Do I have a PCP or personal loan?

Gilesy_W

Now this is probably a stupid post, but here goes anyway.

I have bought a car with finance provided by Santander. I've always thought it was a PCP (indeed the HPI check on the car confirms this); I'm paying a monthly amount, there's a balloon payment at the end and there's an agreed mileage and future value.

I'm getting a new car, so need to move this one on. I assumed I'd have to settle the PCP to be able to do this but Santander have said the finance is a personal loan and they can remove any tie between the car and the finance so it doesn't show up in HPI type checks.

I'm delighted at this as it gives me lots more options and makes life easier, but really?!

Looking at the paperwork, the product is actually a fixed sum loan agreement (regulated by the consumer credit act 1974). So it's a personal loan...with a balloon payment...and fixed mileage allowance?

Not fussed in the slightest - just curious!

ricardinho88

From what I can gather, it's a mixture of both.

You have the Guaranteed Final Payment at the end and you can trade the car in at the end of the agreement, much like a PCP. But yet it looks like you own the car from the beggining, much like a personal loan.

I work in the industry and to be honest this is a new one for me. Did you obtain the agreement by approaching them direct? Or did you get the finance from a dealership?

Nearlyold

If it says fixed sum loan agreement and Santander have told you that it's a personal loan then that should be what it is.

Rather than the "hand back" rights at the end of the agreement that you get with HP based PCP there should be a clause in the documentation that Santander will buy the vehicle from you at the end of the agreement for a fixed price equivalent to the balloon payment due subject to condition and mileage.

As you say nothing to be fussed about, the only difference it could have made would be you had no right to Voluntary Termination.

I have seen these agreements during my time in the industry but only infrequently

Gilesy_W

Thanks both,

I got the finance through the dealer and just went with it. The strange thing is the car is currently showing as having finance secured on it but Santander have said they'll remove that tie within 7 days leaving me to do what I want.

Doesn't make sense to me either but they were completely unambiguous about it.

Details found here - I've got a Fixed Sum Loan with Guaranteed Future Value product.

foxy-stoat

Dig out the paperwork you signed and look on there, just to be sure.

Nearlyold

foxy-stoat wrote: »

Dig out the paperwork you signed and look on there, just to be sure.

Think the OP says in his first post that he's looked at the paperwork.
Looks like you don't actually apply for this product but you end up with it if for whatever reason Santander don't want to offer you a "normal" PCP.

This text explains
"Your dealer will advise you if we can offer you this product, as it isn’t available by choice. The decision will be based on the car, the amount of deposit, your credit score and the Guaranteed Final Payment"

Gilesy_W

Yep - seems a bit daft them offering me something which I didn't ask for which seemingly weakens their security, but ho hum!