PCP Voluntary Termination & Excess mileage

smitchy73

Hi just looking to kick start my VT of a car under a PCP.

Having just spoken to the VT department and mileage details etc given across they tell me I will have the excess mileage to pay, however, challenging them I advised that under the CCA as per the paperwork, as long as the half way point has been reached and paid then there is nothing more to pay, but they argue that I still have the excess mileage to pay regardless.

I've checked a few threads on here who all seem to agree with what I think, but I've also seen a couple where they say this is not the case.

Can anyone clarify this?

SmellyPetrol

Ive heard the same, apparnetly some companies try and get you to pay the mileage excess, but if the vehicle is in good condition (fair wear and tear etc) then they cant argue it from what I've read.

Found this doc quite handy b4 and posted b4 http://www.alternativeroutefinance.co.uk/pdfs/Leaving_your_lease_car_early.pdf

let me know what happens as have friends who want to VT but worried about it. ta

EDIT: this is a great post about VT - http://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/

joanneb01

I returned my car earlier this month and have just received a 'bill' for damage to the front seat (I videod every inch of the car before it left as I was warned they try and get money out of you - there was no damage whatsover so this has been done after it left my possession). Also I have been charged EXCESS MILEAGE £70.18 @0.0417p per mile. The contract mileage over 3 years was 18000. pro rata after 27 out of 36 months = 13135.14 and I have done 14818 miles. I am absolutely disgusted that they can try and charge me for damage that has been done after I handed the keys over. Re; excess mileage can anyone confirm for certain that it doesn't have to be paid when you voluntary terminate??? Thanks, Joanne

motorguy

If you VT you absolutely and categorically do not have to pay excess mileage charges.

The whole point in a VT is to give you the legal right to return the when you have paid 50% of the total transaction value, with the legal assurance that you have nothing further to pay (subject to fair wear and tear).

The one thing i would say is NEVER sign any document from them before or at the time of the VT without reading it extremely carefully - some companies have been known to put in a return document that you are willing to pay excess mileage charges and then get you to sign it.

bigjl

motorguy wrote: »

If you VT you absolutely and categorically do not have to pay excess mileage charges.

The whole point in a VT is to give you the legal right to return the when you have paid 50% of the total transaction value, with the legal assurance that you have nothing further to pay (subject to fair wear and tear).

The one thing i would say is NEVER sign any document from them before or at the time of the VT without reading it extremely carefully - some companies have been known to put in a return document that you are willing to pay excess mileage charges and then get you to sign it.

Could there be differences in a fixed mileage PCP deal and a VT with normal HP?

motorguy

bigjl wrote: »

Could there be differences in a fixed mileage PCP deal and a VT with normal HP?

No. Doesnt matter.

bigjl

motorguy wrote: »

No. Doesnt matter.

I would have expected the agreed mileage to be worked out on a pro rata basis.

Makes little sense to have a mileage restriction to increase the residual value but if you go over you can just VT without penalty.

motorguy

bigjl wrote: »

I would have expected the agreed mileage to be worked out on a pro rata basis.

Makes little sense to have a mileage restriction to increase the residual value but if you go over you can just VT without penalty.

A voluntary termination is your right under the Consumer Credit Act, when you take out a hire purchase agreement on a car.

You can VT any time you like, however the finance company can only pursue you for a maximum of 50% of the total transaction value (subject to fair wear and tear)

Its a right, under law, designed to protect consumers, and terminates the contract.

Because the contract is terminated, conditions within it cant be enforced.

Finance companies HATE it. The clause within the CCA was designed originally to protect people who no longer could afford the monthly payments, however nowdays PCP finance is almost "sold" with a view to VT'ing.

Hence why finance companies try to claw back whatever money they can - fees, unfair wear and tear, mileage, etc, etc.

Its also why i think we'll see a big move to leasing of new cars - very limited consumer protection.

blackste

Just to expand slightly on what motorguy is saying....

What they are trying to do, in billing you for excess milage, is apply an end of contract clause because you are terminating the contract.
They are free to try it on, and you are free to fight them. It depends on how determined you are to fight them. Im really suprised they are bothering for a few 10s of pounds.

There is however some recent case history going in favour of the finance company winning the claim (posted on legal beagles), but this was for mileage more than double the agreed amount.

tonyh66

blackste wrote: »

Just to expand slightly on what motorguy is saying....

What they are trying to do, in billing you for excess milage, is apply an end of contract clause because you are terminating the contract.
They are free to try it on, and you are free to fight them. It depends on how determined you are to fight them. Im really suprised they are bothering for a few 10s of pounds.

There is however some recent case history going in favour of the finance company winning the claim (posted on legal beagles), but this was for mileage more than double the agreed amount.

so whats the difference, double mileage?, 10% over. You should have to pay the excess mileage otherwise people would just take the mickey and run up excess miles before VT.

facade

tonyh66 wrote: »

so whats the difference, double mileage?, 10% over. You should have to pay the excess mileage otherwise people would just take the mickey and run up excess miles before VT.

My thoughts exactly, excess mileage would be over and above "fair wear & tear" wouldn't it?

It effectively devalues the asset at the end of term: you either pay it or buy the car at the GFV price and take the hit yourself, so it should devalue the car now.