Car faults towards the end of PCP contract

Chunky_monkey_91

Hi all, hope this is the appropriate forum for the below:

My partner is coming to the end of her 4 year on PCP contract with VW finance. The car is currently in the garage, awaiting a spare part that has been on back order (under warranty) for 6 months. This severely restricts our options for next steps:

• VW are offering to settle the payment in exchange for a newer car with them, and they take on responsibility for the spare part. This is currently our only real option.
• If we were to pay the settlement (£11,000) amount on March 1st, we would potentially be without a working car.
• No other car manufacturer is prepared to purchase the car without clarity on where this part is up to, so we realistically cannot choose another manufacturer.

As it stands, £11,000 will be going out of our account on March 1st, and we will inherit a faulty car with no clear plan on when the part will arrive and who is covering the cost for it.

A month ago (!!!) We have asked VW if we were to pay the settlement amount whether the part would still be eligible under warranty, and whether we would be allowed to keep the courtesy car until the part arrives. We are yet to receive an answer. So our questions:

• Has anyone any experience of a similar issue?
• What would typically happen to the warranty of the part, which has been ordered under warranty but will arrive in after it has expired?
• What rights do we have to refuse the money being taken out of our account?
• What other levers do we have to apply pressure when they have been passing responsibility between the dealership, VW Customer service and VW finance?

Hope the above makes sense and happy to explain any more. Grateful for any advice!

Goudy

Have you talked to VW finance?

With a PCP you have a choice when the GFV or final payment is due (but you need to decide before that).

Pay the GFV and keep the car.

Trade it in and use any positive equity towards your next car.

Hand the car back to the finance company.

This last option has caveats, ie the car is within contracted mileage and in a certain condition.

As it's not your fault the car isn't in the specified condition, it's not your fault that you cannot hand it back as such. In fact it's only because another branch of their company cannot fix the faults that are covered under their warranty.

I would tell them you are handing it back at the end of the contract even though they themselves might not have fixed it under warranty.

If they threaten to make you pay a short fall in value because of the faults, tell them you expect the warranty to cover those costs as those faults only exist because they are unable to fix it before the contract runs out.

Chunky_monkey_91

Thanks Goudy. From what you've said it looks like we need to explore your option 3 further.

To directly answer your options…

• Keeping the car is currently the default option if no decision is made. The issue is we don't know what will happen with the part on order after March 1st, and we don't want to go down this route until we have clarity - which we are not receiving.
  Do we have any grounds to refuse this direct debit to be withdrawn?
• The VW dealership have offered a part exchange, but this is our frustration! The customer service has not been great and we feel forced down this route, rather than part exchanging with another dealership - that's not really possible until we have clarity on the part.
• On the final option, car is within mileage and is in good enough conditoin. We haven't had that many direct dealings with VW finance, it's been the dealership and VW customer service (they're all semi related though?). I will check the paperwork - if we just hand it back this might not be as financially advantageous, and not provide as much equity.

Thank you all.

Mildly_Miffed

"What would typically happen to the warranty of the part, which has been ordered under warranty but will arrive in after it has expired?"

There is normally no specific additional warranty on parts replaced under the vehicle's original warranty.

If you were to pay for the part to be supplied and fitted, it would likely carry a warranty.

"What rights do we have to refuse the money being taken out of our account?"

When the PCP expires, you either hand the car back to the financier in full working order - or you pay the balloon and take ownership of the car.

You can't hand it back in full working order - and you don't want to pay the balloon. Given the reason you can't is outside your control, and is a VW issue, then VW Finance imho should be being more flexible and treating the car as if it's working…

paul_c123

If its under warranty, then you could just hand it back, refuse to pay any excess, tell them its under warranty so any extra charge is £0, and wish them luck on sorting out the part. I bet they can get it quicker to resell the car than a plebeian.

Goudy

https://forums.moneysavingexpert.com/discussion/comment/81880216#Comment_81880216

If you hand it back to the finance company any equity/negative equity is no longer to your benefit/problem. So if they agree to take it back while it's waiting for a warranty repair, you just walk away from it.

I can see your thinking that a solution has to be financially advantageous in your favour but the wait for a clear outcome on the warranty repair isn't helping and you might have to change your view on what is actually advantageous.

You have already explored one option, trading it in and you seem to have dismissed it for various reasons. As your contract is now fast approaching it's end, you perhaps need to explore the other options.

These appear to be keep it until it's repaired which might mean possibly paying the GFV in the hope it's worth more than the GFV to trade in against another car. Have you researched it's real value as a trade in? The risk is possibly having to pay the GFV and perhaps not achieving a value that covers what you paid/owed in the case of the GFV. Not really financially advantageous, there's a couple of risks there.

Or hopefully get VW finance to agree to take the car back at the end of the contract and walk away from it. If they agree, you should be able to walk away free of any risk of cost other than what is set out in the contract re mileage and fair wear and tear.

If it was mine I would want to know all the details of every option open to me so I could make an informed choice. The possibility of walking away from it without anymore cost and headache might be about as advantageous as it gets.

Chunky_monkey_91

Thanks Goudy. You're right that we can't make a decision until we know the warranty repair. Had an email yesterday confirming that it is still on back order but no idea on arrival date, and no decision. We continue to chase....

Given mileage and overall condition, IF the part was to arrive its real value as a trade in is slightly more than the GFV - so if we bought it off VW and then went to webuyanycar or similar we would probably have money to put towards the deposit for a new car. But as you say, a lot of risk there...

Will post when we get an update. Thanks again.

Arunmor

What is the part? Option to buy elsewhere or secondhand?

born_again

https://forums.moneysavingexpert.com/discussion/comment/81882616#Comment_81882616

Not if you want the warranty claim to pay.

Arunmor

https://forums.moneysavingexpert.com/discussion/comment/81882879#Comment_81882879

Aye, but that depends on the price of the part, might be worth paying for the part to get the deal back on track. All depends on the part and costs involved.

sheslookinhot

https://forums.moneysavingexpert.com/discussion/comment/81883792#Comment_81883792

Agreed, sensible approach. Rather a second hand part than 6 months without a car.