How to end a PCP Finance Agreement

ashind

Hello can anyone help me?

I have a car on a PCP Finance agreement take I took out on Feb 2015.

I have a new job where I no longer need the car, plus the monthly repayments are far to high for me to afford now.

The thing is, my settlement figure is higher than what the car is worth (I bought the car brand new, as you can imagine it has lost nearly £10k in its first year!)

I am so worried as I do not have the difference in the settlement figure and what the car is worth! I would need about £3-4k in cash to settle this, but I dont have it.

What are my other options

foxy-stoat

Either wait or overpay until you have paid 50% of the total agreement then VT the car or get a loan/credit card to help finance the difference.

Not much else you can do unless you want to trash your credit file.

National_Debtline

Hi Ashind,


You can voluntarily terminate the car at any stage of the agreement but foxy-stoat is correct, that 50% of the agreement will be payable. Your liability is 50% of the total agreement, minus what you have paid to date, plus any excessive wear and tear. With PCP you also have to factor in how the balloon payment might affect how much is 50%; and the mileage and future value of the car can be factored into 'wear and tear'.


If you terminate it before you have paid 50% and you can't afford to pay the shortfall in one go then you can negotiate instalments but, again, foxy-stoat is right, these informal arrangement will be on your credit file, very likely with a default and this can cause damage. Plus this could escalate in terms of enforcement and credit file damage in the form of a CCJ.


Alternative could be to declare the car as SORN and just maintain the monthly payments on the PCP until you reach 50% but at least then you don't have the running costs of the car - may help with affordability. Good luck,


Laura
@natdebtline