Withdrawing from a PCP early

otalbot

Hi,

So 18 months ago I took out a PCP for an Audi A1 for a 3 year contract.
I pay a set amount £200~ each month and at the end of the contract I was told I had 3 options...
- Give the car back
- Trade in for a new/different car
- Pay a balloon payment of £9k~ to own the rest of the car.

I was always looking at the first two options, as I had no interest in buying it at the end.

However, I have come into a situation where I may be accepting a new job in which I do not need a car (I will be living in central London). I can technically afford the repayments as well as an increased rent for moving; however I would rather not pay for a car that I won't be using.

The legal advice online isn't that clear, so I'm not sure what my options are in terms of withdrawing from the PCP early?

Any help would be great.

Thanks

tykesi

What does your contract say. No amount of ‘legal advice online’ can help if they can’t read what you agreed to when you signed the contract.

neilmcl

You have the option to Voluntary Terminate (VT) the agreement but you must have paid of 50% of the total amount payable as listed in your agreement.

At 18 months it's doubtful you'd be in that position.

More information can be found here:

https://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp

http://legalbeagles.info/forums/showthread.php?77612-A-guide-to-voluntary-termination-Your-rights

otalbot

The finance contract isn't that clearly, it says I have the right to withdraw within 14 days of singing the agreement...

Which obviously is past.

Nowhere does it mention 50% of the total cost. Going through carexpect, it says...

"you do have the opportunity to terminate your finance agreement and walk away after paying back half of what you owe." - Does this include the security of the car, or just the amount in which I'm borrowing before the balloon payment?

With interest my total amount to pay £8,230, as i'm half way through, I've paid £4,115.

So if I wish to withdraw, i'll have to pay £2k upfront + give the car back?

Obviously this is all dependant on the value of the car I expect?

A lot of the audi finance says to contact a dealer for more information, is there any harm in doing this; or will they go to the finance company and then i'll receive a lot of scary letters in the post?

debtdebt

Audi dealership won't be interested as you aren't buying another car from them. You will need to contact the finance company direct.

You need to add the circa £9k balloon payments to your calculations as well. You need to have reached 50% of that total figure before you can VT. This will probably take you towards the very end of the contract unless you make a bi lump sum payment now.

motorguy

otalbot wrote: »

The finance contract isn't that clearly, it says I have the right to withdraw within 14 days of singing the agreement...

Which obviously is past.

Nowhere does it mention 50% of the total cost. Going through carexpect, it says...

"you do have the opportunity to terminate your finance agreement and walk away after paying back half of what you owe." - Does this include the security of the car, or just the amount in which I'm borrowing before the balloon payment?

With interest my total amount to pay £8,230, as i'm half way through, I've paid £4,115.

So if I wish to withdraw, i'll have to pay £2k upfront + give the car back?

Obviously this is all dependant on the value of the car I expect?

A lot of the audi finance says to contact a dealer for more information, is there any harm in doing this; or will they go to the finance company and then i'll receive a lot of scary letters in the post?

It will be half of the total transaction cost, including any deposit, fees, monthly payments, interest and residuals value set.

You dont have to keep the car until that point, you can hand it back now and have them bill you for the difference between what you've paid and the 50% marker.

motorguy

otalbot wrote: »

A lot of the audi finance says to contact a dealer for more information, is there any harm in doing this; or will they go to the finance company and then i'll receive a lot of scary letters in the post?

The only advantage in contacting the dealer would be to see if they might wish to buy the car off you.

That might work out cheaper.

Also, check WBAC for a value and any of the online buying companies.

OR any large indie who may retail your car on their forecourt.

System

otalbot wrote: »

"you do have the opportunity to terminate your finance agreement and walk away after paying back half of what you owe." - Does this include the security of the car, or just the amount in which I'm borrowing before the balloon payment?

It is 50% of what the total price of the car was when you signed the agreement so that includes the deposit, the amount you're financing and the balloon payment.

With interest my total amount to pay £8,230, as i'm half way through, I've paid £4,115.

Unless the Audi was sub £10,000 windscreen price or you paid a five figure deposit you're nowhere near halfway. You've not included the balloon payment in that £8230 have you?

neilmcl

otalbot wrote: »

The finance contract isn't that clearly, it says I have the right to withdraw within 14 days of singing the agreement...

Which obviously is past.

Nowhere does it mention 50% of the total cost. Going through carexpect, it says...

"you do have the opportunity to terminate your finance agreement and walk away after paying back half of what you owe." - Does this include the security of the car, or just the amount in which I'm borrowing before the balloon payment?

With interest my total amount to pay £8,230, as i'm half way through, I've paid £4,115.

So if I wish to withdraw, i'll have to pay £2k upfront + give the car back?

Obviously this is all dependant on the value of the car I expect?

A lot of the audi finance says to contact a dealer for more information, is there any harm in doing this; or will they go to the finance company and then i'll receive a lot of scary letters in the post?

I suggest you go through your agreement again and read it fully. There will be something in there about termination and it should also clearly show the Total Amount Payable, of which you need to pay 50%.