PCP advice, termination, handing car back.

Thomas_C_2

Hello,

I have a Volvo V40. I got it from new (never again). I have done about 19000 miles in it.

Come September time I will be half way through my agreement. Agreement is 4 years and then the option to hand back, get another car or pay balloon payment. Balloon payment is about £9000 at the end of the 4 years.

I pay just over £284 a month currently.

My circumstances have changed and I'm going travelling for a year or maybe two in October.

My settlement is £15301.44.

I have just spoken to the finance company and most of what he said went through one ear and out the other. Hard to understand.

He said that I can't just hand the car back half way through my agreement. I thought you can?

He said I would need to sell the vehicle privately or something about, if I don't get the full amount then they can charge me 1p every month until the balloon comes up, but then I'd have to pay the balloon anyway??? Very odd and made no sense.

I have rang Volvo and am waiting a call from them to see if they can help as I got the car from them originally.

Anyone been through this before or know more?

Moral of the story, never get a car from new. I've paid out so much and have just basically rented the car. The amount I've spent I could have got a nice second hand one.

Anyway, yeah. thanks.

Forgot to add: They said I can't do voluntary termination, but can do voluntary surrender. They send it to auction and try to cover the settlement figure. Any difference I would pay if they don't get the settlement figure.

neilmcl

You misunderstand. You can't VT the agreement half way through it!

You can VT a PCP agreement when you've paid off 50% of the total finance amount payable. Check your agreement as this amount will be clearly shown.

neilmcl

Thomas_C wrote: »

Moral of the story, never get a car from new. I've paid out so much and have just basically rented the car. The amount I've spent I could have got a nice second hand one.

Moral of the story, always understand what you're getting into. PCP/HP finance isn't for everyone but can work quite well and suit the circumstances for a large number of new car drivers.

Thomas_C_2

neilmcl wrote: »

Moral of the story, always understand what you're getting into. PCP/HP finance isn't for everyone but can work quite well and suit the circumstances for a large number of new car drivers.

I did know what I was getting into at the time, but my circumstances have changed.

When I first got the car I didn't expect to want to go travelling two years later.

I have read the agreement and there is hardly anything about terminating, giving the car back and costs incured by doing so.

neilmcl

Thomas_C wrote: »

I did know what I was getting into at the time, but my circumstances have changed.

When I first got the car I didn't expect to want to go travelling two years later.

I have read the agreement and there is hardly anything about terminating, giving the car back and costs incured by doing so.

Your agreement will show the total amount payable. You will need to have paid 50% of that.

Cornucopia

Thomas_C wrote: »

My settlement is £15301.44.

Do you know how much the car is worth?

He said that I can't just hand the car back half way through my agreement. I thought you can?

It's half-way through, financially, not chronologically.

He said I would need to sell the vehicle privately or something about, if I don't get the full amount then they can charge me 1p every month until the balloon comes up, but then I'd have to pay the balloon anyway??? Very odd and made no sense.

It sounds like they are being quite fair with you, they aren't under much of an obligation to help you at all.

They are saying that either:-

- You can sell the car and pay them back now.

- You can sell the car and pay some back now and the rest later (at the balloon payment point).

- They can sell the car for you at auction and you will be liable for any shortfall.

The starting point on deciding what to do is finding out what the car is worth compared to the settlement figure.

Thomas_C_2

neilmcl wrote: »

Your agreement will show the total amount payable. You will need to have paid 50% of that.

It's £24,214.

I've only paid £6,816.

I got it wrong and thought it was half way through the agreement not half way through the amount payable.

So about £5,000 to pay.

My best bet will be to see how much Volvo would offer me for the car and take it from there or keep the car. Only problem with keeping the car is that it will be sat on my driveway not being used as I'm going to Australia, but I'll still be pay £284 a month.

Thomas_C_2

Cornucopia wrote: »

Do you know how much the car is worth?

It's half-way through, financially, not chronologically.

It sounds like they are being quite fair with you, they aren't under much of an obligation to help you at all.

They are saying that either:-

- You can sell the car and pay them back now.

- You can sell the car and pay some back now and the rest later (at the balloon payment point).

- They can sell the car for you at auction and you will be liable for any shortfall.

The starting point on deciding what to do is finding out what the car is worth compared to the settlement figure.

It's not them, it's me. I just found it hard to understand and take in what they were saying.

I took it that I would still have to pay the balloon payment (which is £9,000) at the end of the agreement even if I did sell the car and couldn't get the whole sum or did he mean that I could just pay the difference of the settlement?So for example, I get £14,000 for it and pay the remaining £1301 at the end of the agreement? And pay 1p a month to keep it open.

In regards to the auction thing, how likely is that to work in my favour? Could that end up costing me loads. They might only get £11,000 for it? They could royally rip me off or even make up what they got for it just to rob me?

thanks.

Thomas_C_2

In regards to how much my car is worth.

Using autotrader,

Private sale: £13,345.

Part exchange £12,537

So about £2000 difference from settlement.

BeenThroughItAll

You can't sell the car and only pay half. If you sell the car, you'll need to stump up the entire settlement figure.


If you want to VT, you'll need to pay the difference between the total you have currently paid, and 50% of the total cost of the agreement INCLUDING the balloon payment.


ETA: it appears you're on the right track, I thought you'd misunderstood the idea of selling the car!

Cornucopia

Thomas_C wrote: »

It's not them, it's me. I just found it hard to understand and take in what they were saying.

I took it that I would still have to pay the balloon payment (which is £9,000) at the end of the agreement even if I did sell the car and couldn't get the whole sum or did he mean that I could just pay the difference of the settlement?So for example, I get £14,000 for it and pay the remaining £1301 at the end of the agreement? And pay 1p a month to keep it open.

If you sell the car rather than returning it to them as per the contract, then yes, you will be liable for the entire outstanding amount, including the balloon payment.

Per your example, if you got £14k for it, and paid them that amount now, they would be prepared to let the agreement run on at 1p per month and settle the remainder at the end of the term.

The advantage to you would be that you'd have 2 years to find the difference. The advantage to them is that (presumably) the agreement would continue to accrue interest over the 2 years.

In regards to the auction thing, how likely is that to work in my favour?

Unlikely, I would say.

Could that end up costing me loads. They might only get £11,000 for it? They could royally rip me off or even make up what they got for it just to rob me?

They may get a low price, but I don't honestly see them ripping you off. If that concerns you then you need to sell it yourself.