Getting Rid of PCP Car

LukeLukeLuke

Hi everybody. 

We got a new car right at the end of February and were in process of sorting finance paperwork to settle PCP early and sell the old car to WBAC. Then the virus hit everything. Now we cannot sell to WBAC as the value has plummeted well below the PCP finance left to pay and WBAC aren't buying.

The details are:
- initial finance = £12K (plus all the insurance rubbish they force) 
- remaining finance = £6.6K
- remaining months = 15 months (July 2017 to July 2021)
- Currently over mileage by a substantial amount but that's fine as we can pay the excess charge. 

Does this seem like a sensible approach from now onwards:
Step 1) request a payment holiday of 3 months to delay the process of paying on the car finance so that either the market value recovers or at least we have it a little longer before the 50% VT in case a family member or friend wants to buy. Interest charge is not excessive.
Step 2) Plan to give it back at 50% VT so that it becomes the finance company's problem, not ours. We would be in the 50% paid position around August 2020 (or November 2020 if we do the payment holiday).
Step 3) pay the excess mileage charge on handing the car back.

Will we need to pay anything other than excess mileage upon 50% VT? Is the 3 months payment holiday likely to mess anything up? The company is PSA finance. 

The car has a few small marks beyond wear and tear, but WBAC only took a small amount of value off because of these. Also, the MOT should be extended 6 months after the due date of July 2020 (I think) so we won't have to pay that. It looks like keeping it an extra 3 months will be cheap (and of some, albeit very little, use to us) and gives a chance of finding a selling option. 

Thanks! 

DrEskimo

Seems the most sensible option.
Do you have the capital to settle the finance and just keep it? Do you need another brand new car?

Also the dealer wouldn't have forced the insurance products. You just politely decline them all and say you are not interested.

Herzlos

The payment holiday will likely extend the finance by longer than the holiday - the interest will still accrue but you won't be making payments. It's unlikely to be a high APR but I'd assume you wouldn't hit the 50% mark until December 2020.

[Deleted User]

Does the finance company lose out when you vt at 50%? They might not earn the interest for the remainder but they will sell the car and get their money back?

LukeLukeLuke

DrEskimo said:

Seems the most sensible option.
Do you have the capital to settle the finance and just keep it? Do you need another brand new car?

Also the dealer wouldn't have forced the insurance products. You just politely decline them all and say you are not interested.

We could use the capital to settle the finance and keep the car if required, but it would not make sense for us as we do not need the car and have been paying (in my opinion) too much for it given the value.

The new car was a long term decision to switch to increasing our safety by a significant amount and also helping the environment and running costs.

Unfortunately, the dealer we went to made it clear that, and I quote, "you must take 2 insurance options with your car". But that's another topic for another day. 

LukeLukeLuke

Herzlos said:

The payment holiday will likely extend the finance by longer than the holiday - the interest will still accrue but you won't be making payments. It's unlikely to be a high APR but I'd assume you wouldn't hit the 50% mark until December 2020.

Very good point, thanks. I think an additional few weeks would be OK for us. 

LukeLukeLuke

ToxicWomble said:

 VT is meant to be there for people struggling financially not those who just want a new shiny toy to play with.
Way to abuse the process - sooner they close the loopholes that allow people to do this the better as we all end up paying for it one way or another

Please take your toxicity elsewhere. You have no idea about our personal situation other than the details provided about finance for the specific vehicle in question. 

Take your unhelpful anger elsewhere. 

LukeLukeLuke

Deleted_User said:

Does the finance company lose out when you vt at 50%? They might not earn the interest for the remainder but they will sell the car and get their money back?

I am not sure to be honest. I am not specifically trying to make things difficult for the finance company, so to speak. I simply want to make sure that we are correct from a legal standpoint with VT. 

As it happens, the GMFV ballon that we would have to pay is now higher than the car is currently worth and it has another 15 months on finance. It makes no sense for us to stick with this agreement from a financial perspective, and selling does not seem to be an option for the foreseeable future. 

mcpitman

Deleted_User said:

Does the finance company lose out when you vt at 50%? They might not earn the interest for the remainder but they will sell the car and get their money back?

Not necessarily, but if they do lose money it's covered by the mass profit both in the cars and the finance/servicing you are hooked up to.

Mercdriver

LukeLukeLuke said:

Deleted_User said:

Does the finance company lose out when you vt at 50%? They might not earn the interest for the remainder but they will sell the car and get their money back?

I am not sure to be honest. I am not specifically trying to make things difficult for the finance company, so to speak. I simply want to make sure that we are correct from a legal standpoint with VT. 

As it happens, the GMFV ballon that we would have to pay is now higher than the car is currently worth and it has another 15 months on finance. It makes no sense for us to stick with this agreement from a financial perspective, and selling does not seem to be an option for the foreseeable future. 

That poster is correct though.  VT is intended to help people who can't afford the payments on one car not to be in a position where they are chased for the whole finance package, whereas you seem to have the financial resources not only to pay for the new car but also to pay off the finance for the old one.  We don't need to know the whole of  your financial situation, you have given us the information needed to make that judgement.  That is not what the VT is all about and at some point this assistance for people in genuine need will be rescinded or tightened up,  leaving people in genuine need up the proverbial creek without a paddle.  

No doubt you were persuaded by the salesman in the sales office to do it this way.  

Also, are you at the VT point in amount paid against the agreement or in number iof payments made?  Unless you paid a huge deposit or paying extremely low or 0% interest, it is unlikely you will be at that point for quite some time.  In most cases, it doesn't come until around month 30 or so of a 36 month agreement.

LukeLukeLuke

Mercdriver said:

LukeLukeLuke said:

Deleted_User said:

Does the finance company lose out when you vt at 50%? They might not earn the interest for the remainder but they will sell the car and get their money back?

I am not sure to be honest. I am not specifically trying to make things difficult for the finance company, so to speak. I simply want to make sure that we are correct from a legal standpoint with VT. 

As it happens, the GMFV ballon that we would have to pay is now higher than the car is currently worth and it has another 15 months on finance. It makes no sense for us to stick with this agreement from a financial perspective, and selling does not seem to be an option for the foreseeable future. 

That poster is correct though.  VT is intended to help people who can't afford the payments on one car not to be in a position where they are chased for the whole finance package, whereas you seem to have the financial resources not only to pay for the new car but also to pay off the finance for the old one.  We don't need to know the whole of  your financial situation, you have given us the information needed to make that judgement.  That is not what the VT is all about and at some point this assistance for people in genuine need will be rescinded or tightened up,  leaving people in genuine need up the proverbial creek without a paddle.  

No doubt you were persuaded by the salesman in the sales office to do it this way.  

Also, are you at the VT point in amount paid against the agreement or in number iof payments made?  Unless you paid a huge deposit or paying extremely low or 0% interest, it is unlikely you will be at that point for quite some time.  In most cases, it doesn't come until around month 30 or so of a 36 month agreement.

Like I said, you cannot make that judgement with the information I have provided. So no, that original 'Toxic' poster is not correct. The period between getting the new car and then being forced into looking to sell the old car was the unfortunate end-of-February timescale where a lot things changed very quickly for a lot of people. I can afford to make payments on two cars because I am sensible with using my available funds where needed and refuse to put myself into a negative debt situation.

Persuaded by the salesman to do what? Who said anything about a salesman for the new car? Again, a judgement without any truth or knowledge of the situation. 

We are closing in on VT for amount paid on the agreement. The car was relatively cheap, the interest was OK, and we traded in our old car as deposit. So I think the deposit bit was quite high which is why we're near the VT 50% finance.

Edit: 50% paid point is around month 36 of 48, so seems to be a reasonable timescale.