Paying off PCP early? Rights

f.castle

Hello,

I have a car on finance via a pcp. I can pay it all off in half the time, ie 2 years instead of 4.

1) if I do pay it off, will I save a tonne in interest payments?

2) I heard that the finance company are jointly liable for fixing issues with the car. Can someone direct me to the legalities/ terms of this please so I can understand what the finance company are liable for. As I not sure of the exact wording though someone here may know what I am talking about, eg if the gearbox fails in month 5.
3) if I do pay off the car, are the finance company still liable for issues once I have paid off the finance? Say i pay it all off in month 25 and an issue arises in month 27. I will assume the answer here is no.

thanks

facade

Do you mean pay it off including the GFV and own the car? Yes you can do this, and it will save money because you are borrowing for a shorter time.

If you mean pay off just the PCP payments, you can't keep driving the car, it goes back- you actually pay back half of what you borrowed, (50% of the original cost of the car plus some interest) and it's called voluntary termination.

The finance company own the car, not you so if it is faulty* it is technically their problem, they are not liable for anything though, although they will help you with disputes. 

Once you own it, it is your problem.

*faulty due to a manufacturing defect. If you break it or wear it out it is your responsibility to repair the car you are borrowing before you hand it back.

The_Fat_Controller

If you clear the finance at the two year point you will not have paid half the costs of the contract, you have to add in the balloon payment (GFV), a settlement figure will be provided by the finance company and you will save some interest.

Once finance is cleared you own the car and become responsible for everything.

If you can actually prove an inherent fault you may get help from the finance company, however they will not pay for any wear and tear items and there will no doubt be a clause in your contract obliging you to have the car serviced according to the manufacturer's schedule.

For instance if a timing belt was not changed on time and subsequently fails, you will pick up the bill.

Voluntary termination is a whole different ball game and you can only walk away once 50% of the whole contract amount including GFV and interest has been paid.

On a 4 year PCP that will not happen at the 2 year point, it will be probably be well into year 3 or even later.

When you hand the car back, either at the end of the PCP if you do not pay the balloon or under VT, they may also charge you for any damage, missing keys or an incomplete service history.

Choose you options very carefully !