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PCP Voluntary Termination; Can they charge excess Mileage?

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simonhatfield
simonhatfield Posts: 2 Newbie
in Loans
Hi

I currently have a 57 plate BMW 3 Series through a PCP 'BMW Select' contract. I am struggling with the monthly payments, and with the agreement ending in September I would be left in a massive negative equity position.

When I got the car 4 years ago, I wasn't doing too many miles and agreed to I think, 8000 per annum, I currently have 63 000 on the clock - significantly over what I was contracted to do.

I therefore asked BMW to Voluntary Terminate my agreement and they emailed paperwork to me this morning. The agreement states; 'As long as you have paid 50% of the total amount owing you will have nothing left to pay'. I expected any payments for damage etc but was under the impression excess mileage didn't play a part?

Can anybody shed any light on this as the only info I can find relates to HP agreements which have no mileage restrictions from the outset?

Simon
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Comments

  • iolanthe07
    iolanthe07 Posts: 5,493 Forumite
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    Have a look at the terms and conditions of the agreement you signed. It would be unusual for a PCP contract not to have an excess mileage clause in it, though.
    I used to think that good grammar is important, but now I know that good wine is importanter.
  • chalkie99
    chalkie99 Posts: 1,618 Forumite
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    It looks like you have only a few months left on a 5 year term so the amount you have paid already should be enough to cover the 50% payment requirement and the excess mileage charge.

    Call them to check before you return the car though.
  • simonhatfield
    simonhatfield Posts: 2 Newbie
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    If I run to the end of the term in September then there would be excess mileage charges to pay (I am not sure of my options).

    The voluntary termination section of my agreement is totally separate and just covers the CCA wording, so I assumed the excess mileage charges wouldn't be applicable.

    I guess one angle I could take is that I have paid around 60-70% of the amount, as opposed to 50% and therefore that should cover any of the excess mileage.

    There is a lot of documentation online covering HP agreements but nothing covering PCP - being considerable over I could be liable for £2,100 of excess mileage charges :-(

    Silly of me to take the agreement in the first place, I was going to fund it through a straight Tesco Loan, which I should have as the car in 12 months would have been mine - but the Salesman did his job, lesson learnt I just don't know how best to proceed!!!
  • chalkie99
    chalkie99 Posts: 1,618 Forumite
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    simonhatfield wrote: »

    I guess one angle I could take is that I have paid around 60-70% of the amount, as opposed to 50% and therefore that should cover any of the excess mileage.

    Which is what I said.

    It's not as if you get anything back so it doesn't really matter.
  • chanz4
    chanz4 Posts: 10,923 Forumite
    First Anniversary Name Dropper First Post Xmas Saver!
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    When you take these agreements you agree to x miles, now as you have done way over even if early term you will be getting a bill for the milleage as the car will be worth a lot less
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
  • meer53
    meer53 Posts: 10,217 Forumite
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    8000 miles is a very low mileage to agree to, unless you're retired and just use the car to collect your pension ! I know that the lower the mileage the lower the payments though, which is what tempts people to agree to the lower figure.

    I'm sure the excess mileage will still apply, even when handing back the car, it does on mine.
  • chanz4
    chanz4 Posts: 10,923 Forumite
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    I know someone that had a mazda, agreed 6k and they charged her the excess millege
    Don't put your trust into an Experian score - it is not a number any bank will ever use & it is generally a waste of money to purchase it. They are also selling you insurance you dont need.
  • ILW
    ILW Posts: 18,333 Forumite
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    Thinking it through, if the excess mileage charge was waived on early return, everyone would just hand the car back a week before the end of the agreement having run up Starship Enterprise distances.
  • jonesMUFCforever
    jonesMUFCforever Posts: 28,898 Forumite
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    Have you investigated the option of getting new finance to repay the (presumed) balloon payment - thus avoiding the excess mileage charge? Then sell the car privately and repay what is owed.
  • Eonel
    Eonel Posts: 451 Forumite
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    £2100 is a huge mileage charge. I am with JonesMUFC. There must be someway to make the balloon payment and immediately sell the car for less than a £2100 loss. Credit card, family member??
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