Voluntary Termination of PCP

kalo88

Hi All,

I've read through quite a few threads here so I really do apologise if this is covering old ground that's been answered.

I'll talk in hypothetical here as I just want to get my head around how exactly it works

You buy a car on PCP for £25,000
You have 36 monthly payments of £350
A guaranteed future value of £12,000

What is the 50% based on?

Option A) The monthly payments equate to £12,600, so is it 50% of that?
Option Or is it the monthly payments total (£12,600) + the GFV (£12,000) making £24,600, so 50% of that?

If it's a case it's option B, how would anyone ever be able to VT a PCP deal, as you would rarely in any circumstances be at 50% of the combined figures (As the whole finance amount is approximately half in itself)?

Again, apologies if this has been answered lots, it just wasn't overly clear to me.

Thank you in advance!

Nearlyold

Its not A but it could be B.

The definition of the VT point is. 50% of the Total Amount Payable.

The Total amount payable is:-

The Purchase price of the item, plus the total interest payable plus any fees (arrangement fees for example). Thus any deposit paid (cash or part exchange) counts towards the 50% payable.

MataNui

You are forgetting that you would of paid a deposit. The 50% relates to the total financed. So the total of the monthly payments + the balloon + the interest. So closest in your list would be option B.

And Yes. The VT point of a PCP deal is typically only met in the last couple of months of the payment term.

kalo88

Cool that clears it up.

Thanks y'all !

Nearlyold

MataNui wrote: »

You are forgetting that you would of paid a deposit. The 50% relates to the total financed. So the total of the monthly payments + the balloon + the interest. So closest in your list would be option B.

And Yes. The VT point of a PCP deal is typically only met in the last couple of months of the payment term.

Matanui - the parts in bold are correct but the part in Italics is a bit muddled up. The 50% relates to the total amount payable (not total financed) and you wouldn't add the interest to the monthly payments because the monthly payments already include the interest (as does the balloon in a way). The total amount payable is as I posted "The Purchase price of the item, plus the total interest payable plus any fees (arrangement fees for example)."