Hi all, I've had my Citigo for nearly 2 years now- contract is 42 months. I've got a 3 door sport and have just had a little one so something larger/with 5 doors is needed.

 

I'm trying to work out the earliest possible time I can hand the car back without having to pay thousands to settle my agreement.

 

How would I go about working it out? I know how much I've paid off, know the current amount needed to settle but I assume there is a value of the car in there somewhere that is added to what I've paid to work out what is left? The minimum future value doesn't come into yet does it?

 

Thanks for any help

 

Sam

Basically I "think" you would just have to pay off the difference between the p/x value and the settlement figure.

For instance, I am p/x-ing my sport in March which have a p/x value of £4500, my settlement is £5100. In my case the dealers I'm dealing with is covering the difference!

So I think it would be the same for you?!

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A lot of the time the dealer will make up the difference between the p/x value and the settlement. You may have to find a couple of hundred quid just as a token deposit.

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From my understanding you can give the car back with nothing else to pay half way through your deal

 

48 month deal give it back after 24 months and walk away.

 

 

You can then take out another deal as it doesnt affect your credit rating

Edited 9 February, 201610 yr by Auric Goldfinger

On a pcp it's when you have paid half of the total balance off. If you paid say 10k for you sport it's when you have paid a total of 5k( including your deposit) if you look on the first page of the finance agreement it should say something about right to terminate and it will tell you how much you have to have paid. On a pcp it's usually about 2/3 of the way through.

On a pcp it's when you have paid half of the total balance off. If you paid say 10k for you sport it's when you have paid a total of 5k( including your deposit) if you look on the first page of the finance agreement it should say something about right to terminate and it will tell you how much you have to have paid. On a pcp it's usually about 2/3 of the way through.

 

Half of the Balance owing, not including the GFV, therefor if it's  a  48 month deal you can give the car back after 24 months

The half you have to payback includes the mgfv.

Edited 9 February, 201610 yr by Markyg

If you don't believe me look at the first page of your finance agreement.

Yes the above is right. Including your deposit and payments made, your half way point is listed on your PCP agreement. After that it's super easy to sort it out and if you are in doubt, simply ring the finance company. If you have reach the trigger point, all you do is say you want to hand it back, they ask you when is convenient and a transporter lorry turns up and takes your car away. The only thing is the driver will do a quick inspection of your vehicle and go through any defects he finds (this covers you in case he hits a tree with your car on top of his transporter etc  ). You are allowed a couple of paint chips and perhaps a very small scratch, the odd small mark to an alloy is ok too. But if the car has dents or other real damage, then you will be charged for this. 

 

I handed my Toledo back to VW finance and it was really easy, it also doesn't affect your credit rating, which was good as I bought another VW product immediately afterwards using VW finance It is one of the good points of the PCP agreement, as it is a form of HP and has all the consumer protection rights that this confers

Btw, you can't necessarily hand the car back just based on half the number of monthly payments. it depends on the GFV, how big your deposit was, what the interest rate is and stuff like that. You should be close to the halfway point at 24 months into a 42 month deal though, although you may have a few months to go yet, it just depends on things like the earlier mentioned stuff

                     . Technically the gfv is half of the balance.

I don't mean to sound argumentative, but it isn't the case. If it was half the balance the GFV would change depending on how big your deposit was, but in reality is doesn't. It a figure that the manufacturers guess the car will be worth as a trade in minimum (or at least the minimum value to themselves). Your annual mileage has the biggest effect on the GFV, just try playing with the online configurator's to see how much it can change.

Edited 9 February, 201610 yr by Lady Elanore

Glad you brought that up ^^^^

I was just about to jump in and say it depends on total cost of car/deposit/repayments and interest rate if applicable.

It is 50% monetary wise if you took a £99 deposit and £99 a month 50% could well be around 2/3rds in.

If your Citigo was £11k and you put down £500 deposit and had a GFV set at £4k then you had £6.5k on finance @ 0% apr you need to pay off at least £3,250 to hit 50% mark, is how I understood it but as said it should be there on the finance agreement.

Edited 9 February, 201610 yr by Defenderben

Sorry I poorly worded that. I meant the gfv is included in half of the balance if you know what I mean. I tried multitasking and failed.

One question about the gfv. My fil bought a tiguan on a pcp and put a 6k deposit down. Vwfs tweaked the gfv from 12k to 6k. They said the can normally alter it down to whatever the customer wants??

I'm 30 months in a 42 month pcp and I can vt my agreement in 2 months time. I put a grand down on my citigo at 0%. It's worth about 4k already and my gfv is 3850!

Glad you brought that up ^^^^

I was just about to jump in and say it depends on total cost of car/deposit/repayments and interest rate if applicable.

It is 50% monetary wise if you took a £99 deposit and £99 a month 50% could well be around 2/3rds in.

If your Citigo was £11k and you put down £500 deposit and had a GFV set at £4k then you had £6.5k on finance @ 0% apr you need to pay off at least £3,250 to hit 50% mark, is how I understood it but as said it should be there on the finance agreement.

You have to pay half of the total amount owed (as written on your agreement) this includes the GFV unfortunately :(

Sorry I poorly worded that. I meant the gfv is included in half of the balance if you know what I mean. I tried multitasking and failed.

One question about the gfv. My fil bought a tiguan on a pcp and put a 6k deposit down. Vwfs tweaked the gfv from 12k to 6k. They said the can normally alter it down to whatever the customer wants??

I have never seen that done by normal means (you can easily alter the GFV down by upping the alleged mileage) but you will only have to make much bigger monthly payments if you do that and the interest saved would be relatively small. GFVs are usually somewhere in the 35-40% sort of region

The 50% point is worked out as Deposit+fees+all the monthly payments+the GFV (GMFV as it's sometimes known) dived by 2.

 

The way the interest is worked on the remaing amount is a mystery to me and you probably need their clever calculators to prodice the accurate numbers, but I suspect the finance company make a litte bit on the early surrended VT which will help offset the fact that a finance house now owns a car they don't want

This might help

 

 

Clever person explaining properly how it all works

Btw and a final post on the matter, if have reached the 50% VT point, it's worth checking out if a dealer would like to buy your car for stock. If you have a nice car that a dealer would like, it may be worth more than the remaining balance of what you owe (including the GFV figure don't forget) and if it is more, congratulations, you now have equity in your car. The dealer will inform you of how much he will give you to buy your treasured classic and don't forget you can haggle him to pay more too you then deduct how much you owe (the finance company will tell you the settlement figure before you visit the dealer) and the dealer can then (also having checked the settlement figure give you a cheque for the difference

 

This is a key difference in the 'getting rid of my car' methods.

 

1. Voluntary Termination at the 50% point you walk away and get nothing. This works well if your car is worth less than you owe (you own a lemon), but you have hit the 50% trigger point
2. You sell the car yourself. Firstly get the settlement figure, as this will have the bonus of saving you some of the interest still owed-just like early settlement of a bank loan-thus improving your chances of making a little something Then, if selling privately, settle the amount before you sell the car-legally you have to. Or if you go to a dealer and say "I have this lovely car, would you like to buy it for stock?" then the dealer will pay the settlement figure off for you and give you the difference-this only works if your car is actually worth more than the settlement figure of course. If you have a car that everybody hates then it won't work, But if you have the rare Skoda Unicorn Fairy Dust model that is sought after, then you are quids in

I have never seen that done by normal means (you can easily alter the GFV down by upping the alleged mileage) but you will only have to make much bigger monthly payments if you do that and the interest saved would be relatively small. GFVs are usually somewhere in the 35-40% sort of region

The original deal was 400 down and 450 a month with a 12k gfv. He put 6 k down so the gfv was 6k (he paid the 6k in the end and bought it).

In the case of citigos they have depreciated so heavily we will never be able to sell them on anytime soon. Our local vw dealer says all the ups on pcps have been handed back ad they've been averaging 1k under the gfv!

The GFV is usually a relatively static number worked out by the bean counters back at the finance house, with rules that modify this figure such as mileage, length of contract types of options (which vary vastly in their effect on the GFV). Altering the deposit doesn't usually alter the GFV. It sounds like they tweaked something else to bring the GFV down -my guess is mileage. I'm curious as to why he wanted to do that in the first place though. The only benefit I can see is the slight saving on interest. You could argue had he invested the bulk of his 6K deposit at the start of the agreement he could have made some interest that way and also had the benefit of a large emergency lump for unknown happenings.

The original deal was 400 down and 450 a month with a 12k gfv. He put 6 k down so the gfv was 6k (he paid the 6k in the end and bought it).

In the case of citigos they have depreciated so heavily we will never be able to sell them on anytime soon. Our local vw dealer says all the ups on pcps have been handed back ad they've been averaging 1k under the gfv!

That's one very good reason not to try and adjust the GFV. If they didn't fiddle with the mileage to deflate the GFV artificially, I am surprised that VW finance let them half the GFV. if they are using an alternative source of finance, say something like Black Horse, they may have some leeway to adjust the numbers because a PCP is just an HP agreement dressed up in fancy clothes, but it seems odd and counter intuitive to allow a dealer to half the GFV if the finance company is VW in this case.

The finance company was vw. They may have seriously upped the mileage I'm not sure about that.

I think he did it this way so if he didn't buy the car he'd have the best part of 6k to put down as a deposit on another one.

This might help

 

 

Clever person explaining properly how it all works

 

Thanks for a very useful post, I'll probably use real money to pay for the next car!

 

DC

The only thing I'd query with that article is that it says finance companies won't deal with you if you vt. Well a work colleague has vtd has last 4 cars including his last 3 from vw and they still gave him finance on the 4th??