Voluntary Termination of PCP

Pearse67

I purchased a new Toyota Aygo almost three years ago and am coming to the end of my PCP agreement this summer. I have gone over my mileage allowance by a fair bit and want to know can I voluntarily terminate the agreement and give the car back? I have paid well over half of the financed amount. Will this cost me anything extra? Will this affect my credit rating?

I have had the car valued by the dealer at more than my final payment and know that I could pay the balloon payment and sell the car at the valued amount and make money on it but I just dont have that kind of money right now.

Any help on whether I have misunderstood the agreement or there are further options available to me would be appreciated, cheers.

nomoneytoday

A VT doesn't impact your credit score.
However, if the car is worth more then why not sell it to the dealer, and he can pay off the PCP debt, and give you the balance?

Hintza

You will be charged for the mileage over at a rate per mile you need to calculate how much this will cost. I very much doubt it will be cost effective to send it back with so little time left to run and you might struggle to get finance again (for a car) in the future.

You say the dealer has valued it at over the balloon payment but you would not receive this value.

For example:- if pcp says balloon is £3k and dealer says it is worth £4k then you would be throwing away £1k BUT because you are over the mileage let's say by 10,000 miles at 8p/mile then they would subtract another £800 off. So instead of £1k profit you would have a potential loss of £800 (ie you would have to pay that).

Hintza

nomoneytoday wrote: »

A VT doesn't impact your credit score.

True but they won't be keen to give you finance again.

Lemonade_Pockets

No it won't affect your credit rating. But it may make it harder to borrow money secured against a car in the future e.g. HP or PCP.

I would phone a few dealers and see if they will buy it! Start with the one that has already valued it. If you sell it to them they will take car of settling the finance and pay you the difference - jobs a fish.

Pearse67

Cheers for the advice,

The impression I was under was that I would have to make the balloon payment first then consider selling it (which I cant really afford to do right now).

The dealer valued it at £4300, the balloon payment is £3400 and was willing to give me the equity as deposit on a new car. I was unhappy with the car offered and declined so he threw the toys out of the pram and said ok your on your own.

Lemonade_Pockets

If you are selling privately! If you are selling to the trade they can settle on your behalf and pay you the difference. Ring you finance company to check first if your not sure. If they say no it'd be the first one i've ever come across!

Doozergirl

If it was sold privately, couldn't you have the buyer make the cheque out to the finance company to settle the debt?

I bought a car this way, made the cheque out to BMW finance instead of the vendor

AdrianHi

Doozergirl wrote: »

If it was sold privately, couldn't you have the buyer make the cheque out to the finance company to settle the debt?

I bought a car this way, made the cheque out to BMW finance instead of the vendor

I know someone who has done this many times with no trouble at all. Get the buyer (private individual or car dealer) to pay the finance company and you any balance.
The guy in question has even done it where the cars value is less than outstanding finance, both he and buyer paid the finance company the respective amounts to settle it.