Voluntary Termination of BMW PCP
Discussion
I have a car on PCP that's due back in 2022.
Like many people my work situation has changed to a degree where whilst I can afford the car I simply don't use it enough to justify the expense and don't see that changing.
I'm past the 50% point so I'm considering simply handing it back.
Other than the financial hit are there any downsides or "gotchas" in doing this or is it literally as simply as giving it back?
Like many people my work situation has changed to a degree where whilst I can afford the car I simply don't use it enough to justify the expense and don't see that changing.
I'm past the 50% point so I'm considering simply handing it back.
Other than the financial hit are there any downsides or "gotchas" in doing this or is it literally as simply as giving it back?
PCP agreements can be ended early so long as you’ve paid 50% of the total finance amount back to the finance company as per what you hVE SAID.
Note that the total finance amount will include any interest and fees that you have to pay too.
Perhaps most importantly, it will include the balloon payment.
The balloon payment is important because it means you probably won’t pay 50% of the total finance agreement by the mid-way point of your monthly repayment schedule.
Or, in other words, you simply can’t get half way through the agreement and then decide to stop – you have to take into account the balloon payment too.
As well as the 50% repayment, you must have taken reasonable care of the car. This means there are no damages (other than normal wear and tear).
If you tick these boxes, you can cancel the agreement.
Note that the total finance amount will include any interest and fees that you have to pay too.
Perhaps most importantly, it will include the balloon payment.
The balloon payment is important because it means you probably won’t pay 50% of the total finance agreement by the mid-way point of your monthly repayment schedule.
Or, in other words, you simply can’t get half way through the agreement and then decide to stop – you have to take into account the balloon payment too.
As well as the 50% repayment, you must have taken reasonable care of the car. This means there are no damages (other than normal wear and tear).
If you tick these boxes, you can cancel the agreement.
50% check and understood.
Car isn't a shed check and understood.
This is more about understanding if, assuming those conditions are met, it literally is as simple as arranging to hand it back?
I believe it's a consumer rights thing and doesn't impact on your credit record for example as I wouldn't hand it back to save money but f
k up my credit record etc.
Car isn't a shed check and understood.
This is more about understanding if, assuming those conditions are met, it literally is as simple as arranging to hand it back?
I believe it's a consumer rights thing and doesn't impact on your credit record for example as I wouldn't hand it back to save money but f
k up my credit record etc.I did a VT on a BMW PCP a few years ago.
As above - you're a long way past 50% of the payments before you get to it, not just 25 months into a 48 month agreement. The finance people advised that it "could" affect lenders willingness to lend to you - but that BMW would still lend.
I believe it appears on your credit score - but as long as you paid all that is owed then it's a settled account so isn't a negative.
I did it - zero problems since. The car was way under the agreed milage and didn't have any damage so can't comment of fees etc for that.
As above - you're a long way past 50% of the payments before you get to it, not just 25 months into a 48 month agreement. The finance people advised that it "could" affect lenders willingness to lend to you - but that BMW would still lend.
I believe it appears on your credit score - but as long as you paid all that is owed then it's a settled account so isn't a negative.
I did it - zero problems since. The car was way under the agreed milage and didn't have any damage so can't comment of fees etc for that.
Edited by esuuv on Saturday 30th January 14:24
I vt’d a 335dx a few years back,. When I first decided to do it, I worked out I had 3 months to go until the vt balance point. I decided I’d keep the car for those 3 months, they were effectively free because the payments came directly off the due payment. I ended up with a £9 bill or similar because I didn’t want to make the next payment, which would over pay the balance point by several hundred pounds.
After notifying them I wanted to vt, a bca inspector came out and went over the car thoroughly. He noticed a few minor points and recorded them. He advised me that if I wasn’t happy with the costs associated to the repairs I could sign to say I wasn’t happy to agree costs at this stage. I did this because a tiny paint chip was costed high due to his reporting software. A short while later Bmw wrote to say they had wavered the costs and I was released from any liability.
I bought another Bmw using Bmw finance about a year later without any problems.
After notifying them I wanted to vt, a bca inspector came out and went over the car thoroughly. He noticed a few minor points and recorded them. He advised me that if I wasn’t happy with the costs associated to the repairs I could sign to say I wasn’t happy to agree costs at this stage. I did this because a tiny paint chip was costed high due to his reporting software. A short while later Bmw wrote to say they had wavered the costs and I was released from any liability.
I bought another Bmw using Bmw finance about a year later without any problems.
bhstewie said:
hstewie said: Other than the financial hit are there any downsides or "gotchas" in doing this or is it literally as simply as giving it back?
Whats the 'financial hit' if you are VT'ing - there is nothing more to pay, you just hand it back (unlike in some leases where you have to pay a percentage of the outstanding monthly payments)?Mark V GTD said:
Whats the 'financial hit' if you are VT'ing - there is nothing more to pay, you just hand it back (unlike in some leases where you have to pay a percentage of the outstanding monthly payments)?
Fair point actually.Likewise just looking at the figures and I may be a couple of months away from the actual 50% point.
Basically I have insurance due in May (big chunk) so that's probably a sensible point to look at doing it.
bhstewie said:
hstewie said:Mark V GTD said:
Whats the 'financial hit' if you are VT'ing - there is nothing more to pay, you just hand it back (unlike in some leases where you have to pay a percentage of the outstanding monthly payments)?
Fair point actually.Likewise just looking at the figures and I may be a couple of months away from the actual 50% point.
Basically I have insurance due in May (big chunk) so that's probably a sensible point to look at doing it.
It shouldn't effect you credit score but finance houses don't like it. We had a taxi driver hand back a few Galaxy's in a row on HP to Ford Credit, after the third they wouldn't lend to him anymore as they were getting f
ked over with 2 year old cars with 100,000 + miles on them.Your PCP contract should show what the 50% point is. Ours does on the Mini we have, clearly states what we need to get to which is about £1100 from where we are now, so 3-4 more payments for us.
As far as I have read, it won’t affect your credit ‘rating’ as such but the VT will be noted on your credit report, I would assume it will be listed as Voluntary Termination rather than Completed or Paid or whatever they normally list as .
I guess if you wanted another PCP from BMW or Mini they might not be too keen next time but personally that doesn’t fuss me.
My only concern is how much damage they will try and get out of me.
As far as I have read, it won’t affect your credit ‘rating’ as such but the VT will be noted on your credit report, I would assume it will be listed as Voluntary Termination rather than Completed or Paid or whatever they normally list as .
I guess if you wanted another PCP from BMW or Mini they might not be too keen next time but personally that doesn’t fuss me.
My only concern is how much damage they will try and get out of me.
rehab71 said:
If you call the lender they will tell you exactly how far you are away from the 50%, you could always pay that difference and get out of it now if you wanted.
Good suggestion - although as you would need to pay the total amount owing up to the 50% point you are really only going save money on the road tax and insurance. If there is a service coming up then that may tip the scales and make it worthwhile to get out asap and avoid paying for it. Latters said:
Are you definitely in negative equity? If not, you’d be better off selling it and paying off the finance with the cash.
Problem is you would need to sell privately unless you have some decent positive equity which is unlikely on a PCP. Selling a car privately is a pain at the moment due to lockdown and a trade in or WBAC would likely be less than you had to pay on a PCP so technically negative equity.Worth a try I guess but not sure how much luck you would have considering the current situation.
I asked BMW Finance for a statement and basically I am past the VT point.
They passed details to the supplying dealer who called and they suggested there's about a grand in it for me if I sold it to them as I think they settle the finance directly with BMW.
The agreement runs until May 2022 and I'm paying £300/month with a £13K balloon.
The lady at the dealership said I was the sixth or seventh person she'd spoken to this week where they just don't want to be paying money for something that's sitting on the drive getting next to no use.
Even if life goes back to normal tomorrow my employer isn't going to be reverting to five days in the office.
Damned if I can decide.
They passed details to the supplying dealer who called and they suggested there's about a grand in it for me if I sold it to them as I think they settle the finance directly with BMW.
The agreement runs until May 2022 and I'm paying £300/month with a £13K balloon.
The lady at the dealership said I was the sixth or seventh person she'd spoken to this week where they just don't want to be paying money for something that's sitting on the drive getting next to no use.
Even if life goes back to normal tomorrow my employer isn't going to be reverting to five days in the office.
Damned if I can decide.
bhstewie said:
hstewie said: I asked BMW Finance for a statement and basically I am past the VT point.
They passed details to the supplying dealer who called and they suggested there's about a grand in it for me if I sold it to them as I think they settle the finance directly with BMW.
The agreement runs until May 2022 and I'm paying £300/month with a £13K balloon.
The lady at the dealership said I was the sixth or seventh person she'd spoken to this week where they just don't want to be paying money for something that's sitting on the drive getting next to no use.
Even if life goes back to normal tomorrow my employer isn't going to be reverting to five days in the office.
Damned if I can decide.
I sold my M2 last June (would never of reached the VT point in the 3yr PCP i took out) and had to add a couple of grand to pay off the outstanding but was a no brainer with lack of use and it due a service and rear tyres a few months later, by October i was quids in saving the insurance, tax and PCP payments. Wife has a Leon Cupra on lease so that was all we needed and still do tbh.They passed details to the supplying dealer who called and they suggested there's about a grand in it for me if I sold it to them as I think they settle the finance directly with BMW.
The agreement runs until May 2022 and I'm paying £300/month with a £13K balloon.
The lady at the dealership said I was the sixth or seventh person she'd spoken to this week where they just don't want to be paying money for something that's sitting on the drive getting next to no use.
Even if life goes back to normal tomorrow my employer isn't going to be reverting to five days in the office.
Damned if I can decide.
bhstewie said:
hstewie said: I asked BMW Finance for a statement and basically I am past the VT point.
They passed details to the supplying dealer who called and they suggested there's about a grand in it for me if I sold it to them as I think they settle the finance directly with BMW.
The agreement runs until May 2022 and I'm paying £300/month with a £13K balloon.
The lady at the dealership said I was the sixth or seventh person she'd spoken to this week where they just don't want to be paying money for something that's sitting on the drive getting next to no use.
Even if life goes back to normal tomorrow my employer isn't going to be reverting to five days in the office.
Damned if I can decide.
If you can sell it and get a grand then do it, it removes the risk of any charges from the finance house.They passed details to the supplying dealer who called and they suggested there's about a grand in it for me if I sold it to them as I think they settle the finance directly with BMW.
The agreement runs until May 2022 and I'm paying £300/month with a £13K balloon.
The lady at the dealership said I was the sixth or seventh person she'd spoken to this week where they just don't want to be paying money for something that's sitting on the drive getting next to no use.
Even if life goes back to normal tomorrow my employer isn't going to be reverting to five days in the office.
Damned if I can decide.
We VT’d an SL a few years ago with a couple of months left and they managed to sting us for a few hundred, after trying for over £350 for a chipped windscreen. Massive pain in the neck having to argue with them even though the car was immaculate and well under the mileage limits.
Yes I presume that selling it is cleaner than a VT as I'm settling the finance?
I know VT is a consumer right but it's difficult to get a 100% clear answer on whether it has any impact on a credit record.
15 x £300 = £4500 saved on monthly payments and I doubt I'd have paid the balloon off.
Right now I'm trying to think if there's any financial benefit in keeping the car and I'm struggling to see one.
I know VT is a consumer right but it's difficult to get a 100% clear answer on whether it has any impact on a credit record.
15 x £300 = £4500 saved on monthly payments and I doubt I'd have paid the balloon off.
Right now I'm trying to think if there's any financial benefit in keeping the car and I'm struggling to see one.
Sometimes it's best to clear the decks and start from a blank sheet!
It's sounds like you've made your decision to part with the car so it's just a question of how to do it.
Sounds reasonable to sell to the dealer if you can or simply VT.
Put the money saved from payments, insurance, servicing, MOT etc into the bank and enjoy planning the next car.
We hAve two cars sitting on the drive doing hardly any miles and it feels a total waste on running costs at the moment. Who knows where we are going with this pandemic and lockdowns. I don't think life is going to be anything like normal for a long time yet.
You can save a lot of cash in the coming months and be ready to jump on something special when the time comes.
Still, we can all look forward to when restrictions are eased and it sounds like there may be some good opportunities to buy coming up.
It's sounds like you've made your decision to part with the car so it's just a question of how to do it.
Sounds reasonable to sell to the dealer if you can or simply VT.
Put the money saved from payments, insurance, servicing, MOT etc into the bank and enjoy planning the next car.
We hAve two cars sitting on the drive doing hardly any miles and it feels a total waste on running costs at the moment. Who knows where we are going with this pandemic and lockdowns. I don't think life is going to be anything like normal for a long time yet.
You can save a lot of cash in the coming months and be ready to jump on something special when the time comes.
Still, we can all look forward to when restrictions are eased and it sounds like there may be some good opportunities to buy coming up.
bhstewie said:
hstewie said: They passed details to the supplying dealer who called and they suggested there's about a grand in it for me if I sold it to them as I think they settle the finance directly with BMW.
If you VT you get £0, so if they'll buy your car and give you a grand net after settling the finance, that sounds like a better option.I'm counting on another nine months of WFH personally. When you are back in the office you can always buy something cheaper or start a new PCP (albeit with a new deposit). Assuming you don't currently have a need for two cars in the household, if I were you I'd only hang onto the BMW if it's something you really like and planned to keep long-term.
Sell the car to the dealer = +£1000
Save nine months PCP payments = +£2700
Save insurance renewal +£500?
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