Advice on my PCP and negative equity

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motorguy wrote: »

By my calculations and based on total amount payable = deposit + monthly payments + residual + fees...

Deposit = £1500 + £500

Monthly payments = £261.59 + (47*£162.59) = £7,903.32

Residual + Fees = £5,318.50

Total amount payable = £15,221.82

50% marker is £7,610.91

£2,000 paid up front (£1,500+£500), so you need to make £7,610.91 - £2,000 = £5610.91 of monthly payments before you can VT with nothing further to pay.

£5610.91 / £162.59 = 34.51, therefore you will have exceeded the 50% marker after the 35th monthly payment.

I thought the total amount payable under the hire agreement was the amount borrowed plus fees: the deposit isn't borrowed, nor does it repay any of the loan (you used the deposit to reduce the loan in the first place), so it should be half of £13,221.82 = £6610.91 to repay divided by £162.59 = 40.6, making 41 months out of the 48, which seems better for the finance co.

I'm happy to be wrong, the OP should have the total amount payable figure on the agreement

neilmcl

facade wrote: »

I thought the total amount payable under the hire agreement was the amount borrowed plus fees: the deposit isn't borrowed, nor does it repay any of the loan (you used the deposit to reduce the loan in the first place), so it should be half of £13,221.82 = £6610.91 to repay divided by £162.59 = 40.6, making 41 months out of the 48, which seems better for the finance co.

I'm happy to be wrong, the OP should have the total amount payable figure on the agreement

Motorguy is correct. The total amount payable includes deposit (or advance payment as it's sometime referred to), total monthly payments, balloon and any fee. 50% of that gives you your VT figure then you deduct your deposit from that.

motorguy

facade wrote: »

I thought the total amount payable under the hire agreement was the amount borrowed plus fees: the deposit isn't borrowed, nor does it repay any of the loan (you used the deposit to reduce the loan in the first place), so it should be half of £13,221.82 = £6610.91 to repay divided by £162.59 = 40.6, making 41 months out of the 48, which seems better for the finance co.

I'm happy to be wrong, the OP should have the total amount payable figure on the agreement

No, as per Neils response already its absolutely without doubt the total amount payable including deposit, interest, fees and any residual value.

Also, dont forget this is law to protect the consumer, NOT help the finance company.

Its designed that you can VT your car at ANY point, but the finance company can only pursue you for payment of no more than 50% of the transaction cost (subject to fair wear and tear) - this was to stop finance companies making up fees to charge extra if a car was returned or to pursue the customer for disproportionate amounts of money.

If it worked the way you say then if i put a £10,000 deposit in a £20,000 car deal, and had to VT it, the finance company could pursue me for a further £5,000+

People interpret it as "you can hand the car back when you've paid 50%" but its more far reaching than just that.

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motorguy wrote: »

If it worked the way you say then if i put a £10,000 deposit in a £20,000 car deal, and had to VT it, the finance company could pursue me for a further £5,000+

Happy to be corrected, so it is in the best interest of the finance co. to keep that deposit as small as possible then

motorguy

facade wrote: »

Happy to be corrected, so it is in the best interest of the finance co. to keep that deposit as small as possible then

I dont see it makes much difference to them. Only a relatively small amount of cars are VT'd anyway, and if theres a large deposit and its VTd at the first possible opportunity, then they're getting a younger car back.

I would say they factor in a percentage of VTs per month in to their costs per year.

Also, the finance company will have little influence on what the customer and salesman agree.