End PCP Deal

brydo86

Hi, I am looking for some advice on behalf of my mum in law. Over the last few months she has went through a seperation, leaving her home and, yeah, changing her life for the better.

Unfortunately she had taken out a new PCP in August. 

She is now worried about this as she really can't afford it and would rather give up her car, she would like to know what is the best way to go about this? She has said she's happy to hand it back and take the hit on the credit file but obviously that's no use long term.

If anyone can give realistic advice on what's the best way to go any this then it would be much appreciated. Thanks.

elsien

Giving up the car isn’t going to end the deal - she will still owe money that they will be chasing her for.

Has she checked the terms and conditions of her specific agreement, so she understands the position that she would be in? 

https://www.stepchange.org/debt-info/car-finance-debt.aspx#:~:text=You%20can't%20sell%20a%20car%20on%20PCP%20because%20it,pay%20if%20you%20do%20this.

molerat

It is more than a hit on the credit file, giving up the car is unlikely to be a cheap option.  She will need to pay half of the total cost of the credit to do a VT which is the least harmful option and not paying it could lead to debt collectors or court action.  The other option is to get an early settlement figure and find out how much the car is worth with WBAC / Arnold Clark etc.  This early in it is unlikely to be a small gap.  There is of course the nuclear option which should only be considered if there are other debts and no assets.

lopsyfa

molerat said:

It is more than a hit on the credit file, giving up the car is unlikely to be a cheap option.  She will need to pay half of the total cost of the credit to do a VT which is the least harmful option and not paying it could lead to debt collectors or court action.  The other option is to get an early settlement figure and find out how much the car is worth with WBAC / Arnold Clark etc.  This early in it is unlikely to be a small gap.  There is of course the nuclear option which should only be considered if there are other debts and no assets.

I agree but in reverse order. At the beginning of the finance agreement, voluntary termination will be the nuclear option at you have to give the car plus top up the payment to half. The gap between motorway/WBAC should be smaller than the amount required to voluntarily terminate the agreement