need to change car on pcp 2 years in !!!
Discussion
It depends how much equity you have paid off, and what the car is worth now.
If you wanted out of the PCP, if the car is worth more than what you have left to pay (rest of the payments plus the balloon) then that's good. You can hand the car back and get the difference back.
However, its more likely that the car is worth less than what you've left to pay. You can pay this difference to get out of the PCP - this is what I did.
One further option - if you've paid off more than 50% of the total value of the agreement (typically the list value of the car), you can voluntarily terminate the contact with no more fees. This value will be listed in the original finance agreement you have.
If you wanted out of the PCP, if the car is worth more than what you have left to pay (rest of the payments plus the balloon) then that's good. You can hand the car back and get the difference back.
However, its more likely that the car is worth less than what you've left to pay. You can pay this difference to get out of the PCP - this is what I did.
One further option - if you've paid off more than 50% of the total value of the agreement (typically the list value of the car), you can voluntarily terminate the contact with no more fees. This value will be listed in the original finance agreement you have.
meb90 said:
It depends how much equity you have paid off, and what the car is worth now.
If you wanted out of the PCP, if the car is worth more than what you have left to pay (rest of the payments plus the balloon) then that's good. You can hand the car back and get the difference back.
However, its more likely that the car is worth less than what you've left to pay. You can pay this difference to get out of the PCP - this is what I did.
One further option - if you've paid off more than 50% of the total value of the agreement (typically the list value of the car), you can voluntarily terminate the contact with no more fees. This value will be listed in the original finance agreement you have.
It's a PCP so highly unlikely that the OP would be anywhere near halves rule. (Term dependant of course) if it's a 36 month agreement and depending on original deposit, possible. However, if it's a Merc (but not BMW or Audi) no chance. Merc PCP final values tend to be set so that it's impossible to get to halves rule. (Once you're in a Merc, you're in)If you wanted out of the PCP, if the car is worth more than what you have left to pay (rest of the payments plus the balloon) then that's good. You can hand the car back and get the difference back.
However, its more likely that the car is worth less than what you've left to pay. You can pay this difference to get out of the PCP - this is what I did.
One further option - if you've paid off more than 50% of the total value of the agreement (typically the list value of the car), you can voluntarily terminate the contact with no more fees. This value will be listed in the original finance agreement you have.
What is this 'list value?'
Secondly, I think you're confusing end of agreement 'hanback' with part ex equity. There is no ability to hand a car back and be 'paid the difference' in value.
In summary, here are the rules. I'm assuming that your username incorporates your DOB and you are trying to be helpful? Good for you! But incorrect.
1/3rds rule;
Once 1/3 of the total cost of the agreement has been repaid (including interest) but minus any deposit, the motorcar cannot be reposed without a Court Order.
Once 50% of the total cost of the agreement has been repaid (including interest) but minus deposit, the lessee may hand the car back-subject to condition and fare wear and tear. (Fare wear and tear definitions published annually by motor vehicle leasing and hire association)
TVR1 said:
Once 50% of the total cost of the agreement has been repaid (including interest) but minus deposit, the lessee may hand the car back-subject to condition and fare wear and tear. (Fare wear and tear definitions published annually by motor vehicle leasing and hire association)
Two corrections -=> it DOES include the deposit, and also any admin fees
=> the purchaser is NOT a lessee (leasee?) - its a hire purchase agreement, not a lease.
-Pete- said:
If the pcp's arranged through a main dealer, go back to them ask what they can do for you. They'll probably be able to find a way to keep you as a customer.
Very dangerous - they will use all the tricks in the book to get another sale, which may not necessarily be the most beneficial for the O/PTVR1 said:
Once 50% of the total cost of the agreement has been repaid (including interest) but minus deposit, the lessee may hand the car back-subject to condition and fare wear and tear. (Fare wear and tear definitions published annually by motor vehicle leasing and hire association)
And just to add to that - you're describing the right to Voluntary Terminate.This is NOT dependent on having paid 50% of the total agreement value. You can VT at any time - a day after you get the car if you like (but that would be dumb), and the finance company can only ask you / pursue you for up to 50% of the total agreement value minus any deposit and payments already made.
Its designed to stop finance companies trying to force people already in financial difficulties into paying disproportionate amounts of money.
Actually, its designed to give people with unexpected financial difficulties options, however it is now most commonly used by people aiming for an early exit from their HP agreement.
Its generally "interpreted" as "you can hand it back with nothing further to pay once you've paid 50% of the total agreement cost" but its much more far reaching than that.
Edited by daemon on Tuesday 14th February 21:36
BoRED S2upid said:
-Pete- said:
If the pcp's arranged through a main dealer, go back to them ask what they can do for you. They'll probably be able to find a way to keep you as a customer.
They will definitely find a way to keep him as a customer. Bend over sir... DELETED: Comment made by a member who's account has been deleted.
Correct. Though dont confuse "half way through" with "having paid 50% of the total agreement cost".In your example you couldnt VT with nothing further to pay because your total commitment by the time you've paid all 36 months payments is "just" £7,800 and 50% of the total agreement cost is £10,900.
A more typical example might be :-
£20K car after discount
£2500 down
£300x36
£9.5K residual.
Total agreement cost is £22,800.
50% paid (£11,400) by month 30.
-Pete- said:
BoRED S2upid said:
-Pete- said:
If the pcp's arranged through a main dealer, go back to them ask what they can do for you. They'll probably be able to find a way to keep you as a customer.
They will definitely find a way to keep him as a customer. Bend over sir... But they will smell blood.....
TVR1 said:
It's a PCP so highly unlikely that the OP would be anywhere near halves rule. (Term dependant of course) if it's a 36 month agreement and depending on original deposit, possible. However, if it's a Merc (but not BMW or Audi) no chance. Merc PCP final values tend to be set so that it's impossible to get to halves rule. (Once you're in a Merc, you're in)
What is this 'list value?'
Secondly, I think you're confusing end of agreement 'hanback' with part ex equity. There is no ability to hand a car back and be 'paid the difference' in value.
In summary, here are the rules. I'm assuming that your username incorporates your DOB and you are trying to be helpful? Good for you! But incorrect.
1/3rds rule;
Once 1/3 of the total cost of the agreement has been repaid (including interest) but minus any deposit, the motorcar cannot be reposed without a Court Order.
Once 50% of the total cost of the agreement has been repaid (including interest) but minus deposit, the lessee may hand the car back-subject to condition and fare wear and tear. (Fare wear and tear definitions published annually by motor vehicle leasing and hire association)
I'm not sure the OP says how long the PCP term is. I agree that being in positive equity is highly unlikely, but there was no mention of manufacturer.What is this 'list value?'
Secondly, I think you're confusing end of agreement 'hanback' with part ex equity. There is no ability to hand a car back and be 'paid the difference' in value.
In summary, here are the rules. I'm assuming that your username incorporates your DOB and you are trying to be helpful? Good for you! But incorrect.
1/3rds rule;
Once 1/3 of the total cost of the agreement has been repaid (including interest) but minus any deposit, the motorcar cannot be reposed without a Court Order.
Once 50% of the total cost of the agreement has been repaid (including interest) but minus deposit, the lessee may hand the car back-subject to condition and fare wear and tear. (Fare wear and tear definitions published annually by motor vehicle leasing and hire association)
I think you are being a little obtuse with your comments regarding list value, and me being confused, but that's fine by me.
You're quite right regarding my username and DOB, but I don't really see what impact that has. Your comment seems a little condescending.
My understanding of the 50% thing is the same as the other posters.
I've no intention of making enemies, apologies if I rubbed you the wrong way
daemon said:
Its "an" option. But they will smell blood.....
Nope, I still don't get it. He will have the option to get out of the PCP, in which case he walks away with some cash or loses some cash. And the PCP company have lost him as a customer.So it will be in their interests to offer him something better, to stay with them. Assuming he can count, he will be able to decide which way to go. Are you saying he's better off not knowing whether they'd try to keep his business?
-Pete- said:
daemon said:
Its "an" option. But they will smell blood.....
Nope, I still don't get it. He will have the option to get out of the PCP, in which case he walks away with some cash or loses some cash. And the PCP company have lost him as a customer.So it will be in their interests to offer him something better, to stay with them. Assuming he can count, he will be able to decide which way to go. Are you saying he's better off not knowing whether they'd try to keep his business?
Also, hes not buying from the PCP company, hes buying from the dealership. They are a seperate entity.
He would be better :-
=> Getting a settlement figure
=> Doing his homework on what his car is worth in the motor trade (WBAC or a Glass's guide quote) and via a private sale
=> If hes potentially in negative equity seeing if he has the funds himself to bridge that gap
=> Consider selling the car privately, to a buying site, or to a local dealer, bridging any gap himself.
=> Check all the then available deals across all dealers across the whole of the UK to see what deals are attractive
=> Consider using a personal loan if its cheaper
=> Know what finance deals are on offer via manufacturers, any manufacturer contributions he can get as part of offers, what the APR is / should be.
=> Walk in to any dealer of his choice with his homework done - splitting it out into value for his car, discount on new car, finance deal on new car.
Genuinely - walking in to the supplying dealer and saying "can you help me get into a bigger car" will end up with a "for just an extra £XX more per month you can drive away in this shiney new car today", and you wont have any idea where you stand or what its REALLY costing you.
Edited by daemon on Tuesday 14th February 22:09
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