Voluntay Termination - PCP 57% paid

Jojo1313

Hi all
I have only 8 payments left on my car which is on PCP, I have paid 57%.

Can I hand the car back and if so do I have to pay anything?

Thanks 

Grumpy_chap

Jojo1313 said:

Hi all
I have only 8 payments left on my car which is on PCP, I have paid 57%.

Can I hand the car back and if so do I have to pay anything?

Thanks 

If that is 57% of the total including all interest and charges (including the balloon), then VT should be a option.

Are there any faults with the car?

Why do you wish to end the agreement 8 months ahead of schedule?

Have you checked what the current settlement figure is and whether you can beat that by selling the car elsewhere?  It may give you a more advantageous option than VT.

Ectophile

You may have to pay excess mileage charges, and you may have to pay for any damage beyond tiny scratches.

Otherwise, if you have paid more than 50% of the total amount payable, then you can voluntary terminate at no cost.

Jojo1313

Thanks thats helpful, Yep I will have some excess mileage charges.

If i kept the car until the end of the term and handed it back then for another car , how easy is it to swap from a PCP to a HP? (I think its called hp -  the one were you own the car at the end)
Trouble is I'm currently with Arnold Clarke and wouldn't have another vauxhall if you paid me. This one will be my first and last! Though I know they have other models,  otherwise I have to go to a dealer with no car to trade in, or pay the £4.5k balloon payment. 

Mildly_Miffed

Jojo1313 said:

If i kept the car until the end of the term and handed it back then for another car , how easy is it to swap from a PCP to a HP? (I think its called hp -  the one were you own the car at the end)
Trouble is I'm currently with Arnold Clarke and wouldn't have another vauxhall if you paid me. This one will be my first and last! Though I know they have other models,  otherwise I have to go to a dealer with no car to trade in, or pay the £4.5k balloon payment. 

What is the car worth as a PX?

If it's more than the balloon, put it in for PX.

If it's less, hand it back.

You have two and only two options at the end of a PCP - buy the car for the balloon, or hand it back.
If you trade it in, then you're buying it - but the dealer is doing the paying for you.

And whatever deal or car you go on to next, this PCP is irrelevant. You have one finance product that's ending, and you're taking a completely separate one on. The only question is how to wrap this PCP deal up.

Ectophile

PCP and HP are variations on a theme.  With traditional HP, the final payment is the same as all the others.  Once you've made the final payment, the car is yours.  PCP is the same, except that the final payment (the "balloon payment") is much larger.  But again, if you pay it, the car is yours.

facade

Ectophile said:

PCP and HP are variations on a theme.  With traditional HP, the final payment is the same as all the others.  Once you've made the final payment, the car is yours.  PCP is the same, except that the final payment (the "balloon payment") is much larger.  But again, if you pay it, the car is yours.

The big difference between them is that with HP you are charged monthly interest on a gradually diminishing balance, and with the same APR you would pay less in total.

With PCP you never pay back any of the balloon (until the very end if you take the option to buy it) so you are charged a constant monthly interest on the balloon for the whole term (as well as monthly interest on a gradually diminishing balance), with the same APR you will therefore pay more if you buy the car at the end.

Finance companies prefer PCP as if they correctly estimate the value of the car at the end they will make more money. With new cars they also get a considerable manufacturer discount, so they are able to offer "inducements" to sign people up and still get rich. 

PCP is not normally the cheapest way to finance a second hand car.

MyRealNameToo

Jojo1313 said:

Thanks thats helpful, Yep I will have some excess mileage charges.

If i kept the car until the end of the term and handed it back then for another car , how easy is it to swap from a PCP to a HP? (I think its called hp -  the one were you own the car at the end)
Trouble is I'm currently with Arnold Clarke and wouldn't have another vauxhall if you paid me. This one will be my first and last! Though I know they have other models,  otherwise I have to go to a dealer with no car to trade in, or pay the £4.5k balloon payment. 

PCP legally is HP, it just has a significant balloon and an option to surrender rather than pay the balloon. 

Need to consider the size of the balloon -v- the trade in value... if the balloon is more, surrender it, if the trade in value is more then trade it in.