Voluntary Termination on PCP car agreement

kevvo
kevvo Posts: 2 Newbie
Hi there,

I know this will have been covered before, but I'm in a situation where I've completed 2 out of three years on a PCP finance agreement on a car with BMW finance. My work situation is changing, so I no longer require the car. At present the settlement figure is too high (versus the actual resale value of the car), therefore I'm considering a VT. Does anyone know what the options are here? Specifically:
  • Does the '50%' I have to have paid off relate to the agreement value, or the whole car price at time I took the agreement?
  • Will this affect my credit rating?
  • Are there any other options rather than trying to sell the car?

Thanks for your help!:cool:
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Comments

  • antrobus
    antrobus Posts: 17,386 Forumite
    I believe that it is 50% of the total amount that would have been paid had the agreement run its full course, which I imagine would be the agreement value.

    Mind you, I'm not so sure that it's ever worthwhile trying to VT a PCP agreement with a balloon payment. (And most of them have them.)
  • Captain__
    Captain__ Posts: 12 Forumite
    edited 15 April 2012 at 8:01AM
    In short... or not....

    50% relates to the agreement value (so if you have a £20k finance agreement, you need to owe less than £10k).

    Generally if you Volutarily Terminat (VT) your vehicle, it does not affect your credit rating as it is a consumer right, however I believe that when they mark your finance as 'settled' on your credit file, they are able to put a note on it stating that you VT'd the vehicle. This will not affect you for most things, but if you are refinancing a new vehicle, other finance companies may be wary of you (This stays on your credit record for a number of years, and vehicle finance people see people like me do a PH (no limited mileage like a PCP) put an extreme amount of mileage on the car, and handback a worthless vehicle whilst still owing 50%, this can mean they actually loose money! This does not affect you for personal loans or mortgages because these clauses are not available on these financial products.

    Lastly, as you said, the vehicle is worth less than the finance. I recommend you phone BMW finance to ask them about your options, you may be able to VT at 2 years, but that depends on your PCP APR and the final Guaranteed minimum future value. If the car was £20 with no deposit, and the GMFV of the car is £10, you wil never be able to VT it, likewise, high APR figures with high monthly repayments mean it is harder still to get to that magical 50%. BMW will be able to advise you if you are able to VT the car. Lastly, BMW may be willing to just take the car back. I experienced this with a BMW finance manager trying to sell me a 1 series a few years ago, they seemed to think that after 2 years on a 5 year PCH BMW would still take the vehicle back. I could not understand why, he just assured me they would. He can not lie to me, as he is covered by the FSA as a financial advisor, and that would be mis selling a financial product, but I was weary of the validity of this and so walked away from the deal. Maybe BMW do something nice in their small print. Again, BMW should be able to advise you of your options.
    Hope this helps.
  • I have voluntarily terminated a PCP scheme after reaching the 50% stage. The finance company were really easy to deal with (Renault) they arranged to have the car inspected and collected. They then wrote to me to confirm that I did not owe anything and that was that. I have am now on my second PCP scheme since the VT so it appears not to have any adverse effect on credit rating.
  • rs65
    rs65 Posts: 5,682 Forumite
    First Anniversary Name Dropper First Post Combo Breaker
    kevvo wrote: »
    [*]Does the '50%' I have to have paid off relate to the agreement value, or the whole car price at time I took the agreement?
    My last car was a BMW on PCP and the agreement specified the actual amount of payment required to VT.
  • Thanks for all the helpful responses. I'm not quite in a position where it is urgent to end the deal, but I may contact BMW now to see what options there may be when my career change kicks in, in about 3-6 months time.

    Unless anyone wants to buy a mini cooper at a grand more than market value...! ;-D
  • blacksta
    blacksta Posts: 919 Forumite
    kevvo wrote: »
    Thanks for all the helpful responses. I'm not quite in a position where it is urgent to end the deal, but I may contact BMW now to see what options there may be when my career change kicks in, in about 3-6 months time.

    Unless anyone wants to buy a mini cooper at a grand more than market value...! ;-D

    Computer says no
    I owe £3233 @ 0%

  • I am new to this and am looking for some help. I had finance withBlackhorse. I did a Voluntary Termination and completed all paperwork. I wastold to drop the car off at a car auction site. i did this in November 2011. Ijust received a statement from them (April 2012) for £7480. When i called theysaid that this was due to the car still sitting at the auction house and it hadnot been sold. Due to this they can terminate the finance agreement and i amstill liable for the balance. Furthermore, it will show up a bad credit on mycredit reference. What can i do???? i am starting to feel very sick about this.
  • traz39
    traz39 Posts: 146 Forumite
    edited 21 April 2012 at 8:56PM
    can anyone help we picked up a car on the 14/04/2012 signed agreement day before not happy with car can we return it without problems
  • I am about to call BMW to get a voluntary termination on my car. I am over the 50% payment mark which is fine.I was just wandering if anybody knows what exactly it is that the collections company checks for when they come to pick up the vehicle?????? I.e wear and tear, damage, faults etc???? And does doing at VT effect your chance of getting credit again for another vehicle in the future???

    Any information on this will be greatly appreciated. Thank you.
  • meer53
    meer53 Posts: 10,217 Forumite
    First Post First Anniversary Combo Breaker
    11madlad11 wrote: »
    I am about to call BMW to get a voluntary termination on my car. I am over the 50% payment mark which is fine.I was just wandering if anybody knows what exactly it is that the collections company checks for when they come to pick up the vehicle?????? I.e wear and tear, damage, faults etc???? And does doing at VT effect your chance of getting credit again for another vehicle in the future???

    Any information on this will be greatly appreciated. Thank you.

    From my experience they go over the car with a fine toothed comb ! I was waiting for the bloke to get out his magnifying glass the last time i handed a car over.(Both on PCP) He checked inside and out ! There should be details in your contract about what is deemed acceptable. My car was driven off my drive straight to the car auction ! I've done this twice in the past and luckily haven't had any comeback.
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