PCP car finance - Handing car back

AfterDark

When car was purchased from my dealer the sales rep told me after 3 years I had the option to hand the car back and as long as I had not done extra miles than agreed, the agreement would end and no more payments would be taken ect.

In Feb my 3 years will be up and I'm thinking about handing it back to them to get something abit more economical to run. I have stayed within the agreed miles per year. However the sales rep told me all I had to do was to take the car up and had him the keys back to end the agreement. I'm sure it's not going to be as easy as he's made out. Can anyone confirm what the procedure is for ending the agreement ?

tobyjug

I am not sure if I am going to be right with this but this is what happened to me. The finance on my toyota was with toyota finance not the garage. My deal was finished and I had been sent the final settlement figures.

I wanted a new car not a toyota so I went to mini, agreed a deal phoned toyota finance to get an exact settlemet figure. mini finance paid off the settlement and I signed a new agreement with Mini.

I had done over the limit with miles and I would have had to have paid quite a bit. If you are going to get a new car it might be worth seeing if what they will offer in part exchange is more than the settlement figure.


I phoned and spoke direct to Toyota finance they talked through all the options with me without having to talk to a dealer who will always have selling another car to you in the back of their minds.

xycom1

It depends on who the agreement is with, all the manufacturers/finance companies will be different. Generally, you give them notice that you wish to hand back the vehicle as opposed to purchasing it, it will either be collected or you will be told where to return it, and it will be inspected to ensure that any damage falls within their defined 'fair wear and tear' guidelines, that you have not exceeded the agreed mileage and that all parts of the car/accessories are being returned as agreed (locking wheel nut key, toolkit, spare wheel, radio face, nav discs, etc.).

Who is your agreement with? My recent experience was in handing back a vehicle under agreement with MB Financial Services.

AfterDark

Thanks, on my finance docs it says the finance is meant to run for 4 years, but the sales rep told me I could hand it back after 3 years ?

Car purchased from major car chain, finance showing up as BMW.

CDC2011

PCP deals tend to have 3 options:
1) Pay all the finance and keep the car at the end of the term.

2) Use the car as a part ex on another new car - you don't necessarily have to go with the same manufacturer.

3) Hand the car back and not pay the final purchasing balloon payment. Providing the car is in decent condition and you haven't gone over your miles then its all done with.

However, you can do any of these options earlier than the agreed term. I.e. if you're saying your deal is 4 years, you could part ex the car now even though your term isn't up yet - you could also hand the car back without owing anything, providing you have paid off the minimum amount as stated in your contract.

If you want another new car then I would suggest going with Option 2 - the finance company will simply provide a settlement figure which is then used to help form your next finance deal / purchase...

E.g:
Part Ex value of old car: £5000
Settlement value: £4000
Deposit for new car: £1000

It's normally quite straight forward whatever option you go with.

We did hand back my husbands car last year about 2/3rds through the term. All I did was write to the finance company to say that I wanted to give the car back and they wrote back outlining their pick up process and confirming how much was outstanding (which was nothing as we'd paid a certain figure off already).

meer53

I've had cars on PCP and handed them back both at the end and half way through with no problems. I've never exceeded the annual mileage and never had to pay anything extra. Your contract usually tells you how much you need to have paid before you can hand back early.

AfterDark

Thanks for the very helpful replies, Will get writing to the finance company

milliemonster

If you're planning on handing it back after 3 years though, you will need to MOT it before they will take it back, I had a Renault Clio on a PCP deal a few years ago over 3 years and it had to have FSH with Renault and MOT'd before they would take it back, it was collected from my house and I thought that would be the end of the matter, until they debited £3500 from my account at the end of that month as the balance outstanding on the agreement! (there was a mix up and they thought that I had kept the car), it took a couple of weeks to sort out and during that time I was massively overdrawn incurring other charges, my bank were blaming Renault, Renault were blaming the bank etc, it was a bit of a nightmare but was sorted in the end, so if you do go down this route, I would advise you to cancel your DD after you hand your car back!

Jayceeay123

When you hand back mid term, does it affect your credit rating?