PCP Agreement - Can I VT?

jackl14

Hi Guys,

I got a Fiat 500 in 2013, around April. My finance is with FGA Capital.

I have called them up regarding the settlement figure as I really do not wish to carry on with the car (I hate it).

I put a down payment of £1,500 (inc dealer contribution).
My repayments every month have been £192.58

Now I am a year and four months in of this "3 year agreement" where I can hand back the keys.

I had the car valued and no garage will give me more than £7000 for an untouched, hardly used Fiat...

And somehow the remaining settle figure is £9192.55 ..... Which im struggling to figure out.

So finding over 2,000 negative equity for a new car is a huge breaker.

Does this mean I can Voluntarily terminate this agreement?

motorguy

Sounds about right.

Working with the information you've given us

The car was approx £12,250.
You put down a deposit of £1,500
You're repaying £192.58 a month for 36 months
You've about £2,000 of interest charges
You've "probably" got a GFV / balloon payment of around £5,700

You can hand the car back with nothing further to pay via the Voluntary Termination route once you have paid back 50% of the total loan agreement including interest.

I think the total loan including deposit, interest, monthly payments is coming to around £14,000.

Half of that is £7,000

Deposit (£1,500) + payments so far (£2888.70) = £4388.

You need to pay a further £2611 before you've made 50%.

Thats approx 14 more payments.

Which sounds about right. By that stage you'll be approx 29-30 months in to a 36 month agreement.

ALL of those figures will be on your finance agreement, but they're "roughly" right

motorguy

Whats so bad about the car that you *must* get rid of it?

hufc2002

You should also have a finance agreement which sets out the original loan amount.

Would also be useful to have the interest rate.

mtk1983

Hello,

We have recently moved abroad for work purposes, (permanent move), and as the move was a sudden one and basically rushed I am trying to finalise the VT of one of our cars with Mini Finance. We bought a Mini in January 2012 on a 4 year PCP deal, (however the agreement states "Hire Purchase" - not sure if there is much of a difference), which had a 6K balloon payment at the end of the term should we wish to purchase the vehicle outright.

Obviously if we had stayed in the UK we would have waited until the term was almost up then handed the vehicle back, and avoided the balloon payment at the end.

I have been in contact with Mini Finance to discuss a VT, however they are sticking to including the optional balloon payment within the VT cost. Are they able to do this? Surely the balloon payment is optional and they cannot include this within any VT cost calculations as the value of the car currently is greater than any GFV?

To my mind we are more than half way through the term, and have made more than half the payments we would have made to Mini Finance, however when you add in the balloon payment the amount payable under the agreement increases drastically.

I have not found any information on this, and I am hoping someone shed some light on this.

heartbreak_star

Don't most finance companies frontload interest as well, which can affect settlement?

HBS x

OddballJamie

If it's HP with balloon, then the final purchase payment is compulsory. Mini's keep their value fairly well, have you considering selling it to a garage to clear the finance?

Regarding the VT, the 50% is of the whole financial package including balloon and interest.

Tilt

motorguy wrote: »

Whats so bad about the car that you *must* get rid of it?

Yes, I am wondering the same.

Presumably the OP went to have a look at/test drove one before buying it. Bit strange then he is now saying that he "hates" it.

Perhaps he can enlighten us?

JustinR1979

Tilt wrote: »

Yes, I am wondering the same.

Presumably the OP went to have a look at/test drove one before buying it. Bit strange then he is now saying that he "hates" it.

Perhaps he can enlighten us?

Maybe he feels a bit of a tilt in a small car

molerat

mtk1983 wrote: »

Hello,

We have recently moved abroad for work purposes, (permanent move), and as the move was a sudden one and basically rushed I am trying to finalise the VT of one of our cars with Mini Finance. We bought a Mini in January 2012 on a 4 year PCP deal, (however the agreement states "Hire Purchase" - not sure if there is much of a difference), which had a 6K balloon payment at the end of the term should we wish to purchase the vehicle outright.

Obviously if we had stayed in the UK we would have waited until the term was almost up then handed the vehicle back, and avoided the balloon payment at the end.

I have been in contact with Mini Finance to discuss a VT, however they are sticking to including the optional balloon payment within the VT cost. Are they able to do this? Surely the balloon payment is optional and they cannot include this within any VT cost calculations as the value of the car currently is greater than any GFV?

To my mind we are more than half way through the term, and have made more than half the payments we would have made to Mini Finance, however when you add in the balloon payment the amount payable under the agreement increases drastically.

I have not found any information on this, and I am hoping someone shed some light on this.

The amount you need to have paid including any deposit is shown on the agreement, have you paid that ?

motorguy

mtk1983 wrote: »

I have been in contact with Mini Finance to discuss a VT, however they are sticking to including the optional balloon payment within the VT cost. Are they able to do this? Surely the balloon payment is optional and they cannot include this within any VT cost calculations as the value of the car currently is greater than any GFV?

To my mind we are more than half way through the term...

Its not halfway through the term, its once you've paid 50% of the total cost of the transaction, including deposit, all the monthly payments and the balloon payment.

With a 4 year PCP deal, this tends to happen around a quarter to half way through the fourth year, dependant on the deposit.

You have rights under the consumer credit act, and one of those rights is that you can hand the car back once you paid more than 50% of the transaction cost (providing you have taken reasonable care of it) with nothing further to pay. In theory you could hand the car back now, but they would bill you for the difference between what you have paid and 50% of the total cost.