Ending PCP early - SKoda Finance

Jamesyg27

A good few months ago I entered into an agreement with Skoda Finance for an Octavia vRS.

Ive not had any issues with it, but my job situation has changed, and Im doing a lot more miles - i.e. 20k more a year!

I rang them and informed them of the changes, but they have stated I am not able to alter mileage or payments.

I asked them what would happen if I ended the agreement early, and they said I would have to cover 50% of the total cost. No problem - as I want to keep the car.

I asked them if I kept it for another 18 months, had covered the 18 months, and handed the car back - what would happen.

The assistant stated that under the Consumer Credit Act 1974 they are not allowed to charge excess mileage on the termination of an agreement and I would be entitled to simply hand the car back.

This doesn't seem like a bad option for me, as effectivly it works out at cheaper then any lease agreement I would have ever been able to get.

But can anyone verify for me - do you definatly not get an excess mileage charge on termination? And, would this in any way effect my credit rating - assuming I will make all payments until this point.

Thanks very much,

James

loofer

hmmm...
I don't know the answer to this because I don't know anything about PCP but I would be very interested to know the answer.

Seems a bit open to abuse. What I f you wanted a car for between 18-24 months but doing a lot of mileage. Take out a 3 yr contract with the minimum mileage allowance. Drive as you intend then hand it back after 18 months with no comebacks. Something not right there:rolleyes:

Hintza

Think you need this excess mileage in writing, as loofer says sounds to good to be true. Happy days if it is correct.

As for affecting your credit rating the answer should be no. But I suspect that you might end up on an unofficial blacklist and you might struggle to get car finance again. (I could be talking nonsense here but you have to see it from their point of view, they will feel you are weasling out of a deal and will not be too happy)

If it was me I think i would be resigning myself to buying it at the end of the pcp period, but you never know your luck.

Jamesyg27

loofer wrote: »

hmmm...
I don't know the answer to this because I don't know anything about PCP but I would be very interested to know the answer.

Seems a bit open to abuse. What I f you wanted a car for between 18-24 months but doing a lot of mileage. Take out a 3 yr contract with the minimum mileage allowance. Drive as you intend then hand it back after 18 months with no comebacks. Something not right there:rolleyes:

That is exactly what I was thinking - but the assistant was very clear that the rules under the credit agreement state there not allowed to charge for excess mileage on terminating an agreement.

I may well ring them back tomorrow and find out. Have just spoken to a collegue however, who apparently did just that - had 120k on his car on a 75k agreement, ended the agreement and handed it back. No charge.

Seems to good to be true - if anyone can really get to the bottom of this I'd appreciate it.

Jamesyg27

Have just found this from another forum - interesting

Really simple one:

1. If car is traded at the end of the second year the car will be valued at its current mileage, if the valuation is in excess of amount outstanding then you'll get the surplus back, if valuation is below that of amount outstanding you're liable for the difference. If you are in a position to exercise your right to Voluntarily Terminate then the above becomes irrelevant. Legally, V/T'ing an agreement cannot be recorded on your credit history - all you are doing is exercising a legal right, what the finance house can choose to do is refuse you credit in the future - that is their choice.

2. If you hand the car back at the end of the agreement you WILL be liable for any excess mileage the car has done over and above the 40k total agreed. The GMFV was calculated at 40k total, it is not unreasonable for the finance house to want to reclaim any loss that they incur by taking a car back that has done a mileage over and above that agreed.

I'm talking through 17 years worth of work in the motor industry finace sector so its based more on fact than conjecture

Lemonade_Pockets

My understanding is as above. Although I've never had any first hand experience of a customer VTing on a PCP.

However you almost definitely will be "blacklisted" for motor loans. So you may find it difficult getting a loan such as HP or a PCP which is secured against a car in future.

As i've mentioned on here before i had a customer that had done it either 2 or 3 times and it was impossible to get him passed on finance for a motor loan. In the end after speaking to the Rep (I really needed that last unit) RFS agreed to lend him the money as a personal loan to prevent him VTing again. That was a few years ago when credit was free and easy so i guess they are even more carefull about it now.

shaunandelly

Most pcp contracts have an excess mileage charge at end of term.

harveybobbles

It wont affect your credit, but the same finance company wont want to deal with you again if you VT a car.