Moving overseas - best option for terminating car PCP agreement?

topcat9

Hello forum members,
I am just over 1 year into a 4 year agreement on a new Audi (arranged with the Audi dealer through Volkswagen Financial Services). I think it is a PCP deal as there is a lump sum payment at the end of the deal if I want to keep the car, although the contract is headed 'Hire Purchase Agreement'. I've been offered a job overseas starting in 3 months time and can't take the car with me. Do I have any options open to me apart from handing the car back and paying 50% of the total amount payable under the agreement?!

DCFC79

topcat9 said:

Hello forum members,
I am just over 1 year into a 4 year agreement on a new Audi (arranged with the Audi dealer through Volkswagen Financial Services). I think it is a PCP deal as there is a lump sum payment at the end of the deal if I want to keep the car, although the contract is headed 'Hire Purchase Agreement'. I've been offered a job overseas starting in 3 months time and can't take the car with me. Do I have any options open to me apart from handing the car back and paying 50% of the total amount payable under the agreement?!

If handing the car back and paying 50% then thats it.
What does the contract say.

DrEskimo

PCP is just a type of hire purchase agreement with a lump sum as you say. That's why that's at the top. 

Depending on the market value of the car and the amount of finance you have on it, you can just get a straight trade price for any car dealer or garage and ask them to settle the finance. If there is a short fall you have to pay that, or if it's worth more than you owe, then you get that surplus as a cheque. 

If there is a shortfalls you can compare that cost with the cost of reaching VT and see which is lowest. 

Of course what's not going to help you right now is COVID-19. It has had large impact on car trade values. 

missile

What country are you moving to? 

fred246

I shudder to think how much that one year of motoring will end up costing.

macman

I do struggle with the idea that anyone can borrow tens of thousands on finance without even knowing if it's conventional HP or a PCP. Are you in a position to make up the required amount to VT? Normally, you won't be anywhere near to 50% until well into the final year on a 4 year agreement.

PaulW922

You could perhaps approach the dealer to see if they will but it back at a price that would be cheaper than just terminating the agreement? Please remember that with HP, which this is, the 'half payment' option refers to ALL payments due under the agreement, not just 'half of the monthly repayments' or 'half way through' the term. Therefore, any deposit payment that is shown on the HP agreement is part of the money contractually due and counts towards the 50%. That applies IF it is shown in the agreement. That might help a good deal depending on the circumstances 

macman

For the avoidance of all doubt, it's 50% of the total sum borrowed, with interest. As correctly pointed out above, that includes the final balloon payment. The bulk of the capital is repaid in the last year or so, as the interest is lower then.

topcat9

Hi, thanks for the helpful replies. The specific amount to be repaid on early termination is set out in the agreement and you are correct PaulW922/macman that it is 50% of the total sum borrowed plus interest.