Car Lease PCP Advice

abz88 · 16 October 2019 at 10:31AM

MacCarQ wrote: »

Sadly, my company will not allow me to own a car over 5 years old (although any they give me can be up to 8 years old, go figure )

Eventually owning isn't likely to ever be an option for me, but since i get easily bored with any car I prefer the shorter 3 year term so i can keep changing; not financially sound, but time will tell if I change my way of thinking.

My real concern is how starting a PCP and then terminating it after half is paid is then viewed by future providers and on my credit file.

Meant to say, it's not terminated after half is paid. You get a settlement figure (this can be requested at any time, not just close to the 60 month mark) which is paid off in full by you (to keep the car), by the next dealership (to move you onto a new PCP) or hand it back (usually you need to have paid off 50% of it for this option) as the remaining value of the car outweighs the settlement amount (usually, but you might have to pay the difference or if you have gone above your mileage). So the loan is repaid in full regardless of how you do it and it won't be an issue on your credit report (as with any loan though, if you miss payments etc then its a different story)

abz88 · 16 October 2019 at 10:39AM

MacCarQ wrote: »

Thanks abz88, but my concern is that the so called lease company I am going through is telling me to simply hand it back after my requested 3 year lease period and owe nothing since the laws around PCP mean so long as I have paid half or more of the original loan I will owe nothing.

that in itself is fine, but what adverse affect might that have on my credit score and/or future ability to enter another agreement...if I were the potential loan company in future I might be dubious about agreeing a loan to someone who would drop out half way through potentially leaving me out of pocket.

I would be very wary of this. If you are leasing a car, there should be no PCP agreement involved. It sounds like you have been told you are entering a lease when it is in fact a PCP. As I stated in another reply, you can hand it back if 50% of the car is paid off (that will likely take longer than 3 years as the value of the car includes a final balloon payment) but if the settlement it below the value of the car you will have to make up the difference, plus any additional mileage you have done.

foxy-stoat · 16 October 2019 at 10:44AM

Can you not buy a 5 year old car with a loan for 3 years and replace once it is 8 years old and repeat?

You wont be able to hand the car you are talking about on year 3 of a 5 year PCP as you wouldnt of reached the 50% point.

MacCarQ · 16 October 2019 at 1:56PM

Thanks, but I am note sure you understood the situation;

Any car I obtain must me under 1 year old when obtained and I can only keep it until the car is 5 years old.

The rules are different for me than they are for the company (since they make the rules); they can make me keep a company car they provide for up to 8 years

bris · 19 October 2019 at 8:41AM

What they are suggesting is a VT, voluntary termination. It's the law that allows this not the under writers, they just have to comply.

Legally it is not supposed to be held against you but as the lenders don't like you doing this it can be difficult to use the same lender twice. I know of one person who couldn't but had no problems else where.

MacCarQ · 19 October 2019 at 10:20AM

Thanks Bris.

I ran this whole thing by another Lease company I’d been speaking to (basically, they couldn’t match the deal and started asking questions).
I gave them the information, they initially showed concern, especially about the lack of transparency around the financing, but once I’d shown them the actual agreement and wording they came back quite sour and tried to promote their own vehicle.

The one I’m getting was registered in July, so they went on about theirs being unregistered etc, but it was a different car, lower spec and more money; like I said, sour.

They did say they saw nothing wrong with what they read, so going for it anyway and what will be will be.

Many thanks everyone 👍🏻👍🏻👍🏻

Penelopa.Pitstop · 20 October 2019 at 2:07PM

I think it's unfair and not honest from first company and I would not enter in 5 years PCP if I wanted PCH for 3 years. Have you checked other online offers?

Don't forget that in case of PCH road tax is included in price, in case of PCP, you pay it yourself. If car is below £40K, there's not huge different but it certainly make difference for cars with RRP above £40K.

Check Leasing.com, whatcar.co.uk and https://www.leaseloco.com/ It might be worth doing some quotes at carwow. Don't agree to a first deal from dishonest broker, you may regret it later.

Car Lease PCP Advice

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