Voluntary Termination, any issues?

MSM78

Hello All

My cars PCP / HP agreement ends in January and I can either hand it back or pay off the outstanding baloon and keep it. I could sell it and pocket anything over the outstanding finance and may will attempt this but, for the purposes of my situation assume it would be a hand it back situation.

I'm on the verge of ordering my next car which I would need to do by the end of the month to secure the current deal on the table (possible sales tactic I know) but by doing so the new car would likely arrive at the end of November, beginning of December meaning I would I effect be in the position of having an overlap.

I've contacted the finance company (BMW) to see if there is any scope to end my agreement early, as after all I am buying another car from them and they've said, yup, no problem and that I can voluntarily terminate my agreement at any time now as I've paid off more than 50%.

They've assured me this is very normal, happens all the time and that it will have no impact on my credit rating whatsoever (I'm extremely anal about my credit report)

Is this true? They have said it will be shown as a voluntary termination and I can't help but think that could be taken as I've not honoured a credit agreement in some way? Could this not impact future lending?

I've had a quick search and some say no probs, others say could be detrimental?

Anyone have any experience, advice?

molerat

Are the dealership not sorting out the finance for you ? Is the car p-ex value more than the balloon payment ? This is what dealerships do.

It is 50/50 whether a VT on your credit file will have any effect, shouldn't do but who knows what financial institutions will think in the future.

MSM78

Hi,

Thanks for the reply. To clarify....

It's a slightly unusual situation in that it is not a normal 'retail' sale.

It is through a scheme with BMW so its a straight discounted purchase price and finance rate.

They don't take / or are not interested in trade in's against the purchase other than to offer a simple trade value (apparently £2000 below book) which would nit cover the baloon.

I'm confident I can sell it for more than the baloon, there's equity in the car, but just wouldn't rely on that happening.

If it was a retail sale it would be like you say, a simple trade in, likely a bit of equity against the next purchase etc.

A bit of an unforeseen hassle but not unsolvable, just the voluntary termination suggestion which has thrown me a little.

pompeyred

Hi

Mine wasn't through the same company but thought I'd reply with my experience to try and help.

I requested VT, finance was with black horse. Because I took a warranty at the start this was added as a personal loan across the whole of the finance term. When I wanted to terminate there was 50% remaining of the loan (Fair enough). They asked me to pay only that amount to get the ball rolling.

2 days later BCA collected my car, the inspected the vehicle and it had 2 scratches. I signed their collection form as a fair representation of the vehicle condition (I had meticulously looked after the car otherwise, one scratch was a car park and the other a childs bike, they weren't too bad).

Within 7 days the credit record showed as settled and amount owing as zero with a special indicator of voluntary termination.

This was 2 months ago. I have since changed my credit card provider with no issues whatsoever. I do not have any adverse credit otherwise.

With credit to Black Horse, it has been about as painless as it could be, they even returned the tax disc as it had 3 months remaining. If I had to say a negative, it would be that I wished I had more use of the fuel that was in the car (I loved the car but I needed something bigger and it suited to just give it back as it were).