VT Advice Needed

Worty

Hi, I have a PCP with Mercedes and the car is in a lot of negative equity. I am way past the VT rule so on Wednesday 15th August 2018 I issued them a VT standard letter template saying I was invoking my rights; I did this by email (which I believe is fine) to their customer services email and got an auto-reply saying my email being channelled to right department etc.

I gave them 14 days notice but have heard nothing back from them; I was wondering if I need to be doing anything more, I was going to email them and say if they do not respond then I will deliver the car back to the local dealership on the 15th day, please can anyone advise if I need to be doing more as I'm concerned I've not heard from them or if I can do this. I’ve read on previous posts that MB are particularly unhelpful with VT’s.

Thanks in advance.

DrEskimo

What are the details of the PCP (price, monthlies, duration, GFV, APR, etc.)?

It's very odd to be in 'lots' of negative equity, but be 'way' past the VT point?

Who says it is in loads of negative equity? Where was it valued, and how does it compare to other trade in offers and how far are they from general private sale valuations?

LandyAndy

I believe Mercedes are very hot on identifying wear that is deemed beyond the norm and charging the customer accordingly.

Worty

Thanks, i'm just over 3yrs into a 4yr deal and MB have advised on the figures to being circa £6k!(supported by autotrader search) and have paid more than the 50% rule. I actually complained to them last year about the negative equity and how this could have occurred but they never understood the complaint and just said i'd signed the sales documents (I never said it was mis-selling - just how could their projection figures be so wrong to put me in negative equity)


My concern is I have not heard back from them since putting them on notice of returning the car as per s99 of the CCA as i'm now desperate to get rid of the car.

LandyAndy

Worty wrote: »

Thanks, i'm just over 3yrs into a 4yr deal and MB have advised on the figures to being circa £6k!(supported by autotrader search) and have paid more than the 50% rule. I actually complained to them last year about the negative equity and how this could have occurred but they never understood the complaint and just said i'd signed the sales documents (I never said it was mis-selling - just how could their projection figures be so wrong to put me in negative equity)


My concern is I have not heard back from them since putting them on notice of returning the car as per s99 of the CCA as i'm now desperate to get rid of the car.

Because there are two fixed points in the deal, the new price and the GFV at 48 months. The GFV is usually a reasonable estimate of market value at that point. But, the value line between them is not a straight line. New cars on PCP's fall immediately into negative equity as they are driven away and that only catches up with itself as true value and GFV come together at the end of the PCP.

DrEskimo

So what are the terms of the PCP?

It’s unlikely you will be at the VT point just after 3yrs on a 4yr PCP. You may have understood correctly, but just for clarification it’s not when you are half way through a term (I.e. 2yrs on a 4yr deal), but when you have paid 50% of the total amount payable. This figure will be on your finance documents, but roughly it’s the total of deposit+all 47monthly payments+GFV (+any optional purchase fees).

It’s once you have paid 50% of that figure that you can VT.

DrEskimo

LandyAndy wrote: »

Because there are two fixed points in the deal, the new price and the GFV at 48 months. The GFV is usually a reasonable estimate of market value at that point. But, the value line between them is not a straight line. New cars on PCP's fall immediately into negative equity as they are driven away and that only catches up with itself as true value and GFV come together at the end of the PCP.

Illustrated beautifully in this graph:



If the GFV is set accurately, you will always be in negative equity until the very end. You are agreeing to only pay the depreciation (+interest), and spreading that cost over the term.

LandyAndy

I'm also surprised that someone 75% of the way through a PCP deal is 'well past' the VT threshold.

I have VT'd a car and I had just passed that threshold after 2years and 8 months of a three year deal, ie 89% of the way through the deal on a time basis.

LandyAndy

DrEskimo wrote: »

Illustrated beautifully in this graph:



If the GFV is set accurately, you will always be in negative equity until the very end. You are agreeing to only pay the depreciation (+interest), and spreading that cost over the term.

THANK YOU!

That was exactly the image I had in my head when I was replying

Worty

Thanks all, the figures are confirmed and I am past the 50% payment threshold (even MB confirmed this as they were the ones who originally suggested it as an option upon my compliant). I'm actually 80% of the way through the term having just checked. I am definitely able to VT.

My question is do I need to do anything more other than the email I sent to MB customer services as this is the part that is worrying me.

neilmcl

Worty wrote: »

Thanks all, the figures are confirmed and I am past the 50% payment threshold (even MB confirmed this as they were the ones who originally suggested it as an option upon my compliant). I'm actually 80% of the way through the term having just checked. I am definitely able to VT.

My question is do I need to do anything more other than the email I sent to MB customer services as this is the part that is worrying me.

Ever thought of actually picking up the phone and speaking to Mercedes Finance?