PCH Termination

[customcourier]

As title. What are my rights?

So i worked as a courier for 11 years. Last November someone rear ended and wrote off my trusty transit custom. It was starting to get ropey anyway so i took the offered 6k and took a new etransporter out on a 24 month pch.

Ive now been made redundant and obviously i cannot afford the repayments. Ive tried to be reasonable with VW Financial Services but they are only offering me 2 options. 1. Terminate contract early at a cost of £4700 which i cannot afford. 2. Preferential Termination which involves me going to local VW dealer, they take the van off my hands but i need to take another (cheaper) lease deal off them. To be honest i cant afford that either.

The van is almost 60k new and ive covered just over 6400 miles of a 40000 mile contract. Ive said surely the sensible thing is for them to get it on their forecourt asap to get as much from the van as possible but they wont budge.

Thoughts guys?

[bennno]

Ask them to offer you payment terms in the £4700 ?

[tallpaul26]

I’ve not heard of preferential termination but my direct experience of ending a VWFS lease early was liability for 55% of the outstanding payments. Because PCH is only a lease agreement and has no option to purchase, the situation you are in now is the biggest downside.

Other options I can think of are exploring the possibility of transferring the lease. That would require it being acceptable to VWFS and finding someone who wants the van. Alternatively have you told VWFS you can’t afford the payments? They may be able to restructure/pause the payments to give you some breathing space.

[MDMA .]

Are you planning to be out of work permanently? Would the sensible thing to do not be to get yourself back into work as soon as possible and honour your commitments?

[loskie]

I've heard of preferential termination but in my very limited experience no dealer will facilitate it. That was when car prices were sky high too.

[troika]

tallpaul26 said:

I ve not heard of preferential termination but my direct experience of ending a VWFS lease early was liability for 55% of the outstanding payments. Because PCH is only a lease agreement and has no option to purchase, the situation you are in now is the biggest downside.

Other options I can think of are exploring the possibility of transferring the lease. That would require it being acceptable to VWFS and finding someone who wants the van. Alternatively have you told VWFS you can t afford the payments? They may be able to restructure/pause the payments to give you some breathing space.

55% used to be the case. I’ve done this in the past myself. However, things have changed. I recently early terminated a PCH and the only rebate was a token time value of money rebate of a few quid. Fortunately I only had 2 months left to run. VWFS are horrendous to deal with IME, there is nobody with any knowledge or decision making ability you can speak with. The staff might as well be out of jobs as they add no value. I guess this is part of their plan. Never again.

[Screenwash]

The number 1 pitfall of leasing/PCP/PCH which is why some people don’t or won’t do it…. You’re on the hook for the monthly repayment irrespective of your income security.

Don’t suppose you can sell it privately yourself either and pay off the contract?

TBH a £4.5k bath on a new and expensive vehicle like this so early in to its contract doesn’t sound too bad?!

[Mark V GTD]

This is a PCH agreement. The vehicle is not and never will be the OP’s to sell.

[TheDrownedApe]

Are you struggling to secure another courier job? Could a short term parcel delivery contract tie you over whilst something else comes up?

I assume you have explored this avenue and it doesn't suit?

Anything that involves handing it back is the worst option and I feel your pain. Did the redundancy pay you enough to soak up the 4.5k fee?

[Blue_star]

You can ask for hardship arrangement. Payment holidya of some sorts. They are legally obliged to comply.
Alternative is to get 50% settlement which you said uou dont want to do.

What does your contract stipulate for loss of job?

[troika]

Blue_star said:

Alternative is to get 50% settlement which you said uou dont want to do.

Doesn’t apply to PCH. You’re on the hook for the contracted rental stream. It used to be a 55% penalty of outstanding rentals, but VWFS have changed it. This is unreasonable IMHO as they get the vehicle back earlier and can sell for a higher price. But it doesn’t matter, it’s what’s in the contract which matters.

[Hammy98]

Could you list it on here and try and get someone to take it over? If you paid a deposit, then anyone taking it over would get a nearly new van on the same terms as you but without needing to pay anything upfront - you walk away without needing to pay anything bar any potential admin fee.

https://swap-a-lease.co.uk/car_leasing_inventory.c...

Also worth posting it on any courier facebook groups you can find as realistically it's a good offer for whoever takes it on since they avoid the deposit and have loads of mileage allowance left.

[sixor8]

Can you afford a default credit conviction? I don't mean in money terms, I mean in future employment. You could just stop paying, cancelling your D/D? I've never done this so I'm no sure of the full repercussions so research would be best done first.

[customcourier]

Thanks for the responses guys

So vwfs did mention about attempting to get someone to take over remainder of the contract. The caveat being that it must be a Ltd company. Thats narrows my options as all the couriers i know are Sole Traders. It would likely be a bit spendy for them anyway.

I have actually stopped my DD. Reason being i had tried to do the right thing and contact vwfs but they never got back to me like they said they were going to before my next payment, which i couldnt afford.

So i guess the way it sits right now is, either my local vw dealer agrees to a preferential termination OR they need to provide me an afforadble payment plan for the 4.7k. Anything over that i simply cant afford

[scotlandtim]

customcourier said:

Thanks for the responses guys

So vwfs did mention about attempting to get someone to take over remainder of the contract. The caveat being that it must be a Ltd company. Thats narrows my options as all the couriers i know are Sole Traders. It would likely be a bit spendy for them anyway.

I have actually stopped my DD. Reason being i had tried to do the right thing and contact vwfs but they never got back to me like they said they were going to before my next payment, which i couldnt afford.

So i guess the way it sits right now is, either my local vw dealer agrees to a preferential termination OR they need to provide me an afforadble payment plan for the 4.7k. Anything over that i simply cant afford

This is a silly thing to do.

Regardless of circumstances - you agreed a deal, and benefitted from a new vehicle. your circumstances have changed, VWFS haven't' - you're still liable...

[raspy]

customcourier said:

Thanks for the responses guys

So vwfs did mention about attempting to get someone to take over remainder of the contract. The caveat being that it must be a Ltd company. Thats narrows my options as all the couriers i know are Sole Traders. It would likely be a bit spendy for them anyway.

I have actually stopped my DD. Reason being i had tried to do the right thing and contact vwfs but they never got back to me like they said they were going to before my next payment, which i couldnt afford.

So i guess the way it sits right now is, either my local vw dealer agrees to a preferential termination OR they need to provide me an afforadble payment plan for the 4.7k. Anything over that i simply cant afford

Didn't you fill in the payment difficulties form? https://customer.vwfs.co.uk/Forms/payment-difficul...

Cancelling the DD without informing VWFS risks impacting your credit score, if VWFS flags up missed payments and/or adds late fees.

By cancelling the DD, it does not cancel your obligation to pay, as the contract remains active.

[customcourier]

scotlandtim said:

This is a silly thing to do.

Regardless of circumstances - you agreed a deal, and benefitted from a new vehicle. your circumstances have changed, VWFS haven't' - you're still liable...

Thanks for pointing out how silly i am. Thats very helpful. What would you do if you had no money and you had to prioritise either putting food on the table and doing laundry, or paying for a van? Its ok you dont need to answer that, i dont care…..

[customcourier]

raspy said:

Didn't you fill in the payment difficulties form? https://customer.vwfs.co.uk/Forms/payment-difficul...

Cancelling the DD without informing VWFS risks impacting your credit score, if VWFS flags up missed payments and/or adds late fees.

By cancelling the DD, it does not cancel your obligation to pay, as the contract remains active.

Yes that was the very first thing i did. They called me back. I explained my exact circumstances and they said they would contact me again before my next £500 installment. But they didnt.

[raspy]

customcourier said:

Yes that was the very first thing i did. They called me back. I explained my exact circumstances and they said they would contact me again before my next £500 installment. But they didnt.

Cool. Well keep chasing them then. You're the one who stands to lose the most right now, especially if you end up with issues getting credit in the future.

[blue_haddock]

customcourier said:

Thanks for the responses guys

So vwfs did mention about attempting to get someone to take over remainder of the contract. The caveat being that it must be a Ltd company. Thats narrows my options as all the couriers i know are Sole Traders. It would likely be a bit spendy for them anyway.

I have actually stopped my DD. Reason being i had tried to do the right thing and contact vwfs but they never got back to me like they said they were going to before my next payment, which i couldnt afford.

So i guess the way it sits right now is, either my local vw dealer agrees to a preferential termination OR they need to provide me an afforadble payment plan for the 4.7k. Anything over that i simply cant afford

Stopping your DD is a very bad thing to do and will cripple your credit rating, unless your ok with taking the hit and screwing up your future finances then I suggest setting bit back up pronto.