Terminating PCP after 50% finance paid

[Jamie_88]

Hi all.

I bought the A3 in June 2015 on a 4yr PCP but I very rarely use it these days due to leasing a car through one of my businesses.

I made a quick call to Audi Finance to see if I could terminate the PCP and I was informed that I could do this in August (which will be when >50% of the finance will have been paid) or pay a fee now to do it early.

What are the implications of doing this? I.e. credit file etc. They did mention that a mark would be made on my credit file but didn't elaborate any further.

Thanks all.

 

[RichardT]

Not really sure about this - I have never had a car on PCP. But I think the consensus of responses will be that you shouldn't hand the car back. You will probably get a better deal by selling it.
But I'm fine with being corrected.

 

[DrEskimo]

Some good info here. Looks pretty reliable but maybe worth looking at other sources too to be sure:
https://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/

This part is specifically on VT and it's effect on your credit history:
https://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/2/

I agree with @RichardT though, I would certainly look at valuations and potential sale prices now vs. your settlement fee and see if it's economical to sell it now (either privately, through sale or return, or just straight sale to a dealer).

If not, then check again in August then look at VT? Seems like a pretty drawn out process, and something I would want to avoid personally...!

 

[Audi Bairn]

Did this with one of my wife's previous TT's.
Process couldn't have been easier.
Once arranged Audi arrange to collect car.
They inspect it for excessive damage then take it away.
Absolutely no effect on credit rating.

 

[DrEskimo]

Did this with one of my wife's previous TT's.
Process couldn't have been easier.
Once arranged Audi arrange to collect car.
They inspect it for excessive damage then take it away.
Absolutely no effect on credit rating.

Ah!

Guess that site I quoted isn’t that reliable then

It suggests you won’t have an issue with credit history, but lender might be less inclined to loan to you....yea I’m sure they often turn down money....! Lol

 

[Chris43]

As Audi Bairn says its a straight forward process, doesn't effect your credit rating. I did it with my Golf GTD. Depending on the condition of your car consider getting any nicks, scratches and wheel damage done before handing it back as VWFS charge extortionate amounts for minor repairs. Its likely Audi will send you what they consider fair wear and tear when you arrange the return.

Thanks to diesel gate and cracking deals on new ones my GTD would never make enough money to clear the finance whether trading in or selling private so it the most economical thing to do was hand it back when it reached 50% repaid. There's no point paying any extra past 50%

From what understood when I contacted VWFS you can pay earlier than 50% but you need to make a one payment to cover the missing monthly payments. This does save some interest charge though.

 

[S32B]

My sister did a VT with a VW, then went to Ford and got a new car with them...no problems at all.

 

[TYb]

Is it 50% of the contract term or 50% of car value do we know? I’m contemplating this with my S3, my Work company car scheme has improved drastically over the last 6 months.

 

[S32B]

Is it 50% of the contract term or 50% of car value do we know? I’m contemplating this with my S3, my Work company car scheme has improved drastically over the last 6 months.

On your finance agreement it will say how much you need to pay back (Total amount payable) it's 50% of that figure, that can be made up of your deposit and payments.

So for arguments sake it says £35,000 you can hand it back after £17,500 has been paid, which could be made up of £5,000 deposit leaving £12,500 So as soon as you have made X amount of monthly payments equal to £12,500 you can hand it back.

If you got a very good discount you could find you are never in VT territory!!! This happened to me! My total amount payable is £36,069 so 50% of that is £17,034 before I can VT. However, my payments are 35 x £388 = £13,580 + the £1,000 deposit = £14,580 I only noticed this a week or so after I had collected the car, I called the finance guy up to double check it, he said it's because you got so much discount up front (21.4%) and he hasn't seen it before! The downside for me is I have to keep it the full 3 years, but I'm paying a lot less than I should for the car The before discount price was £37,300

 

[RichardT]

I thought it was 50% of the total loan - maybe wrong.

 

[S32B]

I thought it was 50% of the total loan - maybe wrong.

No, you repay 50% of the Total Amount Payable (not the total amount borrowed, as you need to include interest and fees).

 

[RichardT]

No, you repay 50% of the Total Amount Payable (not the total amount borrowed, as you need to include interest and fees).

Yes - that's what I meant really. Sorry for not being precise.

 

[haughtss3]

I have done this on two occasions once with my Hyundai and once with my Nissan. It doesn't affect the credit rating although I am told that if you go for finance again with the same company they may refuse you on this basis (Not sure how true this is).

 

[Jamie_88]

Thanks all! I really appreciate your help and advice.

I have decided I will proceed with a VT. There's a miniscule stone chip on the bonnet which I will get repaired and then I will proceed with the VT. The car is in great condition with around 14,100 miles after 2.5 years so hopefully no issues will arise from Audi Finance with the inspection.

 

[Audi Bairn]

Thanks all! I really appreciate your help and advice.

I have decided I will proceed with a VT. There's a miniscule stone chip on the bonnet which I will get repaired and then I will proceed with the VT. The car is in great condition with around 14,100 miles after 2.5 years so hopefully no issues will arise from Audi Finance with the inspection.

You're allowed "reasonable" wear and tear. They send you details of how this is defined when you contact them.

 

[MU57ARD]

Ive never looked into this but I am considering going for VT as I am in some serious negative equity and I dont think I will clear it.

To clarify - do you take into account deposit payments? I paid nearly £5000 deposit and I want to know if this counts towards my VT figure.

If it does I have a rough idea how much ive paid by doing monthly calculations but if i add in the 5000 deposit then I will be just shy of my VT figure by about £1000. Which is great, if not im £6000 short :-/

 

[DrEskimo]

Ive never looked into this but I am considering going for VT as I am in some serious negative equity and I dont think I will clear it.

To clarify - do you take into account deposit payments? I paid nearly £5000 deposit and I want to know if this counts towards my VT figure.

If it does I have a rough idea how much ive paid by doing monthly calculations but if i add in the 5000 deposit then I will be just shy of my VT figure by about £1000. Which is great, if not im £6000 short :-/

Yes.

Add up discount, deposit, all monthly payments, GFV and any early repayment fees. You have to have paid 50% of that figure.

 

[Flowrider99]

VT probably won't affect your credit rating but is recorded against you on your credit file so don't make a habit of it of you will find getting car finance will become difficult.

 

[Chris43]

Ive never looked into this but I am considering going for VT as I am in some serious negative equity and I dont think I will clear it.

To clarify - do you take into account deposit payments? I paid nearly £5000 deposit and I want to know if this counts towards my VT figure.

If it does I have a rough idea how much ive paid by doing monthly calculations but if i add in the 5000 deposit then I will be just shy of my VT figure by about £1000. Which is great, if not im £6000 short :-/

Easiest thing to do is give VWFS a quick call they'll be able to give you accurate figures and the date the last payment is to reach 50 %

I've done VT twice now and haven't had any problems getting finance.

As said above, try and get any minor damage to wheels and bodywork repaired before you give the car back else VWFS will charge a fortune.

 

[Audi Bairn]

Easiest thing to do is give VWFS a quick call they'll be able to give you accurate figures and the date the last payment is to reach 50 %

I've done VT twice now and haven't had any problems getting finance.

As said above, try and get any minor damage to wheels and bodywork repaired before you give the car back else VWFS will charge a fortune.

Wife had a Dolphin Grey TT with two tone 10-spoke alloys - brushed face / grey inside edges.
She'd kerbed a couple of them so we got them blasted back to all silver before inspection as it was easier and cheaper than repairing the two tone bit.
No one batted an eye upon collection for the VT

 

[haughtss3]

Thanks all! I really appreciate your help and advice.

I have decided I will proceed with a VT. There's a miniscule stone chip on the bonnet which I will get repaired and then I will proceed with the VT. The car is in great condition with around 14,100 miles after 2.5 years so hopefully no issues will arise from Audi Finance with the inspection.

I have had two different experiences with this - My Hyundai the guy who came barely checked the car, two front tires were JUST on the legal limit and it had an empty tank (They still took it with no issues).

My Nissan was what I would call pretty much Immaculate condition, they guy who came done a real close inspection and tried to pick on everything - said the tire stuff that they use to replace the spare wheel was missing (Missing when I bought the car) and the front wheel was curbed and needed to be refurbished (This was done by the previous owner and I am very particular with my wheels it was slightest curb mark) Over they charged me over £160 extra as I couldn't prove that it wasn't me.

 

[BarryG79]

I have had two different experiences with this - My Hyundai the guy who came barely checked the car, two front tires were JUST on the legal limit and it had an empty tank (They still took it with no issues).

My Nissan was what I would call pretty much Immaculate condition, they guy who came done a real close inspection and tried to pick on everything - said the tire stuff that they use to replace the spare wheel was missing (Missing when I bought the car) and the front wheel was curbed and needed to be refurbished (This was done by the previous owner and I am very particular with my wheels it was slightest curb mark) Over they charged me over £160 extra as I couldn't prove that it wasn't me.

You should have challenged that more, I had the same issue when I VT’d a Toyota Auris. Was bought as an ex demonstrator, dealer wouldn’t repair alloy on purchase. When I handed it back they tried to charge for refurb. I said that as no condition report had been carried out by the finance company prior to purchase how could they confirm other wise. They accepted it and cancelled the bill.


Sent from my iPhone using Tapatalk

 

[HulkRS3]

Looking at my paperwork, my price for the vehicle at the time on the Audi website was 39,925. I went through carwow and my audi finance paperwork here says 'Amount of credit - 30,664. I put down a 5k deposit but it says that the total amount payable comprising the adv payment, amount of credit, acceptance fee, interest and option to purchase fee is 41,153. :|

 

[DrEskimo]

Looking at my paperwork, my price for the vehicle at the time on the Audi website was 39,925. I went through carwow and my audi finance paperwork here says 'Amount of credit - 30,664. I put down a 5k deposit but it says that the total amount payable comprising the adv payment, amount of credit, acceptance fee, interest and option to purchase fee is 41,153. :|

Ha...yea it was looking at the numbers like that which put me off new cars, and PCP in particular, for life

I take it you're looking at about 40months before VT is an option (I'm guessing it's on a 48month deal?)?
Although I'm sure you are enjoying it too much to be thinking about that right now