Paying off PCP early?

nicolanicola

I'm about to sign up for a PCP agreement to buy a one year old VW Golf. With the finance, I get £500 worth of servicing and £500 deposit contribution. I only get the servicing package if I keep the PCP agreement at least 6 months.

My plan is to remortgage in time for the 6 months, and pay off the finance. However, I cannot find any t&cs online for VW to see if there's a fee to exit, and how much I'll have to pay back. The loan quote shows me borrowing £18920 (the cost of the car), with a GFV of £7357.50. I can't figure out in 6 months, what I'll have to pay back in order to own my car. Will I have to pay the loan back and the GFV?

OddballJamie

You're going to loan money against an appreciating asset to buy a depreciating asset?

Personally I'm trying to pay my mortgage off as quickly as possible and would only consider increasing it for home improvements that would add value.

BlueIsTheColour

There's usually a closure fee of at least one months payment and an amount on top which I can't remember now, my OH did this recently, but look in the documents for closure fee.

I would also check the T&C's for a term that states you must make 6 payments to qualify for the servicing... Dealers get a bonus from VWFS for selling the PCP and if people settle too early, I was told they get a reduced amount so it may be that the dealer is only saying that for his own ends as opposed to yours.

The servicing package is administered through VWFS, I had this with an Audi I used to have, and the Audi dealer would invoice VWFS in Milton Keynes, but there was no definitive connection to any PCP finance docs.

Read through all the small print...

However as has been said remortgaging to pay it off may not be the best financial decision to make...