty interest costs on top.
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Regrettably, not everyone wants to sit in a ****box. You do, so that is good for you. Others, who can afford better, choose an alternate direction. Different strokes, with many choosing to cut their cloth accordingly with added luxuries thrown in, where finances allow. No need to be a green-eyed judge and jury, as seems to be the tone of most of your posts on the subject.
BTW, I am a pensioner, so do not call the age card!
Last edited by Skyman; 23rd April 2020 at 18:34. Reason: Spelling
I think you’re being a bit harsh on walkerwork, I understand we all have different values and priorities in life and rightly so, but, the accusation of jealousy doesn’t sit right in my opinion. He probably can afford a newer and flashier car,he chooses not to spend his money so,personally after 50yrs in the motor trade I am in the same camp. I also agree that the present economic climate will change a lot of people’s perspective on what they need.
Actually, I drive a rather nice car, but it's on a 60 plate so it doesn`t impress the neighbours like it once did.
Car in question is a Jaguar XF 3.0 diesel that's done a total of 47000 miles from new, I bought it 10 months old with 14000miles and I got a very good deal on it in 2011.
I also own a 1970 MGB roadster that's been completely restored (partially by my good self) to a high standard. With an uprated engine it's nice to drive in a 'classic' sort of way, for me it's a hobby and I enjoy working on it as much as driving it, I just like owning it.
My wife's car is a 17 plate Focus 1.5 automatic, that suits her needs nicely. It's top of the range so it has some nice toys, most of which we never use.
It's fair to say I like certain cars and I enjoy owning something I feel positive about......a bit like watches really. The Jag's a cracking motor, the MG's a nostalgia trip for me, both vehicles put a smile on my face and the cost of ownership is modest.
I would NEVER get a car that I couldn't afford to buy outright, I made that decision many years ago and I`ve stood by it. I`ve usually bought used cars at 1-2 years old and I`ve always done OK with them. I had a couple of new ones in the distant past, they don't stay new for long, for me it's a case of 'been there, done that, stood the depreciation, won't do it again'.
As for colours, I`ve always been fan of mid-dark metallic blues and bright reds, can't stand white, silver, or sickly green. Black alloy wheels always look bad to me, reminds me of the 80s when many cars had silver plastic wheel trims over black steel wheels, when the wheel trims got nicked all you saw was the black, didn't look good then and it doesn`t look good now.
British Racing Green's OK on the right car, but most greens just look wrong.........perhaps that's why Skyman's cross with me because I slagged his green car off on a different thread, he's got plenty of money because he's told us all so but his taste is a bit lacking in my opinion. I like to think I`ve got more taste than money, I`m OK with that.
Last edited by walkerwek1958; 23rd April 2020 at 18:42.
Just added a comment to my post. Pensioner or not, do not judge you utter ****.
So not much going for you then. Sorry to post such a short reply to your diatribe. Colour is a personal choice though. On that, only, we agree.
The guy wrote a general comment but you decided to take it personally.
Ok, we know (and god do we know) you are not all fur and no knickers, but the point is many people are.
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I picked up the wife a 2015 Range Rover Sport last year and LR offered £3k deposit contribution if you took out the PCP but not if you paid cash so I took it and cleared it within 14 days by withdrawal of the agreement and that made it a good deal.When I bought my current vehicle in March last year the dealership pushed the pcp option to the point of being annoying.
The depreciation on any new expensive vehicle is massive, bit like buying a new Panerai ( speaking from experience
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The offer didn't last long as quite a few did same
I know Audi had some offers of upto 10k deposit contributions on certain vehicles.
I had a discovery sport before and just sold that private a few months before the PCP ran out and made a a few £k extra on that.
I've now got a sensible van for myself
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What he said
The fur coat no knickers brigade are literally leaking crap all of a sudden
Charming terminology.
Never liked the look of PCP deals. I contract hire a car through my business, at this time it’s Merc GLC as soon as the deal is sealed the money is put aside to pay the rental over the 2 year period. All this ballon payment shit does my head in.
Over the years I have bought brand new Merc’s Audi’s Jags and lost loads of money on all of them, so now I have purchased my 5 series at 18 months old,it looks great, is a good spec and cost nearly half the new price, I will keep it at least another 4 years.
I also like Paul have a classic car, a TR6 which is in stunning condition, and brings a smile to my face whenever I drive it, people wave put thumbs up, and stop me wherever I go. I have learned what I need and want car wise now and I am happy, it’s cost a lot of money getting there though. I think a lot of people will take stock of what they spend on luxury goods and now will cut their cloth accordingly.
no, you dont.
Last edited by Kippax; 23rd April 2020 at 22:40.
You are utterly devoid of manners, humour, humility and class. As for the ‘pensioner’ dig, I class myself as a somewhat fortunate early retiree.
Started out with nothing. Still have most of it left.
I think that was directed at me not you walkerwork- he did his sums.
In an attempt to leave the petty sniping behind and get back to the thread, I imagine car and car finance companies will be inundated with this sort of issue when they reopen. I can see several implications including some of the retailers going bust and passing their debts to very unsympathetic collection agencies, although you may get lucky.
Op, I think you will be able walk away but the worry is about the deposit.
As others have suggested, it may be possible to transfer the deposit to another car. I am sure the dealer would prefer this to returning it.
On a separate note. Not getting your vehicle serviced in a timely manner is a breach of the warranty (not sure about PCP terms)
however the dealers are closed and cannot carry out servicing.
I have a car 28 months into a 36 month PCP and intend to purchase outright so I took out a 5 year warranty.
Ford UK have been zero help whatsoever. Simply saying it's not their problem that all the main dealers are not open.
I can get it serviced at an 'approved' garage but they don't have a list. And they helpfully warn me that if I go 1000 miles or one month over the required interval I will void the warranty.
Gits.
I have an extended warranty on my (purchased second-hand for cash, no PCP) BMW 335i.
Warranty is due for renewal on Sunday. and the car is due its annual service, so I spoke to BMW Extended Warranty yesterday and they are allowing a 90 day grace period - which they will re-evaluate, if necessary - on the servicing requirement.
You can get it serviced at any VAT registered garage. They must use genuine parts to maintain your warranty.
I had an interesting scenario around this. Bought a used approved immaculate Golf Cabriolet last year, from my local VW dealership, only had 12k on the clock. Last month it was due its first service, MOT and was also due a timing belt as that is required at 5 years. In the last year in my ownership it had done an additional 5,000 miles - but I decided to get everything done as the timing belt going pop is too much of a risk imho. Booked in for the work, then was told after all this lockdown kicked off that their garages are all closed, service booking cancelled (I wanted it serviced by them due to being within the 1 year warranty) and I can book it in for August! - and after I asked about the timing belt they said I shouldn’t drive it in the interim, effectively leaving the car unable to be driven for at least 4 months!
I was lucky - they emailed all their customers a few days later saying all key workers could still get their car serviced, and they sorted it pretty quickly, but if I hadn’t fallen into that group it would have been a real pain
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I wonder if they might even consider something secondhand? Probably not, so something smaller and cheaper would save the OP a lot of worry. It would then just be a case of paying some contrived admin fee to get the credit agreement changed to something within budget.
Often you get a better deal buy opting for pcp as the dealer will often discount pcp deals and therefore it can cost more to NOT buy on finance, BMW are famous for this.
We bought two new cars last year, my wifes Lexus came with a £1k discount (contribution) for finance, we took the deal and settled the finance a few days later, it cost about £120 all in so was £880 cheaper than paying cash in the first place.
My car is on a 2.9% finance deal and whist we could pay the finance off now I'm thinking that money might be better used elsewhere so we are holding off for now
PCP discussions always go a similar way on forums, not everyone wants to drive an old car and provided a person can afford the payments and UNDERSTANDS how these deals work they are a useful option for people.
Problem with buying used is you are kinda stuck with a bank loan, if you don't have the capital, dealer finance for used cars often carries a high APR.
There is nothing to stop you getting it serviced at any vat registered garage using for genuine parts.
They cannot void a warranty due to that,I did the same on my old range rover sport warranty still stood.
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I assume that you need a deposit to buy a car on PCP. Would it not be better to use that and cheaper finance from another source? Car salesmen are known for many things, altruism isn’t of them. If they selling you PCP so keenly it obviously benefits them more than it benefits you.
That actually worked out better for me. I recently purchased a one year old E Class for work. I had a bank loan of £24,000 over 5 years at 2.9% apr. I’m paying back a total of £25,800. I wouldn’t have got a deal as good as that out of Merc.
Nope, my last was zero down and 2.9% finance which was cheaper than any bank. Advertised rate was the usual 10% deposit and around 4.9% APR iirc.
End of the day the dealer will bend over to get another car sold, to get the commission from the finance company and manufacturer bonuses for hitting targets.
Some good info here
https://www.pistonheads.com/news/gen...--update/42256
Thanks for the info. Every day is a school day.
In short, it means those worried about losing their PCP or contract hired cars due to financial difficulty in these unprecedented times can breathe a sigh of relief - or at least temporarily rest in the knowledge that they’ve three months to address the problem. The changes come as part of wider finance and loan legislation changes, designed to prevent consumers being unfairly penalised for an event nobody had prepared for. It’s likely to effect a significant number of owners; almost nine in ten cars bought in the UK are through a PCP.
Nine out of Ten
Dont think so .....
All to do with residuals (the balloon payment) ....and to stop people doing the voluntary termination, leaving the finance companies to pick up the negative equity.
Makes sense......
Yep it certainly makes sense to use a bank loan if buying used. When you compare the monthly payments you can see why pcp is so attractive though.
Thanks for all the comments and advice, quick update - emailed the dealership to cancel, they offered to hold the car for me for a few months in case things improve, to which I have replied in the negative. Awaiting to hear back again now.
No help for the OP but isn't the point of PCP that you can just give the car back at the end and if the finance company made a mistake on the GFV that is their problem? I understand the delta between actual and guaranteed value is meant to provide a deposit but won't it be the finance companies taking the hit on unexpected depreciation rather than the hirer (unlike a paid in full car) ?
Excellent. I am really pleased to see a happy ending to this.
This is my understanding. One reasons why you shouldn’t put down big deposits. I prefer leasing anyway.
Just to correct a few members that are incorrect on the perceived cooling off period of 14 days.
Any regulated finance agreement signed on business premises (which cover the vast majority of manufacturers PCP agreements) cannot to be cancelled once it is signed on their premises. Documents signed off premises (e signed/hard copy/email and fax) can be cancelled but, as always, check the relevant T&C’s at the time.
In the case of the O/P if he or she has not actually signed the finance documents they “should” be able to cancel the order but may incur contracted cancellation costs and/or the loss of a deposit made (if applicable)
I suppose that works only if the indy garage has genuine parts in stock, if not the dealer is closed so around the circle we go.
Not really. You can get genuine parts from most motor factors.
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