PCP - Trying to get out off & Remortgaging

Wereallinthistogether

Stupidly bought a new motorbike on PCP earlier this year - I used to use one to commute but my office has now shut and most journeys I make require a car (for food shopping etc.).

Currently in the process of re-mortgaging and asked our broker about drawing £10k in cash to get rid of my overdraft and to buy a car, however, credit rating is not good enough as I missed a couple of £10 payments on a store card (their website was being a pain and I forgot! ). 

I'm struggling to see what my options are.  My PCP agreement is for another 2.5 years but I understand I can get out early once I pay off half the agreement amount - I just hand the bike back? 

Desperate to get out of this PCP payment and also my £3k overdraft.  Really suprised I can't do anything with the mortgage...?

 

[Deleted User]

It's not surprising about the mortgage, given the current situation. Consolidation is a high risk indicator.

You can VT but that will still mean a lot more payments to go.  You might want to prioritise the OD as that's not a good look and is normally expensive.

You need to be ruthless with your budget and start cutting your costs right down.

DrEskimo

What is the value of the car in trade value relative to the amount still owing on your PCP finance?
You can sell the car and settle the finance whenever you want, but will be liable for any shortfall. 

It makes little sense to pay to VT. You will have to finance the payment, so you might as well just pay the PCP monthlies and keep the bike until you reach the VT point in your agreement. You don't save anything paying it early.

As above though, you can't borrow your way out of debt. Sell the bike for the highest trade price possible, finance the shortfall if needed, then cut costs, stick to a written budget and throw as much surplus income as you possibly can to clear your OD and debts.

macman

With a 3 year PCP, and only 6m in, you are nowhere near the 50% stage: this figure includes the balloon payment. Typically, you won't reach 50% until the last 6m of a PCP.