Car financed with PCP - early termination

Dalglish

Hi
I have question on a car financed over 3 years on a Personal Contract Purchase (PCP) basis which I am now approaching the halfway point at 17 months.

Due to a job change, I no longer can afford the luxury of a car and was advised by a friend that a brake clause could be exercised by myself at the halfway (18 month) point and settle the agreement with a reasonable sum.
The finance company want me to pay approx £5,000 above the open market value of the car which I would have to dispose of myself. This if course will be financially difficult.
The finance agreement is regulated under the Consumer Credit Act 1974 and early termination is referred to as possible at any time, subject to payment of the outstanding finance.

To end, my question is can I terminate this agreement as my friend believes at the midway point for substantially less than the £5000 the company expect?
Trading standards do not take personal calls and return questions raised by the Consumer Direct helpline people.
Thanks to all in anticipation.
Steve

grumbler

Dalglish wrote:

...The finance company want me to pay approx £5,000 above the open market value of the car which I would have to dispose of myself. This if course will be financially difficult.
The finance agreement is regulated under the Consumer Credit Act 1974 and early termination is referred to as possible at any time, subject to payment of the outstanding finance.

To end, my question is can I terminate this agreement as my friend believes at the midway point for substantially less than the £5000 the company expect?...

I am not an expert...
However, IMO 'the open market value of the car' has nothing to do with 'the outstanding finance'. The latter depens on the initial amount borrowed, APR and the loan term. From your post one can only guess the term of the loan, let alone the amount, APR and the actual settlemt figure ...

P.S. As far as I remember (correct me!) voluntary early termination works only with Hire Purchase contract and you have to pay the half of the original price...