PCP car finance

Bubblebutt9

I have a Mercedes on PCP, I am 24 months into a 48 month contract. It costs £370 per month and now that we are in lockdown it sits in my drive 95% of the time. Does anyone know if it’s possible to terminate my contract early without penalty? Thanks 

Edi81

in the in your copy of the finance agreement it will refer to voluntary termination of PCP. 

Under this you can return with no penalty once you have paid 50% of the total amount payable. If it’s a PCP this will likely be at nearer the 48 month point than now. 

DrEskimo

Alternatively you get a settlement figure for the remaining finance owed on the vehicle, then get a quote from WBAC and ring around a few garages for a trade in price given the cars mileage and condition.

If the trade in price is similar or more than your settlement figures, just trade it in to whoever pays you the most and then they will settle the finance and you are done.

Bubblebutt9

That’s both. 

I couldn’t find anything in my agreement about VT so I will give the finance company a call tomorrow 

Nearlyold

There is no regulatory definition of a PCP.  The underlying regulatory defined agreement a particular PCP is based on dictates whether or not there are VT rights. 
A Hire Purchase or Conditional Sale based PCP agreement will have VT rights.
A Fixed Sum/Term Loan  based PCP agreement will not have VT rights.

molerat

It will state in big letters along the top of the agreement what type of finance it is based on - fixed term loan, hire purchase agreement etc.

macman

As pointed out in post 2, you are probably at least 12 to 18m away from making 50% payment: though it does depend on the deposit, total borrowed and the final balloon payment. Post the full figures and proper help can be given.

Bubblebutt9

I’ve spoken to the finance company. 50% needs to be paid before VT can occur which looking at the sums is around this time next year. 

macman

As we said, the break point comes at around 36 months or later. So, if you want to VT now, you'll have to bear the penalty.

DrEskimo

Bubblebutt9 said:

I’ve spoken to the finance company. 50% needs to be paid before VT can occur which looking at the sums is around this time next year. 

So you know VT is around £4,500. 

Get the settlement figure today and then stick the reg into WBAC as a starting point. What is the difference between those two?

Bubblebutt9

There is c£2k deficit