IMPORTANT REMINDER: Please make sure your posts do not contain any personally identifiable information. If you are uploading images, please take extra care that you have redacted all personal information.
Advent-ures in the MSE Forum... Our Advent calendar is live, helping you discover a new corner of the community each day. Visit the homepage and scroll down

Voluntary Termination

in Motoring
17 replies 571 views
NathanMorganNathanMorgan Forumite
172 Posts
Sixth Anniversary 100 Posts
Forumite
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?
«1

Replies

  • AdrianCAdrianC Forumite
    42.2K Posts
    Eighth Anniversary 10,000 Posts Name Dropper
    Forumite
    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...
  • DrEskimoDrEskimo Forumite
    2.2K Posts
    1,000 Posts Fourth Anniversary Name Dropper
    Forumite
    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.
  • NathanMorganNathanMorgan Forumite
    172 Posts
    Sixth Anniversary 100 Posts
    Forumite
    right so I need to pay at least £18,500?
  • neilmclneilmcl Forumite
    19.5K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Forumite
    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.
  • NathanMorganNathanMorgan Forumite
    172 Posts
    Sixth Anniversary 100 Posts
    Forumite
    neilmcl 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_chapGrumpy_chap Forumite
    11.4K Posts
    10,000 Posts Eighth Anniversary Name Dropper Combo Breaker
    Forumite
    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.
  • AdrianCAdrianC Forumite
    42.2K Posts
    Eighth Anniversary 10,000 Posts Name Dropper
    Forumite
    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.
  • NathanMorganNathanMorgan Forumite
    172 Posts
    Sixth Anniversary 100 Posts
    Forumite
    AdrianC 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_chapGrumpy_chap Forumite
    11.4K Posts
    10,000 Posts Eighth Anniversary Name Dropper Combo Breaker
    Forumite
    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.
  • daveyjpdaveyjp Forumite
    11.3K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    Forumite
    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.
Sign In or Register to comment.
Latest MSE News and Guides

Cheapest Christmas dinner

We've crunched the numbers to find the best prices

MSE News

Advent Competitions

The countdown is on

MSE Forum