PCP - Can you renegotiate the rate afterwards?

viperviolin

Hi 
Hoping this is the correct place to post this. 
I have a PCP from Honda and my per month payment was based on a previous job which was paying higher than what I am on now. I got made redundant last year and had to take a significant pay cut. Is there a way to refinance or renegotiate this rate to bring my monthly repayments down? I don't have a good credit score now on Experian thanks to the vicious financial cycle that followed this redundancy. 
Thanks

Desmond_Hume

Obtaining a settlement figure and seeing if you can sell it would be a better option. Then buy something cheaper and used until you’re back to a position that’s more stable. It reads now like you can’t afford the car so instead of fudging it, just suck it up and get rid.  

Car_54

Desmond_Hume said:

Obtaining a settlement figure and seeing if you can sell it would be a better option. Then buy something cheaper and used until you’re back to a position that’s more stable. It reads now like you can’t afford the car so instead of fudging it, just suck it up and get rid.  

Agreed.

If it were possible to renegotiate, I suspect they'd want to raise it in view of the changed circs.

Goudy

Talk to the finance company and tell them your situation.

Desmonds suggestion isn't a bad option.
If you've had your PCP deal a few years already it could actually pay you.
Trouble is you would be without a car and if one is necessary you're starting again, probably at the bottom of the market, which to be honest is already filled over inflated bangers.

New cars have shot up in price in the last couple of years, this has dragged the prices of used up with them.
There's a chance if you took your PCP when the prices were lower that the used value is now above what your owe.

There's little chance of this if your PCP is a recent one as you will still owe quite a lot plus the interest and a new car's initial depreciation is quite high, but if you've already paid off enough there's more than a good chance it's worth the same or more than you owe.

You need to obtain a settlement figure from the finance company.
This is an adjusted figure of what you still owe.
They can't continue to charge you all the interest if you settle early, only around 2 months worth of interest, so it should work out less than it would if you continued to pay the monthlies.
Obviously the earlier you settle the more interest you won't pay.

Then use the car buying sites to value your car (remember they'll likely knock it down when it comes to buying it by a few hundred) even if it's in perfect condition.


There are other options, they might rearrange the contract to add further years on or turn what you still owe (monthlies and GFV) into a straight loan over lots more years.
In you are in real financial trouble, that might not help but if you need a reliable car for work it might be an option worth considering.


You could VT it.
VT stands for Voluntary Termination and it's a option if you have paid or are willing to pay at least 50% of the total amount payable.
You have the legal right to do this under the consumer credit act 1974 and it should not effect your credit rating.

The problem most find is that the 50% mark is normally very near when the GFV in due. Which means there are usually other options available, like just handing it back to the finance company at the end of the contract.