VT-ing a PCP - the ball is rolling. My experience.....

[TheWanderer]

http://www.autoexpress.co.uk/car-news/96744/warning-over-hidden-risk-of-exiting-car-finance

[SkodaVRS1963]

I wouldn't take that as a valid reason for them doing some actual work, as I made a card payment for mine. This is the email they sent when I chased it up.

 

That's shocking :no:

[SurreyJohn]

So although VT is permitted under sections 99 and 100 of the 1974 law, it leads to a flag on your credit file.

But lenders clearly see the borrower as higher risk so a future loan or mortgage could need a higher deposit or attract a higher interest rate. Personally I wouldn't do it until you have bought and fitted out your home for retirement, what's the point of saving few hundred pounds but paying thousands more for home improvements and mortgage.

[SkodaVRS1963]

So although VT is permitted under sections 99 and 100 of the 1974 law, it leads to a flag on your credit file.

But lenders clearly see the borrower as higher risk so a future loan or mortgage could need a higher deposit or attract a higher interest rate. Personally I wouldn't do it until you have bought and fitted out your home for retirement, what's the point of saving few hundred pounds but paying thousands more for home improvements and mortgage.

 

I see the opposite?  If I'm a lender, someone has VT'd an agreement and I make the assumption that he/she is having financial difficulties, surely it demonstrates that he/she has shown financial responsibility (i.e reduce outgoings, the first rule of debt management) rather than just waiting until the time comes when the vehicle gets repossessed for payment defaults?

[Minimoke]

Or alternatively the finance company could think "...another customer who has deliberately lied about their expected mileage at the commencement of the agreement, racked up a starship mileage, and then avoided the excess mileage by VT'ing."

 

The VT flag on the credit file will only show whether the agreement was paid up at the time of VT - it would be unusual if it were not paid up else the VT could be rejected. However this might conceivably occur after the 50% threshold has been reached. But normally you have to be up to date to VT, payment difficulties or not.

 

There are no reasons held on file to indicate why the VT has ocurred.

 

So the finance company is therefore entitled to view it as prima facie evidence that the customer has experienced financial dicfficulties and proceed with the application accordingly. 

Edited 21 August, 2016 by Minimoke

[JKW]

Why then, would Skoda Finance support my new Skoda car acquisition when the current Skoda is being VT'd with them ? Surely if they had any doubts over my suitability to pay, or found any other reason to penalise my application, they'd have done so.

 

The fact the new car finance has been fully approved, without any extra deposit or percentage hikes required, indicates to me that a first time VT is perfectly normal, & acceptable to Skoda Finance, & therefore should not impact upon my credit score.

 

With me having a 5/5 score now, I'll certainly notice if it changes, & will report back - I have no loans or mortgage so any change will only be because of the VT.

I'll await the outcome with "interest" (pun intended !).

JKW 

[octavianestate]

Reading this post with interest as im planning to VT my octavia once I reach the point in which I am able too.

I figured my octavia is jinxed as well as being a lemon after all the issues I have had since new and to add insult to injury the offside rear bumper has been scraped by some considerate driver who couldn't wait around to own up.

So the car has to go. Once the car has left my care I will reveal it's details so anyone wishing to buy the very low milage factory order estate can choose to avoid this absolute lemon, or indeed buy it if your crazy :-D

[Minimoke]

Why then, would Skoda Finance support my new Skoda car acquisition when the current Skoda is being VT'd with them ? Surely if they had any doubts over my suitability to pay, or found any other reason to penalise my application, they'd have done so.

 

The fact the new car finance has been fully approved, without any extra deposit or percentage hikes required, indicates to me that a first time VT is perfectly normal, & acceptable to Skoda Finance, & therefore should not impact upon my credit score.

 

With me having a 5/5 score now, I'll certainly notice if it changes, & will report back - I have no loans or mortgage so any change will only be because of the VT.

I'll await the outcome with "interest" (pun intended !).

JKW 

 

Because as I said, every finance company uses their own criteria when assessing the granting of credit. Normally the criteria is reviewed on a regular basis through a committee dedicated to the purpose.

 

A credit score is only one part of the overall criteria. Other obvious indicators are age, occupation, post code, marital status, frequency of change of address and so on. The list can be quite long.

 

A VT can (and in some cases already is) be one of those indicators. The point is your score will NOT change if you VT but it will be held on file for 6 years. I think you need to ask yourself why it is being recorded if you think it does not matter to every finance company.

 

I can guarantee you that credit assessment criteria WILL be assessed from time to time by every finance company, and they may decide at some future point to lend greater weight to VT data even if they do not do so now. If that be the case, and there is a VT on the record, then credit may be refused at some stage in the next 6 years.

 

Frankly I don't care whether anybody VT's or not.  It's their right, but they have to make their own informed decision. All I was trying to do was point out that VT may not turn out to be the risk free choice some people on this forum are blithely assuming. That is why I made the comment in an earlier post about Russian Roulette.

Edited 21 August, 2016 by Minimoke

[SkodaVRS1963]

Just an update; nothing much to add except to say VWF Customer Services emailed me back to confirm that my VT request was indeed actioned on my previous call......that's the good bit.  They went onto say they would request the shortfall between my payments to date and the 50% figure when the vehicle was collected.  Somewhat worrying seeing as I made the shortfall payment (and it has left my bank account) during the aforesaid call.

 

Today I received a letter confirming the above (bog-standard letter identical to one posted elsewhere on this forum) but also stating the shortfall was outstanding.

 

One hopes that these are template emails and letters and that VWFS don't start playing silly devils with my credit rating.

 

No call from BCA as yet but it's only been six days.

[JKW]

Got all the documentation today from Skoda Finance, detailing all re the VT procedure, which is both accurate & clearly laid out.

BCA still haven't contacted me, but no worries, Skoda have informed them to do so, my current car will be stored securely with the dealership where I'll be collecting the new one, & I'm totally confident there'll be no hidden surprise bills after the BCA inspection !

It seems it's all systems "go", & so far so very good  :sun:

JKW

[GoneToBeemer]

I fully intend to get my next car (ordering in the next few weeks) on a 6k mile PCP, run the mileage up and just VT at the end! Why not when the clause is there!

[Dodgy]

Pride, integrity? /shrug

[bouff34]

Pride, integrity? /shrug

 

Pride and integrity aren't generally attributes that one would associate with finance companies on the whole...and I'm not sure they really fit with VAG either given the recent publicity over emissions etc...

 

It is written into the finance contract that you signed and Skoda signed - you can hand it back after 50 % paid. I don't think this should have any impact on your pride or integrity... Yes, if you simply default and the bailiffs come and repossess your car but not in this situation. You are merely exercising one of the clauses in your legal contract.

[GoneToBeemer]

Pride, integrity? /shrug

I'm not the first, and certainly won't be the last!

[andyvee]

Got all the documentation today from Skoda Finance, detailing all re the VT procedure, which is both accurate & clearly laid out.

BCA still haven't contacted me, but no worries, Skoda have informed them to do so, my current car will be stored securely with the dealership where I'll be collecting the new one, & I'm totally confident there'll be no hidden surprise bills after the BCA inspection !

It seems it's all systems "go", & so far so very good  :sun:

JKW

If they haven't inspected it before you hand it back it is their problem, they have had plenty of chance to do so.

[SkodaVRS1963]

Update: received the call today from BCA, they're collecting the VRS on 6th September.  They have given me a "passcode" that the agent will quote when he arrives so that I don't let some random stranger drive the car off into the sunset.

 

So from initial notification that I wished to VT (17th August) to collection is three weeks.

[sdenny]

I'm not the first, and certainly won't be the last!

Just because you _can_ do something doesn't mean you should

 

However, each to their own as they say 

[SkodaVRS1963]

Just because you _can_ do something doesn't mean you should

 

However, each to their own as they say 

 

I would imagine that if the process was being abused regularly, a simple clause in the finance agreement would cover it.

 

Something along the lines of "appropriate charges per mile will be made in the event of the agreed mileage being exceeded even if this agreement is terminated voluntarily".

 

To be honest, it doesn't seem fair if a taxi driver leases a car, claims he's only going to drive 5,000 miles per year and then racks up 100k before VT-ing.

[Minimoke]

I would imagine that if the process was being abused regularly, a simple clause in the finance agreement would cover it.

Something along the lines of "appropriate charges per mile will be made in the event of the agreed mileage being exceeded even if this agreement is terminated voluntarily".

To be honest, it doesn't seem fair if a taxi driver leases a car, claims he's only going to drive 5,000 miles per year and then racks up 100k before VT-ing.

1. You cannot modify statutory provisions through contract terms.

2. Racking up mileage. It happens all the time. Thats one reason why the rest of us have to pay interest charges that are higher than they need to be.

3. Just consulted on VT statistics. According to the finance companies 80 to 90% of VT's are believed to have nothing to do with debt relief.

Edited 25 August, 2016 by Minimoke

[Dodgy]

I'm not the first, and certainly won't be the last!

 

Ah yes, the "but everyone else is doing it" defence.

 

Whatever. As you were!

[SkodaVRS1963]

3. Just consulted on VT statistics. According to the finance companies 80 to 90% of VT's are believed to have nothing to do with debt relief.

 

Yeah, I'm in there.

 

Just happened to get a stupid deal on a fully loaded ST3 as long as I registered it on a 16-plate instead of waiting for a 66-plate (I guess dealers bonuses are heavily stacked in February and August).

 

I don't have a mortgage, I have a very well-paid job plus a pension from my previous employer, I could afford four times the £200 my Ford is going to cost me every month........I'm going to be very miffed if VT-ing my VRS results in a negative on my rating.

[Orville]

I will have no qualms whatsover VT'ing my VRS at the instant I reach the 50% mark. Wife hates the car and Skoda have treated us like **** whilst pursuing a defective-clutch claim which they didn't want to cover under warranty. VAG are far from the epiphany of moral corperate behemoths themselves.

Edited 26 August, 2016 by Orville

[GoneToBeemer]

^^^^ Exactly.

People shouldn't be so quick to judge and comment.

[Dodgy]

I fully intend to get my next car (ordering in the next few weeks) on a 6k mile PCP, run the mileage up and just VT at the end! Why not when the clause is there!

 

That ^^^ 

 

I will have no qualms whatsover VT'ing my VRS at the instant I reach the 50% mark. Wife hates the car and Skoda have treated us like **** whilst pursuing a defective-clutch claim which they didn't want to cover under warranty. VAG are far from the epiphany of moral corperate behemoths themselves.

 

Is VERY different to that ^^^

 

In case you can't work it out vtec to vrs!, one is premeditated, the other is reactionary.

Edited 26 August, 2016 by Dodgy

[SkodaVRS1963]

I will have no qualms whatsover VT'ing my VRS at the instant I reach the 50% mark. Wife hates the car and Skoda have treated us like **** whilst pursuing a defective-clutch claim which they didn't want to cover under warranty. VAG are far from the epiphany of moral corperate behemoths themselves.

 

You can always do what I did; bail out 3 months early.

 

I got hit with a £600 "this is what you need to pay to hit 50% and VT" payment but the deal I was getting from Ford made it worthwhile.  (And I got 39.8mpg driving back from Norwich to Bath in a 250bhp petrol compared to the 43mpg I was getting in my VRS diesel......I suspect the Focus ST is going to be a lot more fun).

 

If your experience with Skoda is that bad it might be a worthwhile consideration?

Edited 26 August, 2016 by SkodaVRS1963