Viewing 16 posts - 1 through 16 (of 16 total)
  • Finishing a PCP early – has anyone ever had a problem?
  • legend
    Free Member

    With jnr’s arrival a few months ago, and the missus likely to be getting rid of her company van in the reasonably near future, I’m looking at finishing our PCP on the car early to get something sensible*

    Can’t remember the exact deposit, but it wasn’t more than 1 month which helps keep things simple. My documents confirm that the car can go back after halfway through, and google confirms that there won’t be a black mark on my credit score. However, what does appear is that it can make credit companies (Black Horse in this case) less likely to want to deal with you again in future. Has anyone ever actually experienced that though? I’ve never heard of it, but would be good to know if it was actually likely to be an issue

    *boring

    P-Jay
    Free Member

    I’ve personally declined dozens of finance apps for serial VTers – they usually result in a loss for lenders and I didn’t want to be the next sucker.

    I’ve never declined one for a single VT.

    This was a long time ago though when there was more human input.

    I’d VT it, assuming it’s not in equity given the circumstances.

    nickdavies
    Full Member

    On PCP doesn’t the future value get taken into account? So it’s not actually half way through when you can hand it back, it’s closer to the end of the deal. From what I know of it from looking myself on a 3 year pcp it’s not until quite close to the end of the deal you end up having paid the 50% of your total amount payable.

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    geoffj
    Full Member

    VT?

    P-Jay
    Free Member

    “Voluntary Termination”.

    There’s a clause in most asset secured consumer finance agreements based around balance of ownership.

    In simple terms you can give them back no harm, no foul once you’ve paid 50% of the total amount due on the agreement.

    It’s recorded as a “VT” as the reason for settlement on your credit history. By the rules it’s a ‘right and proper’ settlement, but it usually means the whole deal made a loss for the finance co so if I was presented with a file where the customer wanted a small deposit and had a history of VT then it would probably make a loss, so why risk the capital.

    submarined
    Free Member

    Voluntary Termination.
    Watching with interest as we’re thinking of doing the same with my wife’s car due to going waaaaay over the mileage limit….

    P-Jay
    Free Member

    They don’t have to accept it back if it’s been wrecked or indeed taken way past the mileage limit.

    You might be better off talking to the dealer about a part-ex.

    submarined
    Free Member

    Yeah, it’s just something we investigating. I think we’ve done 2 year’s worth in about 15 months. Tbh it’s a case of weighing up several options(early trade in, VT and mileage penalty at term) as it was purchased as part of a manufacturer subsidised scheme ( as will it’s replacement be)

    Really helpful info though P Jay, ta. I had no idea it could have an effect on credit ratings.

    the-muffin-man
    Full Member

    Watching with interest as we’re thinking of doing the same with my wife’s car due to going waaaaay over the mileage limit….

    Mileage only comes into it if you want to hand the car back. Get towards the end of your term then part-ex it and do a deal for a new one on a higher mileage.

    My wife was 10k over her agreed mileage (due to getting a job further away).

    rone
    Full Member

    I sent my Fabia back 2/3rds in and I’d met the minimum commitment.

    Didn’t cause any hassle whatsoever and credit score still excellent.

    submarined
    Free Member

    Interesting. When we knock over the 18 months after Christmas I’ll dig out the paperwork.

    carlphillips
    Free Member

    handed one back today, 2nd time i’ve done it, to my knowledge no credit rating affected

    Flaperon
    Full Member

    I did it twice. Dealer wouldn’t give PCP for the third car. Which in some respects was understandable since I ditched an Vauxhall Mediocre, I mean Insignia, exactly half way through a 0% finance deal.

    boxxer7
    Free Member

    out of interest flaperon what did you do instead?

    Currently in a similar situation the OP, got a car that’s 3 years and 3 months into a 4 year PCP and i’m keen to get out as I don’t really need the car anymore, also i dont want to have any problems in the future should I want another car.

    Flaperon
    Full Member

    Ended up with a cash loan for the car. Dealer organised, 3% APR, same monthly payments as PCP but you own the car at the end. Only disadvantage is that the interest is included in the total loan payable from the start, and obviously you go through a period where the outstanding balance is more than the car is worth.

    richardkennerley
    Full Member

    I VT’d my last car a couple of years ago in order to get something more practical ready for our first child. I want to VT this car next year because it turns out it’s not practical enough!! No one told me there could be credit score implications though!! 😯

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