Personal Contract Purchase - Negotiate?

Picard91

Hey everyone, thought id see if anyone had any thoughts or similar experiences?

Brief Overview: I got a car on a Personal Contract Purchase Agreement, 3 Years ago. I have 12 months left at close to 300 GBP a month however, I very rarely now use the car due to a change in work circumstances. I spend 8 months of the year out of the country.

To give the car back seems silly because I would still have to pay the years repayments, it might as well sit there doing nothing on a matter of principle. I am in a position now to pay the early settlement fee and buy the car out right in order to sell. They quoted 11k.

My question is, do you think I could negotiate this down a bit? Does anyone have any experience in something similar for some tips before I try?

Thanks for your time!

TadleyBaggie

I'd say the chances are close to zero, they would have no incentive to negotiate.

neilmcl

Why would they negotiate, the settlement figure is exactly that, the amount that you have left to settle the finance you've agreed, that's non-negotiable. The figure isn't a random figure they've plucked out to give them a profit, it's based on a strict and regulated method to calculate the amount still owed.

DUTR

Picard91 wrote: »

Hey everyone, thought id see if anyone had any thoughts or similar experiences?

Brief Overview: I got a car on a Personal Contract Purchase Agreement, 3 Years ago. I have 12 months left at close to 300 GBP a month however, I very rarely now use the car due to a change in work circumstances. I spend 8 months of the year out of the country.

To give the car back seems silly because I would still have to pay the years repayments, it might as well sit there doing nothing on a matter of principle. I am in a position now to pay the early settlement fee and buy the car out right in order to sell. They quoted 11k.

My question is, do you think I could negotiate this down a bit? Does anyone have any experience in something similar for some tips before I try?

Thanks for your time!

Why would they want to do this? Chances are the balloon price at £11k is much less than the private sale value ?

facade

Picard91 wrote: »

To give the car back seems silly because I would still have to pay the years repayments, it might as well sit there doing nothing on a matter of principle.

To give it back under Voluntary Termination (VT it) you only need to have paid half of the total agreement. If you paid a deposit, you won't be far off this point 36 months into a 48 month PCP, the VT figure is in your financial agreement. Remember, there is still a balloon payment to keep the car, or you throw away another £3600 and hand it back at the end of term.



Otherwise, could you easily sell it for far more than the £11k? if so buy it then sell straight away and get your money back.

Picard91

My reason for thinking they would negotiate is, if I just hand the car back to them then they still have to sell the car. In another years time the Car (I do not think) will be worth the balloon payment. Me purchasing the car takes alot of hassle out of there hands. Or at least to me. Yes they are guaranteed 300GBP a month for the next 12 months anyway, but surely it is in there best interest if they negotiate slightly in order to sell the car today?

The Private Sale Value for the car on Auto Trader is between 10k - 11k.

facade wrote: »

To give it back under Voluntary Termination (VT it) you only need to have paid half of the total agreement. If you paid a deposit, you won't be far off this point 36 months into a 48 month PCP, the VT figure is in your financial agreement. Remember, there is still a balloon payment to keep the car, or you throw away another £3600 and hand it back at the end of term.

Thank you Facade, I had heard of this but when talking to Santander about it they denied any knowledge. Do you know, if say there was another 600GBP before the termination, could I just pay that and hand the car back under VT?

Needless to say, I will never get a PCP ever again.....

Picard91

DUTR wrote: »

Why would they want to do this? Chances are the balloon price at £11k is much less than the private sale value ?

Correct, so why would I pay the Balloon Price and purchase the car off them? I would just hand it back.. I have no obligation to pay the Balloon Price.. surely me slightly trying to negotiate the price would be a better option than me not buying the car....

facade

Picard91 wrote: »

Do you know, if say there was another 600GBP before the termination, could I just pay that and hand the car back under VT?

Yes, if you haven't paid up to the VT figure yet, you make up the difference. If it is small, say upto £1000, you might as well keep the car a few months longer and make it worth less when they sell it, as give them the same cash today.



The total amount payable, and the termination amount must be clearly shown on your original finance agreement.

sheramber

The car will just go auction so no real hassle for the finance company. They have made their profit from the interest paid.

DUTR

Picard91 wrote: »

Correct, so why would I pay the Balloon Price and purchase the car off them? I would just hand it back.. I have no obligation to pay the Balloon Price.. surely me slightly trying to negotiate the price would be a better option than me not buying the car....

Maybe you've misunderstood what I wrote, eg car new sticker price £30k after 3yrs retail private for £13k you get first dibs at £11k.

Car_54

Picard91 wrote: »

To give the car back seems silly because I would still have to pay the years repayments, it might as well sit there doing nothing on a matter of principle.

Out of curiosity, what exactly is the “principle” involved?