Car Lease

S00088

How long is the pcp? If its a hire purchase agreement then your daughter may be able to voluntarily terminate the agreement- but she would have to pay half the finance off for the vehicle. She could also voluntarily surrender the vehicle - this is where the finance company sells the car at auction and your daughter would pay the difference. May be worth asking the finance company about these - but make sure you ask about any implications for your daughters credit file.

Bonfire_Bride

With a PCP, the monthly payments are a fair bit lower when compared to normal HP (hire purchase) - hence the large balloon payment at the end. This is why the settlement figure is so high.

jonesMUFCforever

Bonfire_Bride wrote: »

With a PCP, the monthly payments are a fair bit lower when compared to normal HP (hire purchase) - hence the large balloon payment at the end. This is why the settlement figure is so high.

They are also priced so that during the repayment period (before the balloon payment) you never pay more than 50% of the car so you CANNOT hand the car back.

Cornucopia

jonesMUFCforever wrote: »

They are also priced so that during the repayment period (before the balloon payment) you never pay more than 50% of the car so you CANNOT hand the car back.

If you mean that the Balloon payment is never less than 50% of the total amount of credit, then I don't think that can be right.

A typical new car will depreciate something like 65% over the first three years, and you'd expect the PCP figures to reflect that.

Nearlyold

jonesMUFCforever wrote: »

They are also priced so that during the repayment period (before the balloon payment) you never pay more than 50% of the car so you CANNOT hand the car back.

It wouldn't mean you CANNOT hand the car back, you could just make an additional payment to make it up to 50% (though you'd have to be pretty keen to hand the car back to want to do that!)

jonesMUFCforever

Nearlyold wrote: »

It wouldn't mean you CANNOT hand the car back, you could just make an additional payment to make it up to 50% (though you'd have to be pretty keen to hand the car back to want to do that!)

I disagree.
My last agreement with Ford finance said I could overpay any amount at any time BUT if you wanted to pay back the balloon payment part it was all or nothing.
In other words you cannot hand the car back and walk away.

I would agree with you if it was a standard HP loan where you make x amount of payments for y amount of months with no balloon.