Applied for PCP but got paperwork for HP

aaz01

We were told we're applying for PCP at a main dealer for a new car.

Instead, we got paperwork for regulated HP (with balloon) finance.

We are planning to hand the car back at the end of the 3 years. The HP paperwork says we will reach the point where we're allowed to terminate the agreement after 33 months - and that's fine.

So.... What's the actual difference?

Should we care that it's HP and not PCP?

wealdroam

aaz01 wrote: »

We were told we're applying for PCP at a main dealer for a new car.

Instead, we got paperwork for regulated HP (with balloon) finance.

We are planning to hand the car back at the end of the 3 years. The HP paperwork says we will reach the point where we're allowed to terminate the agreement after 33 months - and that's fine.

So.... What's the actual difference?

Should we care that it's HP and not PCP?

When did you take delivery of the car?

aaz01

All we've done is sign an order form and applied for PCP finance.

We haven't signed the finance paperwork yet because I'm not sure if HP is right for us.

rs65

aaz01 wrote: »

Instead, we got paperwork for regulated HP (with balloon) finance.

.............

Should we care that it's HP and not PCP?

Sounds like PCP to me.

motorguy

aaz01 wrote: »

We were told we're applying for PCP at a main dealer for a new car.

Instead, we got paperwork for regulated HP (with balloon) finance.

We are planning to hand the car back at the end of the 3 years. The HP paperwork says we will reach the point where we're allowed to terminate the agreement after 33 months - and that's fine.

So.... What's the actual difference?

Should we care that it's HP and not PCP?

PCP is a Hire Purchase agreement with a balloon payment.

aaz01

With HP we need to do a voluntary termination if we want to hand it back at the end of the agreement... But I understand that's noted on our credit rating and can reduce our chance of getting car finance again?

With PCP I understood that we can just "hand the car back" at the end of the agreement, instead of paying the balloon payment... And that's not termination, it's just one of the options.

rs65

aaz01 wrote: »

With HP we need to do a voluntary termination if we want to hand it back at the end of the agreement... But I understand that's noted on our credit rating and can reduce our chance of getting car finance again?

With PCP I understood that we can just "hand the car back" at the end of the agreement, instead of paying the balloon payment... And that's not termination, it's just one of the options.

The 33 month point you mention is probably VT.

A friend of mine has VTd several cars and it has made no difference to future finance.

Remember you can trade it in at any time.

What does the paperwork say about handing it back rather than paying the balloon?

aaz01

The paperwork very clearly says that we MUST pay the full amount (monthly for 36 months, then the balloon payment).

In a separate section, it says that we can terminate the agreement after 50% is paid, which will be in month 33.

If it was PCP... Would there be an option to hand it back, which is different from termination?

rs65

What brand is it? Is the finance entitled anything - such as Ford Options or similar?

aaz01

Audi Finance - "Hire Purchase Agreement regulated by the Consumer Credit Act 1974"

motorguy

aaz01 wrote: »

The paperwork very clearly says that we MUST pay the full amount (monthly for 36 months, then the balloon payment).

In a separate section, it says that we can terminate the agreement after 50% is paid, which will be in month 33.

If it was PCP... Would there be an option to hand it back, which is different from termination?

Theres a handback option at the end - you're missing it somewhere.

Ask your dealer for clarification.