Terminating PCP after 50%

[Nicole]

Hi

Hoping you can advise. I have gone over my 50% PCP payments and had no idea that you can terminate the PCP agreement after this! A few months ago i had the car serviced at a none dealership garage – i realise this may incur a charge but wondered with the fact that i only have only 9 months to go before the PCP balloon payment (PCP agreement was over 3 years) – whether there is any chance that this charge will be absorbed owing to the fact that i have paid well over the 50% now?

The mileage is within the agreeable limit, however i just took the decision at the time that i would purchase the car outright (stupidly!) but now would like to ‘declutter’ my financial obligations – hopefully!

Can you advise the best way forward?

[Stuart Masson]

Hi Nicole. There is no provision to barter extra payments over the 50% for breaching your contractual conditions. Like excess mileage, servicing is a topic of debate when VTing a car. Since you are not trying to claim the guaranteed future value (GMFV), you can argue that the servicing requirements are irrelevant. The finance company would argue this, but whether or not they would win the argument in court hasn’t ever been tested.

If you have nine months to go in a three-year PCP, you are probably only just over the 50% mark anyway, because the Total Amount Payable includes the balloon amount and usually you only hit 50% just before the end of the contract.

[Chris]

What happens if i have more than 50%?
Finance plus interest: £8500
Payment left : £1600.
Due to illness I can pay the balance which is about 8 months left.when I do VT do I get any money back?

[Stuart Masson]

Hi Chris. VT allows you to hand the car back at any time as long as you pay/have paid at least 50% of the total amount payable. You don’t get any refund if you have paid more than 50%, as you have presumably still had use of the vehicle during that time.

Voluntary termination was created with situations like yours specifically in mind, rather than as an opportunity for people who can afford the car to give it back and dodge their contractual commitments.

[Chris]

Under VT does it matter if the car had faults. I have paid over 50% just have 1600 left out of 8 half grand. Unfortunately I have taken ill before I could fix it for use

[Stuart Masson]

Yes, you can be charged for any faults or damages that do not fall under normal wear and tear.

[Michael Searle]

Hello Stuart,
I am looking for a bit of advice please. I purchased a vehicle 2 years ago on a 4 year pcp. I went to look for a new vehicle recently only to be told that the value of my car has plummeted, my car has been valued at around £5500 and continuing to drop, yet I owe around £9500, so by the time my 4 year pcp ends the car will be virtually valueless, I do have the guaranteed future value figure, but its going to be worth less than that I suspect! I was advised by the garage salesman to opt for voluntary termination, I have made enquiries with finance company I am now in a position to start this procedure as I have paid 50%, but they are going to charge me excess mileage, firstly can I refuse? Also I assume my car once returned will be sent for auction, to sell for what its worth, I have had an idea to approach the finance company and ask if I can purchase the car at an approx auction price and keep the car to save all the hassle of sending back etc, has this been done/can be done?
Thank you

[Stuart Masson]

Hi Michael. Have a read of our article about voluntary termination.

No, you can’t VT the car and then try to buy it from the finance company. If you want to keep the car, you can settle the finance now by paying whatever is still owed. You will save on two years’ worth of interest because you are not financing the car over the full four years, so your settlement amount will be reduced.

[Michael Searle]

Hello Stuart,
Thanks very much for quick response and advice.Just to clarify I was told when enquiring about VT that I would have to pay excess mileage, I’ve read the various threads on this, do I just say to the company I do not need to pay excess mileage and ignore all requests to pay it? Like others who have stated before me I don’t want my credit score to be hit or threatening court action etc.

[Stuart Masson]

We cover this on Page 2 of the voluntary termination article:

Car finance: Voluntary termination of a PCP or HP

[Chris D]

Hi Stuart,
I am currently looking to VT my Audi, after paying more than 50% of the HP agreement. I have been told that the only additional cost, would be any damages above wear and tear. My question is who determines what equates to wear and tear? and if I disagree with their assessment, what are my rights to argue the assessment.

Thank You
Chris

[Stuart Masson]

Hi Chris. It’s simply a matter of negotiation; there is no clear guideline as to what is damage and what is wear and tear. You can argue with them until one of you gives up.

[Alan Lowe]

Hi. I know you have answered many questions re voluntary termination but regardless, I am still nervous.
I will have paid 50% of total payments in February and wish to terminate then, although i have checked my PCP contract (Volvo via Santander) and cannot see anything re Voluntary termination – hence my being nervous..
As its not mentioned in the paperwork i have is this VT still available and what do you suggest as I want to be sure that i can voluntarily terminate as i need to cease the payments in February.
Do i call and ask for the t&C’s covering VT for peace of mind or just leave it until nearere the time?
Thanks in advance
Alan

[Alan Lowe]

Hi Again – further info, i spoke with the salesman at Volvo today trying to get hold of the t&C’s, he didnt have them but is going to get them for me and mentioned that he wasnt sure my PCP had VT rights, “as not all conttacts allow you these rights”.
This seems to contradict all the advice you have given Stuart and so im pretty sure they are just trying to scare me into not doing anything.
Would be great if you could calm my nerves though and confirm all PCP’s do have this clause.
Thanks
Alan lowe

[Stuart Masson]

Hi Alan. You will need to call Santander – the contact details should be in your finance paperwork somewhere. The Volvo dealer is entirely uninvolved in the process and is unlikely to be of any assistance whatsoever.

If your finance agreement is a PCP (not a PCH), then you should have voluntary termination rights. If you call Santander and specifically ask about it, they are required to provide you the information.

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