VT more costly than paying the rest of the term

[Stephen]

I have a Peugeot 208 which I purchased on a 37 month pcp. I have 9 months left and enquirer about VTing the vehicle as I want to upgrade to something bigger.
However, having just received the figures, it would actually be cheaper for me to park the car at the side of the road and pay the rest of the payments rather than VT? How can they charge more than I agreed to over the term?
The figures I have are:
Amount financed: 16124
Deposit: 1500
Credit facility fee: 145
Total interest: 2373.36
Admin fee: 0
Total amout to pay: 20142.36
50% of total to pay: 10071.18

Less
Deposit paid: 1500
Admin fee paid: 145
Total of scheduled payments: 5953.77

Amount due to date: 7598.77
Provisional amount to pay: 2472.41
Amount of arrears due: 0

My monthly payments are around £220 per month.
I even asked if I can give them the car early and just pay them the rest of my agreed payments and they said no.
If this is right, it just seems to make a complete mockery of the whole voluntary termination.

The finance is with PSA.

[Stephen]

Just to add, the gmfv was about 10500 and I can’t part ex as I’m only being offered 9500 for the vehicle.

[Stuart Masson]

Hi Stephen. The reason for the discrepancy is that the VT amount takes the GMFV/balloon into account, whereas your monthly repayments do not cover the balloon.

You currently owe the finance company nine months of payments plus the GMFV amount. If you give the car back, that cancels out the GMFV.

Your situation is slightly unusual in that your GMFV seems to be quite high based on the initial price of the vehicle. It is unusual for the GMFV to be more than 50% over three years. This means that your monthly payments have been quite low, but you have a hefty balloon amount that you have not been repaying and have no intention of repaying. If you VT the car, you are liable for half of that balloon amount.

[Author]

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