Car Finance- Voluntary Termination PLEASE HELP

[SMPLondon]

Hi all,

Really hoping someone can help.

I have a car on PCP finance. I paid £3,000 deposit in July last year.
The total owed at the start of the contract - £4,645 plus £1,295 in interest for the finance. (Total cost inc interest is £8,940)
I pay 36 months at £65 per month + £3,643.00 final payment

I need to terminate early as I am moving overseas and so no longer need my car.

My question is, what happens to the £3,000 deposit I have paid and will the remaining payments plus the final payment be terminated?

I also understand you must have paid of 50% of the total amount which I assume is half of £8,940 = £4,470. I will have paid off around £3,600 inc the deposit so will I just have to pay up that £870 at once and will I lose that money?

Any help gratefully received.

Thank you,

SMP

[R0b]

Re: Car Finance- Voluntary Termination PLEASE HELP

Hi all,

Really hoping someone can help.

I have a car on PCP finance. I paid £3,000 deposit in July last year.
The total owed at the start of the contract - £4,645 plus £1,295 in interest for the finance. (Total cost inc interest is £8,940)
I pay 36 months at £65 per month + £3,643.00 final payment

I need to terminate early as I am moving overseas and so no longer need my car.

My question is, what happens to the £3,000 deposit I have paid and will the remaining payments plus the final payment be terminated?

I also understand you must have paid of 50% of the total amount which I assume is half of £8,940 = £4,470. I will have paid off around £3,600 inc the deposit so will I just have to pay up that £870 at once and will I lose that money?

Any help gratefully received.

Thank you,

SMP

Your deposit isn't included towards the 50% it is simply used to reduce your monthly instalments so you may be some while off the 50% mark at the moment.

You could still VT and then come up with a repayment plan to pay off the remaining 50% of the car, is that possible?

[SMPLondon]

Re: Car Finance- Voluntary Termination PLEASE HELP

Thank you for coming back Rob and explaining the 50% is on the remaining balance.

My main question is though, do I just lose all of the money I have paid so far (namely the 3k deposit), plus the 50% of the remaining cost?

It seems that I would have paid nearly £6,000 for the use of a car for 9 months to be left with nothing?

Thank you

[R0b]

Re: Car Finance- Voluntary Termination PLEASE HELP

I'm afraid so yes, PCP agreements generally differ from 'true' HP agreements because under a PCP your paying off the depreciation value of the car with a large balloon payment at the end of it whereas under a HP agreement you pay both the depreciation and the cost of the car which results in a much lower balloon payment at the end.

That's why under HP agreements you can normally VT halfway through the term of the agreement having already paid 50% (give or take). Because your just paying the depreciation only, your monthly payments tend to be lower which means you have more months to pay off before you hit the 50% mark. Its not uncommon to reach the 50% under a PCP at month 30 of a 36 month agreement.

It's not an ideal situation to be in but this is why consumers should be aware of what they are actually entering before they sign on the dotted line. I know alot of people who just think a Hire Purchase is one type of agreement but it is in fact an umbrella term which encompasses different types of agreements based on the original HP agreement.

Deposits are only good for reducing your monthly instalments over the contractual period, they do not count towards the 50% of the total amount payable because when calculating the total amount the deposit is included.

Hope that helps

[cheekal]

Re: Car Finance- Voluntary Termination PLEASE HELP

Hi
Just VT CAR
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