Voluntary Termination on PCP contract

tomspence24

Hintza wrote: »

Who ever takes out a 5k a year mileage allowance and then does 12k a year? The only people that do that are those prepared to pay the balloon at the end of the day as it is a fairly cheap way of running a high mileage car.

When I bought the car I didn't have a 80 mile daily commute, this has thus pushed up my mileage, so believe me it was not my intention to run a "cheap high mileage car." Thanks for your insightful input though.

motorguy

Hintza wrote: »

Have you any evidence you won't be charged?

The OP has a contract that is based on a certain mileage per annum they are in breach of that. The T&Cs will cover this eventuality and have an excess mileage rate which the OP will be expected to pay (+VAT).

Personally someone 'imagining' that you're going to be charged, doesnt really help here.

They are NOT in breach of contract under the terms of a VT, which is what they are doing here. Correct me if i am wrong here, but you have a statutory right in relation the Credit Act of 1974 where in the small print of the contract it states once half the total value of the car had been paid there is 'nothing more to pay'

Believing that to be the case, the only way the HP company could claim any extra cost would be through excessive wear and tear, which potentially could be triggered with particularly high mileage, however this car has average mileage so i dont see how they could trigger that?

Yes, there is a PCP hire purchase contract in place, however you have the right to 'voluntary terminate' the contract at ANY point, however after 50% has been paid the clause is specifically extended to 'you have nothing more to pay';

The O/P is NOT in breach of ANY contract if they exercise their RIGHT to VT at the 50% marker.

motorguy

Hintza wrote: »

Have you any evidence you won't be charged?

I did physically take the time to look it up on some legal sites earlier today, and that was the conclusion. Will have another look and provide links tomorrow, as opposed to someone 'imagining' you might have to pay.

Hintza

pgilc1 wrote: »

I did physically take the time to look it up on some legal sites earlier today, and that was the conclusion. Will have another look and provide links tomorrow, as opposed to someone 'imagining' you might have to pay.

You could be correct but it just doesn't sound right to me. I will be interested though to see how this pans out.

motorguy

Hintza wrote: »

You could be correct but it just doesn't sound right to me. I will be interested though to see how this pans out.

Been rooting around and there doesnt seem to be any definitive answer. There is a school of thought that says the finance companies dont want to force it to a court hearing as they think they will lose, therefore they try to recoup any potential loss under the 'fair wear and tear' clause.

Found this on the same topic, over on pistonheads which would seem to be good advice (the guy was an ex finance bloke) the bank in question was santander and it was a PCP

"I would suggest you contact Santander IN WRITING (I wouldn't trust the phone monkeys) and ask for a written confirmation of the exact criteria that is applicable to you based on your agreement. Also I would suggest that you ask for a copy of the signed fiance agreement from them, If you enclose a cheque for £10 and request for it under a "Data Subject Access Request" then they will have to send you it (and all other written record pertaining to your account), and probably wont cash the cheque anyway.

If you are lucky they may have lost the agreement, if that's the case (which is more likely than you might imagine) then you can tell them to do one if there is any come back. They won't chase you as they would have no legal standing if it ever went to court.

Also if they start cocking about threaten to raise the issue with the Banking ombudsman, that will incur them a £600 fine which they will want to avoid. This fine is valid regardless of if it has any basis, ie even if you are in the wrong, so if they have the choice of charging you a few hundred quid relating to the VT and getting a £600 fine, or just letting you walk away, they will do the latter."

Hintza

Interestingly I found this:-

http://www.motorfinanceonline.com/comment/a-hidden-bombshell

I find this all quite unbelievable and has got my devious little mind working (unfortunately not in market for a PCP deal just now though )

motorguy

From a thread over on honestjohn, but dating back a few years...

http://www.honestjohn.co.uk/forum/post/index.htm?t=37600

"These voluntary terminations, IMO can very powerful tools for avoiding hefty mileage penalties on pcp deals.
I sent a Rover back with 60,000 on the clock, racked up in two and a bit years, against a supposed allowance of 15,000 per year over 3 years.
The finance company didn't object.
When collecting the vehicle, the guy didn't check anything, although to be fair, the car was pristine, anyway.

Net effect was that I avoided paying a remaining 9k for a car which had a trade value, after Rover's demise, of about 4k.
Phew!"

motorguy

Heres that pistonheads thread....

http://www.pistonheads.co.uk/gassing/topic.asp?h=0&f=206&t=1178772&mid=0&i=0&nmt=Voluntary+Termination%3F&mid=0

Cornucopia

Does anyone have any example figures where this works to consumer's clear advantage? Still struggling to see it myself.

Hintza

Cornucopia wrote: »

Does anyone have any example figures where this works to consumer's clear advantage? Still struggling to see it myself.

Well what Paul is saying is you take a car an a very low mileage PCP deal then once 50% of the money is paid you VT it. The obvious advantage will be (for an extreme example) if you do 50k miles a year you will save a bundle.

As suggested in my link this is would appear to be a loophole which could save you lots of money.

A 2 year old 20k miles car will be worth significantly more than a 2 year old 100k mile car!