Upgrading PCP deal early with poor credit

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    • #125347
      AvatarTeresa Mitchell

      Hi Stuart
      I have 5 months left on a 48 month Pcp lease.
      The dealer has offered me an early upgrade in time for Xmas. My problem is, my credit was good when I entered lease 3 years 7 months ago…but my income dropped a couple of years ago and I found myself in a DMP, now with poor credit.
      I have an appointment next week to seal the deal, but I’m worried they will re-check my credit file and change their minds. I’ve never missed a car ppayment and have agreed to pay a £500 deposit. Is it possible that could take my deposit and then refuse to re-finance the upgrade? Also, if i am refused, can i continue with current car for the next 5 months or will they take it away once they check my credit? Theyve not had reason to check on me since the DMP and my payments are always on time.

    • #125429
      Stuart MassonStuart Masson

      Hi Teresa. Dealers offer early upgrades without knowing any of your personal details – it’s simply an excuse to get you into the showroom and try to sell you another car. It’s very unusual for these special offers to actually be any good, and the cost to get out of your current deal and start again is often not worth it.

      To start another PCP, the finance company will assess your application from scratch, exactly as they did last time. So if your credit score and history is poor, you are likely to be rejected. Your good payment history is unlikely to make any difference. If your finance application is rejected, the dealer should refund your £500 without any problems (although it may take a while and you may have to keep hassling them until they actually do it).

      The other possibility is that they offer you finance, but at a much higher interest rate than initially quoted. You have the right to your deposit back if the finance offer does not match the quote that convinced you to buy the car and pay a deposit.

      However, this should not affect your current agreement. As long as you keep making your payments on time, the finance company will have no reason to take any action against you.

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