Help please on a PCP

Dalglish

Hi

I took out a 36month personal contract purchase lease on a vehicle I used on company business, which my employer helped with a monthly cash allowance to meet the costs of.
I was informed by a colleague that a PCP is different to other types of hire purchase in that a brake on the contract can be applied at the mid point (18months) whilst return the car.
I am now at the mid point and need clarity - I have spoken to ALD, the lease company, but the girl I spoke to made me feel I was speaking chinese with a french accent and appeared not to understand my request to apply this brake.
Please can anyone help clarify? Many thanks, Sam

Lemonade_Pockets

You can technically (providing the car is in reasonable condition) hand the car back with no further further charges once you have paid half the total amount payable.

Therefore unless the car you bought has a extremely low residual (relative to purchase price) value you are probably likely to reach the 3 years before this comes into effect.

If you read the T+C's it may state the figure you need to of paid back (probably under "halves and thirds"). Or as an approximation you need to add up your deposit your monthly payment, the GFV, and any documentation fees. Once you have paid half this figure again you can hand it back.

In summary the midpoint is in the amount repayable not the term.

Also if it turns out you can exercise this right, you may find it harder to get car finance in the future.

Dalglish

Hi Lemonade

Yes what you say is how things now seem - I made the grave error of assuming a mid term of 18months would match a half of capital repaid.
I am about 10 months away from reaching the mid point in terms of cash so thats over £4k. The lease company has offered me a £5k settlement figure now but I'm undecided what to do.
To settle now, I will need a personal loan - would the interest payable on this loan be offset by the £60 per month insurance premium if I were to run the car for another 10 months?
Many thanks - Sam

Lemonade_Pockets

Sam,

I can't really say on the info that you have given.
Please supply a description of the car. Your monthly payment and GFV on the PCP. I'm assuming you would borrow the £5k over 18months?
Also it might be useful to know why you need to get rid of the car so i/we can advise accordingly.
I'm going on holiday today so won't be able to reply for a week or so but i'm sure if u provide some more info someone else will.