When can I VT my PCP deal

Stevo147

I'm struggling to work out the numbers on my PCP deal that I want to VT here. I've read that its 50% of the total borrowed which includes interest and fee's etc?

My financed amount is 22,254 and with interest Total amount borrowed is 25,474. This would make me believe I've got to pay back 12,737?

My balloon is 13,750 and 36 monthly payments of 325. So 36 x 325 = 11,724 plus the balloon of 13,750 = my total to repay of 25,474

So my question is how will I ever get to 50% of total repayable when my balloon is more than 50%?

Very confused here.

Thanks for any insights you have.

molerat

Clever these car dealers ! With large balloon payments it is often impossible to reach the 50% mark before end of term. The paperwork should give you the figure which will include any deposit paid.

foxy-stoat

Depends how much deposit you paid, if it was less than £1000 then you will be seeing out the full 36 months.

Nearlyold

Its 50% of the TOTAL amount payable not 50% of the amount borrowed - so as foxy stoat alludes to above any deposit already paid counts towards the 50% - of course the deposit is also part of the total amount payable. Car dealers don't structure PCP deals to stop customers VT-ing - when a customer VTs they are usually in the market for another car.

Stevo147

Deposit was 3,500 but they inflated that figure to be 5,300 to include the discount on the car that I negotiated. Guess I'm in this for the long haul until I can sell the car for my outstanding balance.

molerat

Nearlyold wrote: »

Its 50% of the TOTAL amount payable not 50% of the amount borrowed - so as foxy stoat alludes to above any deposit already paid counts towards the 50% - of course the deposit is also part of the total amount payable. Car dealers don't structure PCP deals to stop customers VT-ing - when a customer VTs they are usually in the market for another car.

When getting another car you don't VT you settle the finance, completely different scenario.

Tiddlywinks

Have you approached the finance company to ask for a settlement figure? Will that figure be more or less than the car is now worth?

If you do have 'equity' in the car then go back to your dealer and see if they will buy it from you and they can settle the finance at the same time.

Cornucopia

Stevo147 wrote: »

Deposit was 3,500 but they inflated that figure to be 5,300 to include the discount on the car that I negotiated. Guess I'm in this for the long haul until I can sell the car for my outstanding balance.

You can do whatever you like, subject to the numbers.

There's nothing to stop you selling or trading in the car, as long as the finance is settled before or as part of that deal.

The devil is in the detail - once you have a settlement figure and a valuation of the vehicle you will be in a suitable position to make a decision.

The 50% VT provision predates PCPs, and Finance Companies have no obligation to ensure that any given deal has a 50% VT point that makes sense (financially or otherwise), or indeed, exists at all. Given the large size of your deposit, you may well have access to that option, although it may be close to the end of the PCP term.

The figures in your OP don't look right to me.

I'd say:

Payments: 36 x 325.66 .. £11,724
Deposit:........................... £5,300
MGFV (Balloon):............. £13,750

Total price of car:........... £30,774
50% point...................... £15,387

Will be reached in month: 30

Nearlyold

molerat wrote: »

When getting another car you don't VT you settle the finance, completely different scenario.

Really? Many customers who are upside down on their current car but want to change for whatever reason use VT as a means of getting out of their current car and into a new one, Why, because they don't have to cover the negative equity, it becomes the lenders problem. Just as an aside I've visited hundreds of dealers over the years in my previous employment and never met a business manager who was concerned with structuring a PCP so the customer couldn't VT before the GMFV was due, not because of any altruistic reason but simply because it made no difference to them either way.

motorguy

Stevo147 wrote: »

I'm struggling to work out the numbers on my PCP deal that I want to VT here.






So my question is how will I ever get to 50% of total repayable when my balloon is more than 50%?

For clarification, you can VT any time you like, however the lender can only attempt to recover, in total 50% of the total cost of the transaction including deposit and any payments made so far.


VT'ing (and the capping @ 50%) was never designed to be a quick exit strategy for someone looking to change their car or have got a bit bored with payments, its to protect people who cannot financially afford the payments and who would previously have been hounded by the finance company for disproportionate sums of money.


People now exploit this protection though as a way of short circuiting their way out of a finance agreement.