PCP deal, leaving early via Voluntary Termination

Evesham_Hardcore

I'm on my 4th Ford on PCP, and every time I renew the spec goes down and the price / term goes up.

I'll be specific with figures and hope for advice before I go back to dealer:

-first time was £280/month, high spec and we swapped at 9 months
- This time is £305 a month, lower spec and at 18 months into term we still "owe" £2500. (they say we owe £16000 and the car is worth £14000)

Dealer suggest we hang on, which we could, but that means another year of service, tyres etc which pushes the monthly up even more. So I'm looking to get out of Fords for another plan (other manufacturer, or buy a car outright)

The Voluntary Termination I read about is after you've paid 50%, but of what?

The car was listed as value £21,000 with GMF-value of £10,000.

So, once I've paid back 50% of that difference (what was "owing") I can VT it back to them? That will be in 3 months.

If VT works at 50% of car value (or value-deposit) then that takes us to almost the full term anyway....

Thanks for any help!

Alexd52

It is 50% of the total that you agreed to finance when you signed the deal and includes the balloon payment at the end of the pcp term. For pcp's this does mean that the 50% point is usually reached very close to the end of the term

BoGoF

Not sure why you think the situation you find yourself in is down to Ford - swapping 9 months into a PCP is crazy.

As said above it's 50% of the total amount financed - what does your agreement show as the total amount payable.

foxy-stoat

You can VT at anytime - but you need to pay back 50% of the total deal to buy the car outright (including any neg equity from previous deals) when you do or your credit file will be toast.

So look at your paperwork. Normally the 50% point is near the end of your fixed term, not sure about previous dead money added on.

I suggest when you hand it back buy a cheaper car outright and know where you are.

System

You're swapping early at a time when depreciation of the car is the highest and at a time your monthly payment is mostly interest, not capital so you end up £1000s in the hole. That then gets added on to the next loan so the only way to keep it near what you were paying a month is to end up with a far lower spec.

The reason you're in the situation you are in is entirely down to you.

Evesham_Hardcore

Tarambor wrote: »

The reason you're in the situation you are in is entirely down to you.

ha thanks for that. At the end of each deal previous I was zero balance and have not been rolling it on. I don't think you understood.

I'm not saying anything is Ford's fault, but at this point in all my other PCPs I have been able to swap cars for zero cost.

Maybe that was highly unusual and this is more "normal"

Due to a combination of the finance arrangement and the used car market that's not possible so I'm looking at my options. I'll look through the paperwork tonight (at work and just popped into my head) and see.

As some have said if the 50% applies to the total inc. final payment, it's basically at the end of the term.

However a friend with his BMW returned under VT rules at 2.5 years into a 4 year. He hadn't paid much deposit and got out with a good deal.

cheers all

Penelopa.Pitstop

They must call you their valued customer ;-) You pay a fortune to swap every time.

BoGoF

Evesham_Hardcore wrote: »

ha thanks for that. At the end of each deal previous I was zero balance and have not been rolling it on. I don't think you understood.p

I'm not saying anything is Ford's fault, but at this point in all my other PCPs I have been able to swap cars for zero cost.

Maybe that was highly unusual and this is more "normal"

Due to a combination of the finance arrangement and the used car market that's not possible so I'm looking at my options. I'll look through the paperwork tonight (at work and just popped into my head) and see.

As some have said if the 50% applies to the total inc. final payment, it's basically at the end of the term.

However a friend with his BMW returned under VT rules at 2.5 years into a 4 year. He hadn't paid much deposit and got out with a good deal.

cheers all

How could you have swapped at 9 months with a zero balance from the previous car??

madvicker

Evesham_Hardcore wrote: »

Dealer suggest we hang on, which we could, but that means another year of service, tyres etc which pushes the monthly up even more. So I'm looking to get out of Fords for another plan (other manufacturer, or buy a car outright)

What difference would getting another car make? You'll still have your maintenance, tyres etc to pay.

As for your early exchanges previously, the car you gave back each time would be worth far less than the outstanding balance on the finance agreement you signed. So for the dealer not to make a loss and keep you as a customer, they would have given you a lower specced car that is worth the same in value as - the car you gave back + the new finance deal you signed. Trust me, the one who has lost out by switching earlier each time, is you. Not the dealer.

Unless you are planning to buy a car outright, I wouldn't sign up to a new PCP deal after VT. You'll get yourself into the same position based on past behaviour.

Herzlos

Evesham_Hardcore wrote: »

ha thanks for that. At the end of each deal previous I was zero balance and have not been rolling it on

Does that mean you've been paying the difference between the outstanding balance and the value (quite significant at 9 months old), or that they've let you change cars with zero cost to you (and thus rolling the balance into the next car). The latter would explain why the monthly costs are going up whilst the spec is going down - each time you change car you're adding thousands to the debt due to lack of equity.


Both will be costing you an absolute fortune. So you'd be worth looking at the numbers to see if you're cheaper just sticking with the current car until the PCP ends, or if you're better VT'ing it, paying a few grand in and buying an older car outright.


The "free" VT point on most 4 year PCP's is probably around the 3.5 year mark. The costs tend to be well hidden when wrapped into new PCP deals, or the dealers would send customers running for the hills.

ratrace

wow, mate if this is true (not a troll) you need to stop, your making everyone else (dealer, finance company etc...) rich and stop trying to justify needing a new car because the one you have will need a service and tyres, come on now the costs for those are so trivial in the whole grand scheme of things that they are not even worth talking about