Voluntary Termination

NathanMorgan

from my understanding I can VT after paying off 50% of the total amount on the PCP finance.

so...my total amount at the start of the finance was £25,000 so 50% of that is £12,500 and I’ve read that you’ve got to reach the balloon payment so mine is £12,700 so as long as I’ve paid the amount up to the £12,700 I can hand the car back or am I missing something?

AdrianC

No, you've misunderstood. It's 50% of the total borrowed - which INCLUDES the balloon. Not just 50% of the monthly payments.

If the amount you owe "reaches the balloon", then you've got to the end of the term, so the car goes back anyway...

DrEskimo

It's total amount including all interest, fees deposit and the capital borrowed (which includes the final balloon payment).

Not just the total amount the car was sold for.

If your balloon is >50% of the cars original price then you will never reach VT during the term. This isn't uncommon on PCP deals over short terms (18-24m).

Of course you don't have to VT at all. If the cars value at trade price is same or greater at any point over the agreement, then you can simply sell it to a dealer and settle the finance. This is also true at the end of the agreement.

NathanMorgan

right so I need to pay at least £18,500?

neilmcl

NathanMorgan said:

right so I need to pay at least £18,500?

Read your finance agreement, within it it will state exactly what the total amount payable is, it might even state what the VT figure is.

NathanMorgan

neilmcl said:

NathanMorgan said:

right so I need to pay at least £18,500?

Read your finance agreement, within it it will state exactly what the total amount payable is, it might even state what the VT figure is.

no checked the agreement and it doesn’t state it.

Grumpy_chap

NathanMorgan said:

right so I need to pay at least £18,500?

Where do you get that number from?

Based on the figures you stated:

• £25,000 car
• £12,700 balloon payment

This agreement will never reach 50% point before the end of term.

You may have paid £12,500 so far, if you are nearly through the term, but those payment will be a combination of capital plus interest.  You need to have paid half of everything including fees, interest and the balloon payment before you can VT.

AdrianC

Grumpy_chap said:

NathanMorgan said:

right so I need to pay at least £18,500?

Where do you get that number from?

Based on the figures you stated:

• £25,000 car
• £12,700 balloon payment

This agreement will never reach 50% point before the end of term.

Unless it's ~£40k car...
£25k in term repayments, £12,700 balloon.

But that'd be either a very long term, or hilariously bad depreciation.

OP - give us the figures you've got, and we'll help you figure it out.

NathanMorgan

AdrianC said:

Grumpy_chap said:

NathanMorgan said:

right so I need to pay at least £18,500?

Where do you get that number from?

Based on the figures you stated:

• £25,000 car
• £12,700 balloon payment

This agreement will never reach 50% point before the end of term.

Unless it's ~£40k car...
£25k in term repayments, £12,700 balloon.

But that'd be either a very long term, or hilariously bad depreciation.

OP - give us the figures you've got, and we'll help you figure it out.

can’t really think of anymore info that I’ve already given that could help.

I had the £18,500 figure from adding the total amount for the car + the balloon payment and then dividing it by 50%?

Grumpy_chap

OP - these figures are confusing.  For people to assist, can you advise:

• Car cash price agreed
• Deposit paid
• Interest rate
• Monthly payment and how many months
• Balloon payment
• Any other payments or fees.

daveyjp

The VT date on a PCP is usually a few months before the end of the original PCP loan term.  i.e. on 36 months it's about month 33.