Voluntary Termination at less than 50%

[Projekt]

Hi,
I'm looking for some advice to terminate a PCP with Mercedes.
I'm 32 months into a 36 month PCP with only a few months to go. However, under the contract I will never reach the 50% rule as the GFV of the car is 51% of the overall agreement - including interest and fees.


I've called Mercedes and they say I'll have to complete paperwork before they'll accept the VT as I'm not 50% through. Where do I stand?
Can I ask for a quote to get me to 50% without being forced to sign their VT paperwork - which by the sounds of it will be punitive?

TIA

[R0b]

Re: Voluntary Termination at less than 50%

Hi,
I'm looking for some advice to terminate a PCP with Mercedes.
I'm 32 months into a 36 month PCP with only a few months to go. However, under the contract I will never reach the 50% rule as the GFV of the car is 51% of the overall agreement - including interest and fees.


I've called Mercedes and they say I'll have to complete paperwork before they'll accept the VT as I'm not 50% through. Where do I stand?
Can I ask for a quote to get me to 50% without being forced to sign their VT paperwork - which by the sounds of it will be punitive?

TIA

Are you able to upload a copy of the contract, personal information removed? I cant make any comment unless I've seen the full terms and conditions.

[Projekt]

Re: Voluntary Termination at less than 50%

Hi and thanks for the reply. I've attached a copy of the contract.
TIA

[R0b]

Re: Voluntary Termination at less than 50%

So I've looked at the contract and just so I get my calculations right, it says your monthly payment is £372.77

By my calculations, 36 x £372.77 = £13,419.72 which is well below the 50% of the total amount payable.

It would appear that you are forced to see the contract to the end because otherwise you will incur an additional charge of around £5,000 for voluntarily terminating the agreement. I can only imagine that Mercedes have done this so that they can at least recover the excess mileage charges if you have exceeded the agreed mileage limit at the end of the 3 year term.

It is arguable that this sort of agreement would create an unfair relationship and/or unfair term because by keeping the monthly instalments relatively low, it could be inferred that the right to VT under this agreement is actually a penalty, and that can be seen by the fact that if you wanted to VT, it's going to cost you £5,000 than it would if you completed the contract, which, could be seen as a penalty.

The right to VT is implemented into the CCA to afford protection to the debtor in the event of unforeseen circumstances, yet in your case, Mercedes appear to have effectively prevented you from exercising that right (not literally, but as a deterrent).

I've not come across this type of situation before so its unlikely to have been tested before the courts but it will probably be a grey area, since on the one hand you agreed to the terms yet on the other, Mercedes know that realistically, a debtor isn't going to want to VT because it will cost them a lot more money to do so.

I'm speaking from the top of my head from a debtor point of view, but it depends on what you actually want to do. If you VT then I would imagine Mercedes will want that extra £5,000 which makes up half the total price. You either pay them o dispute it, and they'll probably take you to court over it given such a high amount. Or you can follow the contract to the end, but if you exceed the mileage limit, your going to get stung for excess mileage charges.

It sounds like a lose / lose situation for you but it pays to make sure to do your sums and work out the repercussions than signing the agreement and worrying about it later. As a final note, you can Vt up until the final payment becomes due, after that you lose your right.

[Projekt]

Re: Voluntary Termination at less than 50%

I also paid a £6,000 deposit (right-hand side of page 1). But even adding that to the £13,419.72 still brings me to less than 50%.
As of today, I've paid £11,928.64+£6,000=£17,928.44

[Projekt]

Re: Voluntary Termination at less than 50%

The main point is, they won't tell me how much I still owe to get it to 50%; nor how to pay it until I've signed their paperwork (which I haven't yet seen but I know will be bad).
I've got no problem with paying excess mileage as I've barely gone 50 miles over the allowance. But I'm pretty sure they're going to hammer me for all the alloys being scratched and more than the allowed stone chips to the bonnet. This contract allows me two chips to the front of the car but there are four. Regardless of how small they are, there's still four - two more than permitted.

[Projekt]

Re: Voluntary Termination at less than 50%

A quick follow up to close this thread.
It worked out just a little cheaper for me to 'handback' the car instead of voluntarily terminate. The process was smooth and simple from start to finish. I handed the car back to the local dealership who performed the inspection and was on my way within an hour.
Thanks to R0b for the replies.

[R0b]

Re: Voluntary Termination at less than 50%

Sorry I must have missed your last posts on this.

Could you clarify what you mean by handing the car back? Did you surrender the car and pay the difference between the vehicle and the amount outstanding? Where does the dealer come into this if the contract is between you and Mercedes' financial arm?