PCP - Handing back the car

lexilex

I am wondering if somebody in the know could offer us some advise.

My partner has been offered a new job and as part of this job would receive a company car.

He got a Fiat Punto on a PCP in March 2013. This was to be purchased over 48 months with a balloon payment at the end. At the time of purchase he was told he could bring it back at any time and just hand it over with the keys.

Obviously it was never going to be that easy.

He has rang the finance company and they have told him to do this he would need to pay £1700 to bring it up to 50% of the payments due. We assumed as he is almost half way through his 48 month contract he would have hit the 50% mark but we didn't account for his balloon payment.

Are there any other ways out of this? This is all very new to us and we had always planned to keep the car but obviously the situation has changed.

Thanks in advance!

jaydeeuk1

How much is car worth? If worth more than the finance, then sell it and pay it off at point of exchange.

Does he have to take the co. car?

Tixy

Can he ask the new employer if they will pay a car allowance instead - perhaps at least until he reaches the point that he can VT the car?

lexilex

Unfortunately he can't opt out of the company car, there is no alternative allowance.

He owes £7000 and similar cars seem to be selling for 6.5kish.

I think we are stuck!

thebritishbloke

Do you both have individual cars? If not, you could continue to pay the monthly finance on the PCP until you hit the 50% mark, and you could use that car whilst he uses the new company car or vice versa.

lexilex

Good suggestion but it wouldn't work for us as I have a car that is fully paid for!

Foxy-Stoat_3

lexilex wrote: »

Good suggestion but it wouldn't work for us as I have a car that is fully paid for!

You could sell it and use the Fiat, saves you paying to get out of the PCP.

sinizterguy

lexilex wrote: »

Unfortunately he can't opt out of the company car, there is no alternative allowance.

He owes £7000 and similar cars seem to be selling for 6.5kish.

I think we are stuck!

I you sell the car, and pay back what is left, then the deficit is only £500-ish rather than the £1700 to bring it to 50%.

That's the actual exit figure. If you are willing to do a little footwork to get the car sold.

I doubt you would come out better no matter what else you did.

lexilex

sinizterguy wrote: »

I you sell the car, and pay back what is left, then the deficit is only £500-ish rather than the £1700 to bring it to 50%.

That's the actual exit figure. If you are willing to do a little footwork to get the car sold.

I doubt you would come out better no matter what else you did.

This is what we are thinking, just not sure how keen anyone would be to buy a car with finance outstanding, I know I would stay well away if it was me.

sinizterguy

lexilex wrote: »

This is what we are thinking, just not sure how keen anyone would be to buy a car with finance outstanding, I know I would stay well away if it was me.

You agree with the buyer (or a dealer who may take it in) that the finance will be settled.

In this case, they pay the money to the finance company directly, you pay the remaining to the finance company and both confirm on the phone that the finance is settled.

It can be done, but may put off a few buyers.

So it is well worth contacting the few dealers to ask if they will take the car in - even if it costs you a little more.

leespot

I've purchased a car privately with finance owing. I paid approx £4000 for the car and the seller owed approx £5000. He wasn't too bothered about making a profit as it was part of his divorce settlement !

How it worked for us was, the seller showed me his settlement papers, we called the finance company, I paid £4000 to the company over the phone with my debit card, the guy I bought it from paid the remaining balance over the phone with his card, and the finance company confirmed on the phone (and really quickly by email) to us that it was clear from any finance with immediate effect. We both got reference numbers for our payments. The seller then followed this up with an email to me less than a week later, attaching a copy of the written confirmation of his finance settlement when he got it.

It can be done, like someone above has said, just needs a little legwork.