Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Sara Jussab
    • By Sara Jussab 29th Aug 17, 12:13 AM
    • 1Posts
    • 0Thanks
    Sara Jussab
    VW PCP finance
    • #1
    • 29th Aug 17, 12:13 AM
    VW PCP finance 29th Aug 17 at 12:13 AM
    Hi,
    I am 21 years old and I have a VW polo 1.0 petrol se on finance (65 plate) 2015 model so ive had it on finance for two years on PCP. I pay around £174.07 a month , so far ive paid £4176 for two years and i recently got a letter from of a settlement figure of around £9000 approx , and my agreement is for 4 years but I want to part exchange with a new model but im confused what to do and when to part exchange, like wait another year. I dont quite understand how I save money and when i recently went to the showroom to enquire about the new polo beats version they told me for £500 deposit towards it and £210 a month which i found was expensive as my current mileage for my car is only £5000 for the past two years, so surely they shud be already taking the deposit from what my balance is , but i dont know how it works? Anyone can help me how it works, quite confused?
Page 1
    • wgl2014
    • By wgl2014 29th Aug 17, 7:55 AM
    • 364 Posts
    • 208 Thanks
    wgl2014
    • #2
    • 29th Aug 17, 7:55 AM
    • #2
    • 29th Aug 17, 7:55 AM
    Have you had a look to see what your car is worth as a trade in?

    If it's more than 9k (unlikely) then you have some extra value in the car, if it's less you will need to cover the shortfall if you change.

    Remember that PCP has three payment phases, a deposit followed by a number of monthly payments with a lump sum at the end. Some people seem to misunderstand and think they get the final figure back somehow.
    • daveyjp
    • By daveyjp 29th Aug 17, 10:55 AM
    • 7,159 Posts
    • 5,561 Thanks
    daveyjp
    • #3
    • 29th Aug 17, 10:55 AM
    • #3
    • 29th Aug 17, 10:55 AM
    OP as you have stated 'I don't know how it works' do not enter any car dealership until either you do or you go with someone who does.

    You will be a sales staff dream customer.
    • facade
    • By facade 29th Aug 17, 12:10 PM
    • 2,905 Posts
    • 1,484 Thanks
    facade
    • #4
    • 29th Aug 17, 12:10 PM
    • #4
    • 29th Aug 17, 12:10 PM
    The best way to save money is to pay the £9000 settlement figure in cash, and run the car for another 10 years, which works out at £75 a month.

    The second best I suppose is to keep on with the pcp until it ends, and then either hand it back if it is worth less than the final payment, or pay for it if it is worth significantly more.


    The absolute worst way to "save" money (or the best way to waste it ) is to swap the car for another pcp and roll up the current negative equity into the deal (unless you like paying interest on interest)

    Especially as you are after the same car, but 2 years newer!
    I want to go back to The Olden Days, when every single thing that I can think of was better.....

    (except air quality and Medical Science )
    • rhysadams
    • By rhysadams 29th Aug 17, 1:54 PM
    • 206 Posts
    • 50 Thanks
    rhysadams
    • #5
    • 29th Aug 17, 1:54 PM
    • #5
    • 29th Aug 17, 1:54 PM
    On some PCP deals, if you pay a certain amount you can actually do a termination. I managed to do this on an Audi A6 with VWFS.
    • facade
    • By facade 29th Aug 17, 3:45 PM
    • 2,905 Posts
    • 1,484 Thanks
    facade
    • #6
    • 29th Aug 17, 3:45 PM
    • #6
    • 29th Aug 17, 3:45 PM
    To VT (voluntary terminate), handing back the car in good condition and walking away with nothing whatsoever, you have to pay whatever it takes to get to 50% of the amount financed plus interest. Unless you paid a huge deposit, you won't be anywhere near this point 2 years into a 4 year pcp.

    The easiest way to do this is keep on with the current pcp until the VT point is reached. You then will probably want to buy another car......
    I want to go back to The Olden Days, when every single thing that I can think of was better.....

    (except air quality and Medical Science )
    • neilmcl
    • By neilmcl 29th Aug 17, 4:14 PM
    • 10,237 Posts
    • 7,158 Thanks
    neilmcl
    • #7
    • 29th Aug 17, 4:14 PM
    • #7
    • 29th Aug 17, 4:14 PM
    On some PCP deals, if you pay a certain amount you can actually do a termination. I managed to do this on an Audi A6 with VWFS.
    Originally posted by rhysadams
    You can voluntary terminate on all finance deals, it's a statutory right.
    • G_M
    • By G_M 29th Aug 17, 6:23 PM
    • 41,985 Posts
    • 48,599 Thanks
    G_M
    • #8
    • 29th Aug 17, 6:23 PM
    • #8
    • 29th Aug 17, 6:23 PM
    You can voluntary terminate on all finance deals, it's a statutory right.
    Originally posted by neilmcl
    Yes. At a cost.

    Trouble is PCP is the car is not yours and you're financially locked in. You can't just do what ou want, when you want, without costs.

    have stated 'I don't know how it works' do not enter any car dealership until either you do or you go with someone who does.

    You will be a sales staff dream customer.
    As was the case 2 years ago........
    • lostinheaven
    • By lostinheaven 30th Aug 17, 1:57 PM
    • 157 Posts
    • 74 Thanks
    lostinheaven
    • #9
    • 30th Aug 17, 1:57 PM
    • #9
    • 30th Aug 17, 1:57 PM
    OP it doesn't look like you'll be in a position to voluntarily terminate your PCP agreement yet but, I created this spreadsheet which you can use to check for yourself by completing the yellow boxes with the relevant information: https://docs.google.com/spreadsheets/d/1PXq4Cw0erNDoKeiynwCTtotrmkn5kLEdA9e2HsXWyQ8/edit#gid=829434530
    • worried jim
    • By worried jim 30th Aug 17, 2:07 PM
    • 8,698 Posts
    • 13,276 Thanks
    worried jim
    Op - I suggest you watch last nights ch4's dispatches to prevent yourself getting spanked again.-

    http://www.channel4.com/programmes/dispatches/on-demand/66549-001
    "Only two things are infinite-the universe and human stupidity, and I'm not so sure about the universe"
    Albert Einstein
    • bigadaj
    • By bigadaj 3rd Sep 17, 8:12 PM
    • 10,736 Posts
    • 7,025 Thanks
    bigadaj
    What is the consequences if someone was to terminate their 4 yr pcp at 1y7m which was not near the VT point and not pay the remaining balance?
    Originally posted by DD1A
    You'd be pursued for the balance, just like any other loan on which you'd defaulted.
    • Tarambor
    • By Tarambor 3rd Sep 17, 9:11 PM
    • 1,612 Posts
    • 1,104 Thanks
    Tarambor
    How about if something failed on the vehicle could it be rejected this far in?
    Originally posted by DD1A
    Not a chance. You only get that option for the first few weeks/months, certainly not even a year let alone two. And if something did fail which wasn't covered by the warranty it would have to be fixed at your expense as VT requires a vehicle to be returned in a decent roadworthy and running state. So pouring a load of sugar in the tank to shaft the engine so you can get out of a PCP deal you wish you'd never taken out isn't likely to work out how you want it to.
    • Mercdriver
    • By Mercdriver 4th Sep 17, 2:52 AM
    • 1,444 Posts
    • 971 Thanks
    Mercdriver
    Vehicle has 3 years warranty I believe and as stated in last post had a fault after first 2 months which took 2 weeks to fix.
    Ha ha not that daft to pour sugar in it
    Originally posted by DD1A
    The warranty is to fix faults that are covered by the warranty. It is not a return or replace warranty. Much the same as most consumer products.

    Maybe you should have waited until you were mature enough to embark on a serious financial commitment.
    • mark5
    • By mark5 4th Sep 17, 1:34 PM
    • 1,201 Posts
    • 816 Thanks
    mark5
    Op I sometimes buy cars on pcp myself, what I would say is never visit the garage/ salesman until you want to or need to change your car.
    They always find a way of trying to get you in to a new car instead of keeping the old one, it's how they earn a living.
    Unless you put down a large deposit which I very much doubt then you will probably have little or no equity in your current car, these deals are designed to keep you financing new cars every few years.
    • deason_uk
    • By deason_uk 7th Sep 17, 9:21 PM
    • 20 Posts
    • 0 Thanks
    deason_uk
    I'm with someone who quoted to know what to do before you walk in the garage.

    First thing you need to do is tell the dealer you want a valuation on your vehicle first....if it's not 9k then walk away. Or if you are that desperate find some cash for the difference. Dunno what the dealer offered but it will not make you in good position.

    You like lots of people are getting itchy feet at the two years, dealers will say they can get you out of it, but reality is you are never going to be in a good position.

    Have you looked at GLASS or guide pricing? How much they are going for on Auto Trader etc?

    My view is a lot of people don't have decent cars like a polo so give it a clean, keep it hoovered and appreciate it for another year or so until you are in a better position on the deal
    • Mercdriver
    • By Mercdriver 7th Sep 17, 11:37 PM
    • 1,444 Posts
    • 971 Thanks
    Mercdriver
    @MercDriver
    No one can predict their future job and circumstances changed hence the questions
    Nothing to do with maturity
    Originally posted by DD1A
    This post has nothing to do with maturity and everything to do with immaturity:

    Cut a story short 2 vwfs payments each month over £700 is becoming a bit annoying just gathering some possible options.
    Originally posted by DD1A
    You made the decision to enter the agreements. No-one held a gun to your head to make you sign yourself up to payments of £700 a month. Take some responsibility for your own free decisions.

    Educate yourself on what the financial agreements mean and what is likely to happen in certain circumstances. Then make a decision based on that.

    You are 21 now. If you simply walk away from it at this stage, VWFS will come after you for the money. They will apply for and attain a County Court Judgement against you. This will put you in a very difficult position for credit for 6 years, and then you will still have problems because of your lack of credit.

    You meet the partner of your dreams and want to move in together. Problem: You can't get a mortgage, and decent landlords won't rent to you because of a poor credit score as found via an agency doing a credit check on you.

    Believe me, I've been there. I had difficulties paying university fees for postgraduate studies, and the CCJ I got meant I couldn't get any credit until I was 29. Then I had a blank credit history, which at that age has lenders wondering why I had no credit - one assumption might be previous credit history issues. Which left me at the mercy of Capital One's basic card with its 30% APR. I wouldn't have got a mortgage if I tried.

    Think very carefully about your next step. Study car deals. Get wise. You need to get this deal at least to its VT stage, and even that can affect your credit history. Having said that on PCPs the VT stage can be only a few months before the end of the term, and might be just as well to take it to the end of the PCP period and hand the car back.
    • bigadaj
    • By bigadaj 8th Sep 17, 6:03 AM
    • 10,736 Posts
    • 7,025 Thanks
    bigadaj
    There was nothing said that the pcp could not be met each month, the dream lady is in my life and holding a mortgage already thanks for your input.
    Originally posted by DD1A
    Well all sounds fine and dandy then, what are you complaining about.

    The solution is to use this experience as a moderately expensive lesson, read up on what you are financially committing to and assess whether you can afford things in your current situation but also if something changes.

    It ain't rocket science.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

280Posts Today

1,483Users online

Martin's Twitter
  • RT @TfLTravelAlerts: Oxford Circus and Bond Street stations now both reopened and all trains are stopping normally.

  • RT @metpoliceuk: We have not located any trace of suspects, evidence of shots fired or casualties. Officers still on scene. If you are in a?

  • My hopes and prayers are that this turns out to be nothing. Stay safe.

  • Follow Martin