PCP Voluntary Termination Hell - please help!

RedSkyAtNight

Hi there,

My husband was recently made aware that his Santander PCP agreement for car lease was reaching the end of it's contract. Unfortunately he has lost a lot of his paperwork and our understanding of the situation is muggy to say the least.
He doesn't seem to have the option of just returning the car - instead he is being told he has a large amount outstanding on the car even though he has paid the monthly agreed payments every month without fail. He has requested a voluntary termination, however I'm not sure if he is even still in the contract now (it's taken so long to try and get our heads round it).... That said, they have accepted the VT request but have demanded a 'VT Liability' of £3980.16.
I have a couple of questions and would be SO grateful if anyone could help as we feel totally clueless and feeling very stressed by the large amount apparently outstanding:
1. Why did he not have the option of returning the car at the end of his contract without a massive outstanding payment?? (subject to possible milage fees).

2. Why is the outstanding VT liability charge so massive when he has already reached the end of his contract - I was under the impression that you could VT as long as paid 50% + on the total amount payable which surely he has paid by now? It wasn't a particularly expensive car (approx £9000 at start).

3. Is it possible that they are giving us a false impression here in the hope that we will just pay up and not exercise our Consumer's rights? I read somewhere that customer is responsible for calculating how much the 50% is.

We are feeling very naive and confused! Would be grateful for any advice. He is going to contact Santander tomorrow to request copy of T&C's and contract etc.

Thank you very much
J

Arklight

No one can advise you on this because we have no way of knowing what contract you are bound by.

A PCP agreement and a lease agreement are very different, but you've mentioned both.

You need to contact Santander and ask for copies of the agreement and confirm what you are actually signed up to.

The 50% VT is after 50% net repayment of the entire amount, not just the minimum term. But that's all I can speculate to with the information given.

wgl2014

I would suggest that the OP has neither a PCP or lease agreement.

https://www.santanderconsumer.co.uk/finance-that-fits/car-finance/personal-customers/

Conditional sale with final balloon payment maybe?

As above, need to get a copy of the agreement.

neilmcl

OP, have you an account online, if not register and you'll be able to see the details of your finance agreement.

We can't really comment until you tell us exactly what type of agreement you're on.

RedSkyAtNight

It's a PCP agreement.
They are pressing us for a liability payment which is the balloon payment plus mileage charges.
He has given the car back but we are still receiving message stating that he have a huge amount outstanding.
To me, that doesn't fit the profile of a PCP agreement or a VT.
I'll try and post a copy of the letter with the wording on.
Feeling very helpless and bleak about it all

RedSkyAtNight

'on 15th September 2018, your final balloon payment of £3945.16 was due. As you had recorded your intention to part exchange the vehicle, we did not apply to take this payment from your account.
On 21st September, you telephoned us to discuss your options regarding the end of your PCP agreement. You informed us that the dealership were not going through with the part exchange, and the advisor confirmed you still had the option to hand the vehicle back.
On 22nd October, you telephoned our arrears management department following receipt of correspondence and you were advised that you were in arrears by £3945.21. he explained that if you VT the agreement, you would be liable for the outstanding arrears.

As you were overdue a payment of £3945.16, this became your outstanding liability. This is stated in your 'Conditional Sale agreement Regulated by the Consumer Credit Act 1974' under the section 'Termination: Your rights'.

On a PCP agreement, you are given the option to hand back the vehicle without being charged this balloon payment. However on your agreement you have signed to confirm you acknowledge and accept our rate of £14.9p per mile we charge if you exceed your yearly mileage. From Manheim's report we can see that you have massively exceeded this allowance, which we have calculated would have provided you with a liability of roughly £6450 had you handed the vehicle back at the end of agreement as a PCP handback'.
After a full review, I am unable to uphold your complaint. The reason for this is that the VT liability is a valid payment you remain liable for, as is the £70 collection fee as both of these are stated in your contract.'

onomatopoeia99

RedSkyAtNight wrote: »

'on 15th September 2018, your final balloon payment of £3945.16 was due. As you had recorded your intention to part exchange the vehicle, we did not apply to take this payment from your account.
On 21st September, you telephoned us to discuss your options regarding the end of your PCP agreement. You informed us that the dealership were not going through with the part exchange, and the advisor confirmed you still had the option to hand the vehicle back.
On 22nd October, you telephoned our arrears management department following receipt of correspondence and you were advised that you were in arrears by £3945.21. he explained that if you VT the agreement, you would be liable for the outstanding arrears.

As you were overdue a payment of £3945.16, this became your outstanding liability. This is stated in your 'Conditional Sale agreement Regulated by the Consumer Credit Act 1974' under the section 'Termination: Your rights'.

On a PCP agreement, you are given the option to hand back the vehicle without being charged this balloon payment. However on your agreement you have signed to confirm you acknowledge and accept our rate of £14.9p per mile we charge if you exceed your yearly mileage. From Manheim's report we can see that you have massively exceeded this allowance, which we have calculated would have provided you with a liability of roughly £6450 had you handed the vehicle back at the end of agreement as a PCP handback'.
After a full review, I am unable to uphold your complaint. The reason for this is that the VT liability is a valid payment you remain liable for, as is the £70 collection fee as both of these are stated in your contract.'

So if you'd handed the car back at the end of the agreement you'd have had to pay £6450 in excess mileage, which by my sums is about 43,000 miles over the limit you agreed?


You could pay the balloon and keep the car, there will be no excess miles to pay then.

RedSkyAtNight

They were already demanding balloon payment of £3945.16 before they'd even inspected the car. Insisting he still had to pay it even though he was going to return the car and they knew this.
The £6450 is the balloon payment Plus charges. If he pays that sum, then he should have the car in his possession...but they have the car so why does he still need to pay balloon payment (I understand the charges)?

neilmcl

RedSkyAtNight wrote: »

It's a PCP agreement.
They are pressing us for a liability payment which is the balloon payment plus mileage charges.
He has given the car back but we are still receiving message stating that he have a huge amount outstanding.
To me, that doesn't fit the profile of a PCP agreement or a VT.
I'll try and post a copy of the letter with the wording on.
Feeling very helpless and bleak about it all

You sure about that. Your email from them clearly states it's a conditional sale agreement so I'd suggest it's their Conditional Sale with Balloon agreement as was posted earlier. You've come to the end of the agreement, so you liability is to pay this balloon. You can't get out of it by stating you now want the VT it, it's too late for that.

Mercdriver

You wouldn't be paying the balloon payment plus charges as the balloon payment makes the car yours to keep and you would not be liable for any excess mileage.

How many years were in the agreement, and how many did you do during the agreement?

neilmcl

RedSkyAtNight wrote: »

They were already demanding balloon payment of £3945.16 before they'd even inspected the car. Insisting he still had to pay it even though he was going to return the car and they knew this.
The £6450 is the balloon payment Plus charges. If he pays that sum, then he should have the car in his possession...but they have the car so why does he still need to pay balloon payment (I understand the charges)?

Because it's not a PCP but a conditional sale with balloon. Once he pays his full liability (balloon) he can have the car back.