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Excess mileage charge on a PCP
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# 1
rs65
Old 06-05-2013, 3:10 PM
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Default Excess mileage charge on a PCP

I am hoping for a definitive answer on when an excess mileage charge applies.

1. Trade it in before the end of the period - doesn't apply (but mileage affects the trade in value)

2. Return it at the end of the period - excess mileage charge applies

3. Buy the car at the end of the period - doesn't apply

4. VT - does excess mileage charge apply?

My contract says I can terminate early as long as I have paid half and taken reasonable care of the car. No mention of what the mileage should be at VT point.

Does anyone know for definite?
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# 2
CB1878
Old 06-05-2013, 3:38 PM
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Your VT should have no issues with mileage on a vehicle, taxi drivers have done it for years on HP agreements. However, it will be an awkward process as the finance company are hardly likely to help you along the way.

Your points are pretty much spot on, but my view would be go an see what deal you can get if you part ex early, the vehicle will simply have an exchange value and no excess mileage charges should apply if you part ex.

If you can get a decent deal this way it will be far easier in the long run, if not then VT. I would suggest that you get another finance deal passed before you initiate a VT, might be easier to do in the long run.
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# 3
rajarr
Old 06-05-2013, 3:43 PM
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If you are on HP you will never have to pay an excess mileage charge, on a PCP you have a set amount of miles you can do annually and if you go over this you get a set charge per mile you have gone over.

When you VT the car is graded under the BVRLA fair wear and tear guidelines, if the damage isn't deemed fair wear and tear they will look for you to pay to repair any damage
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# 4
rs65
Old 06-05-2013, 3:54 PM
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Quote:
Originally Posted by CB1878 View Post
Your VT should have no issues with mileage on a vehicle, taxi drivers have done it for years on HP agreements. However, it will be an awkward process as the finance company are hardly likely to help you along the way.

Your points are pretty much spot on, but my view would be go an see what deal you can get if you part ex early, the vehicle will simply have an exchange value and no excess mileage charges should apply if you part ex.

If you can get a decent deal this way it will be far easier in the long run, if not then VT. I would suggest that you get another finance deal passed before you initiate a VT, might be easier to do in the long run.
Thanks. I am considering trading in at the moment (traded in the last time too).

The reason I ask is that I am being offered a deal based on 15,000 miles - which will reduce if I base it on 10,000. I am currently doing about 18,000 a year.

If I never plan to let a deal run its course, I am financially better off on a lower mileage deal as it will never affect me.

Seems a no-brainer, hence why I wanted to check.
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# 5
CB1878
Old 06-05-2013, 3:56 PM
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Quote:
Originally Posted by rajarr View Post
If you are on HP you will never have to pay an excess mileage charge, on a PCP you have a set amount of miles you can do annually and if you go over this you get a set charge per mile you have gone over.

When you VT the car is graded under the BVRLA fair wear and tear guidelines, if the damage isn't deemed fair wear and tear they will look for you to pay to repair any damage
Would be the same if you VT on either PCP or HP, so if you have a big dent in the side then you could be forced to pay for a repair. As I said if you can, I would part ex early. If you have to VT then make sure the vehicle is what you would expect for fair wear and tear. If there is a big dent, get it done yourself, it will be far cheaper than the prices they will want to charge.
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# 6
CB1878
Old 06-05-2013, 4:00 PM
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Quote:
Originally Posted by rs65 View Post
Thanks. I am considering trading in at the moment (traded in the last time too).

The reason I ask is that I am being offered a deal based on 15,000 miles - which will reduce if I base it on 10,000. I am currently doing about 18,000 a year.

If I never plan to let a deal run its course, I am financially better off on a lower mileage deal as it will never affect me.

Seems a no-brainer, hence why I wanted to check.
Have you checked what the cost of the 18k a year is against the 10k? I am sure you have, but I seem to remember that it was normally far cheaper upping you miles than paying an excess mileage charge (which I know you will never do, but it would give you the option to run to the end of the deal if you wanted?)

Does seem as though you have it sussed though
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# 7
rs65
Old 06-05-2013, 4:01 PM
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Quote:
Originally Posted by rajarr View Post
When you VT the car is graded under the BVRLA fair wear and tear guidelines, if the damage isn't deemed fair wear and tear they will look for you to pay to repair any damage
Thanks, but the question was specifically about mileage on a PCP deal.
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# 8
rs65
Old 06-05-2013, 4:08 PM
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Quote:
Originally Posted by CB1878 View Post
Does seem as though you have it sussed though
I keep thinking I've got it sussed.

If I go for 10,000 miles, I save about 29 a month compared to 15,000 miles.

This gives a potential excess mileage charge of 8,000 times 4 years at about 8.5p a mile. A potential exposure to a charge of 2,720. But as long as I don't let the deal run its 48 months, I have no excess mileage charge and have saved 29 a month.

(I think)
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# 9
neilmcl
Old 06-05-2013, 4:49 PM
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For us laymans - VT = ?
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# 10
TadleyBaggie
Old 06-05-2013, 5:10 PM
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Quote:
Originally Posted by neilmcl View Post
For us laymans - VT = ?
Voluntary Termination.
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# 11
forgotmyname
Old 07-05-2013, 2:07 PM
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The theory is there and its been mentioned a few times. But personally i would prefer the figure to be closer to take the risk.

If it doesnt pan out you risk a bill of 1400 ish over what you saved?

Seems too easy for them to lose money. Handing back a car thats worth substantially less.
If its a loophole they have not plugged yet then take advantage now whilst you can.

Is it worth a gamble? 1400 ?
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# 12
motorguy
Old 07-05-2013, 2:48 PM
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Quote:
Originally Posted by forgotmyname View Post
The theory is there and its been mentioned a few times. But personally i would prefer the figure to be closer to take the risk.

If it doesnt pan out you risk a bill of 1400 ish over what you saved?

Seems too easy for them to lose money. Handing back a car thats worth substantially less.
If its a loophole they have not plugged yet then take advantage now whilst you can.

Is it worth a gamble? 1400 ?
I dont think its a gamble. You are exercising rights of VT. These are actual rights not related to a PCP agreement. These rights dont make reference to the mileage on the car.

I think its a loophole the finance company rather like to keep quiet about.
Regards

Paul
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