Extortionate end of PCP charge

Marksfish

I am normally quite savvy with money and make sure I get the best out of everything I buy. I bought a car 2 years ago with Santander on 0% finance. I have paid on time every month and the deal finishes next month with £400 to pay. I looked into buying a new car and voluntary termination was bandied about. I wrote to Santander and asked them if I could just pay up the 2 months and send the car back. They had me fill in an online form requesting VT. I filled it in on a Saturday, bank holiday Monday I had a call saying the car collection was being arranged. At no time did I ever receive a final termination figure from Santander.

The collection is booked for this Friday, today I have received a letter stating I owe £1900 and the agreement is cancelled. I intend to call them tomorrow as a) I didn't agree to this amount, b) I wasn't informed of this amount and given the option to continue, c) this seems to be an unfair amount considering the payments left until end of term. To add to this, I received a letter this gone Saturday informing me of the end of my plan and asking if I want to keep or return FOC.

I thought I had crossed all the t;s and dotted the i's, but I have slipped up here. I also believe Santander have failed in their procedures by not advising of any costs involved, or maybe even refusing the VT?

I need to speak to someone tomorrow and see if I have any options as I am sure there is something amiss here.

Thanks for any input, apart for what a muppet i've been , as I already know that!

DrEskimo

Before going into all this, have you actually checked what the car is worth relative to the finance owing on it?

You can trade the car in to any local garage or dealer, or sell via a broker like WeBuyAnyCar or Motorway and they will clear the finance and you can pocket any difference. 

It’s value will be based on its condition and mileage and so no worrying about additional fees, and you can of course arrange to drop the car off whenever you like. 

Grumpy_chap

DrEskimo said:

You can trade the car in to any local garage or dealer, or sell via a broker like WeBuyAnyCar or Motorway and they will clear the finance and pocket any difference. 

For clarity, if the car is worth more than the finance, it is the OP that gets to pocket the difference, not WBAC / Motorway.

Marksfish

The car is worth far less than the balloon payment, hence it going back with the idea the finance takes the hit. I can buy a new model of the same car for about £5k more than the payment wanted on the agreement, due to a new model coming out. I wanted to keep the car, but was not feasible.

DrEskimo

Grumpy_chap said:

DrEskimo said:

You can trade the car in to any local garage or dealer, or sell via a broker like WeBuyAnyCar or Motorway and they will clear the finance and pocket any difference. 

For clarity, if the car is worth more than the finance, it is the OP that gets to pocket the difference, not WBAC / Motorway.

Yes thank you, edited to make that clear now!

DrEskimo

Marksfish said:

The car is worth far less than the balloon payment, hence it going back with the idea the finance takes the hit. I can buy a new model of the same car for about £5k more than the payment wanted on the agreement, due to a new model coming out. I wanted to keep the car, but was not feasible.

It’s really not clear what the £1900 is for in your post?

Have they provided a breakdown of these costs anywhere?

Marksfish

There is no explanation, just a Voluntary Termination Liability amount.  I am presuming it includes my final 2x £222 payments plus the £75 collection fee. No idea what the rest is as I have had no notifications and no costs to agree to before this was issued.

~Brock~

In order to VT and walk away owing nothing you need to have paid 50% of the total amount payable, which will include any initial deposit and the balloon payment.  So, how much is the total amount payable and how much have you paid already?  If the difference is £1900 then they are correct.  If not, then you need to be asking why.