We are in 24 months of a 3 year contract but we need a bigger car. What is the right way of handing the keys back?.

With most pcp's if you've paid half or more towards your finance you can give it back no questions asked, I think it's called voluntary termination. It'll all be on your paperwork that you signed when taking the car out. What vehicle is it? 

It's a Citigo.

I'm in the same boat, I think looking at mine I will be able to hand back around October which will be ~29 months of a 36 month deal

Rang up Skoda finance and I need to pay £700 to terminate contract or wait till December to get to half of the price. It take 4 weeks for car auction people to take it away.

So you have to pay 30 months out of 36???    (36 + final payment I guess)

Looks like it.

Case for mis-sold finance?

 

You aren't the first on here who thought the half way point for a free exit was 18 months in to a 36 month contract.

When the lady told me what I owned £6500 I knew it wasn't going to be the case of just handing I back.

Are you sure it's a PCP and not a PCH?

 

Edit: My PCP had three options at the end:

1. Hand the car back and be given a generous amount of deposit toward a new car (from the same dealer)
2. Hand the car back and be given the difference between the guaranteed future value (agreed at the beginning of the deal) and the amount the car is actually worth. Often this works out to be the other way around, and you end up having to pay to get rid of a car you don't want anymore especially if there's any damage etc.
3. Pay the buy-out amount and keep the car (this obviously goes down the further you get into the contract, and the total amount paid doesn't normally stray too far from what you'd pay in total on normal finance - the only difference with PCP is that there's that huge chunk of money deferred until the end to keep your monthly payments low)

 

I had a Renault Megane on a PCP from Renault Retail, which was a 4 year deal supposed to last until January 2019...

The car was actually pretty good but I wanted something a bit bigger & more refined etc, after seeing the quality of the Mrs' new A3 we took delivery of in October.

 

In February this year the amount owed for buying out of the PCP was £5150. Simpsons Skoda paid this for me, and took my Renault off me which basically balanced the book.

This meant I had no trade-in value left as a deposit, so I paid the full £25-and-a-bit-K for my ex-Skoda mgmt Superb L&K

 

If I couldn't afford to buy my Superb in cash I'd have bought a cheaper car on finance. The PCP caused me a great deal of stress and confusion, never again.

Edited 4 July, 20178 yr by drewellis

Yeah it was a PCP. Went to drive a Mitsubishi ASX and we have bought it. 

9 hours ago, drewellis said:

Are you sure it's a PCP and not a PCH?

 

Edit: My PCP had three options at the end:

1. Hand the car back and be given a generous amount of deposit toward a new car (from the same dealer)
2. Hand the car back and be given the difference between the guaranteed future value (agreed at the beginning of the deal) and the amount the car is actually worth. Often this works out to be the other way around, and you end up having to pay to get rid of a car you don't want anymore especially if there's any damage etc.
3. Pay the buy-out amount and keep the car (this obviously goes down the further you get into the contract, and the total amount paid doesn't normally stray too far from what you'd pay in total on normal finance - the only difference with PCP is that there's that huge chunk of money deferred until the end to keep your monthly payments low)

 

I had a Renault Megane on a PCP from Renault Retail, which was a 4 year deal supposed to last until January 2019...

The car was actually pretty good but I wanted something a bit bigger & more refined etc, after seeing the quality of the Mrs' new A3 we took delivery of in October.

 

In February this year the amount owed for buying out of the PCP was £5150. Simpsons Skoda paid this for me, and took my Renault off me which basically balanced the book.

This meant I had no trade-in value left as a deposit, so I paid the full £25-and-a-bit-K for my ex-Skoda mgmt Superb L&K

 

If I couldn't afford to buy my Superb in cash I'd have bought a cheaper car on finance. The PCP caused me a great deal of stress and confusion, never again.

 

If you run the PCP deal to the end and hand the car back provided you haven't exceeded the mileage limit and the car is in appropriate condition you won't have anything to pay if it's worth less than the finance remaining. That's the advantage of PCP really. Protects you from any negative equity at the end of the term. 

 

People get annoyed and frustrated however when they take out a 4 year deal (often with minimal deposit) and expect to be able to change early after a year or two. The neg equity is often then a big surprise. 

 

Sadly with your Renault deal you have still ended up paying that £5k neg equity, albeit not directly. The dealer will have taken the car and paid the finance off but with the other hand reduced the amount of available discount on the Superb you might have had. In effect you end up paying £5k over the odds for the Skoda. 

 

People can get into a cycle of doing this on PCP, rolling negative equity on from one deal to the next, deepening their plight. 

4 minutes ago, Furbytom said:

 

If you run the PCP deal to the end and hand the car back provided you haven't exceeded the mileage limit and the car is in appropriate condition you won't have anything to pay if it's worth less than the finance remaining. That's the advantage of PCP really. Protects you from any negative equity at the end of the term. 

 

People get annoyed and frustrated however when they take out a 4 year deal (often with minimal deposit) and expect to be able to change early after a year or two. The neg equity is often then a big surprise. 

 

Sadly with your Renault deal you have still ended up paying that £5k neg equity, albeit not directly. The dealer will have taken the car and paid the finance off but with the other hand reduced the amount of available discount on the Superb you might have had. In effect you end up paying £5k over the odds for the Skoda. 

 

People can get into a cycle of doing this on PCP, rolling negative equity on from one deal to the next, deepening their plight. 

I understand what you mean, it wasn't too bad in my case because I had put a 5k deposit down (my old car) on the PCP initially, due to my circumstances I needed low monthly payments. 

 

Regardless of the Skoda, I didn't really have to pay anything to get rid of the Renault - I could have handed it back to Renault Retail early for nothing. It was just more convenient for me to get Skoda to incorporate that into the purchase of my new car so I didn't have to deal with 2 dealerships

5 minutes ago, drewellis said:

I understand what you mean, it wasn't too bad in my case because I had put a 5k deposit down (my old car) on the PCP initially, due to my circumstances I needed low monthly payments. 

 

Regardless of the Skoda, I didn't really have to pay anything to get rid of the Renault - I could have handed it back to Renault Retail early for nothing. It was just more convenient for me to get Skoda to incorporate that into the purchase of my new car so I didn't have to deal with 2 dealerships

Ah I see, so you weren't in £5k of negative equity? 

It was just the settlement figure for the Renault was £5k? 

17 minutes ago, Furbytom said:

Ah I see, so you weren't in £5k of negative equity? 

It was just the settlement figure for the Renault was £5k? 

That's right yes sorry if I explained it really badly 

I ended my PCP on my Polo after 24 months of 36 months. It all depends on what your deposit and monthly repayments are and what is due before your completion date. Given VAG Finance a ring and ask how much you owe if you wish to pull out of your PCP? I have gone back to a traditional loan as the PCP allowed me to save up another deposit but I didn't really like the PCP

On 04/07/2017 at 18:39, Furbytom said:

 

That's the advantage of PCP really. Protects you from any negative equity at the end of the term.  

 

The word 'protect' should be taken loosely, the protection is built into the deposit, monthlies and balloon payment. You are still paying the 'negative equity' but instead of paying it all at the end it is spread over the total price paid.

 

When sizing up a PCP, PCH (lease) or outright purchase (cash / bank loan) it really pays to do the sums first to work out what is best for you.

 

PCP - more flexible but can be expensive (low deposits and monthly payments are used to lure you in, with the negative equity used to persuade you into signing up for another deal).

 

PCH - some great deals around but no option to exit early. If you want out then you have to pay the full amount, even if only a few months in. Can be very risky if you are made redundant etc. It's good to ensure the full amount is already in the bank.

 

Purchase - cheap interest rates from the high street banks or 0% APR from the garage make the old fashioned way of buying a car still attractive, a good measure of affordability, if you can't afford the monthly loan repayments then you can't afford the car.

2 hours ago, silver1011 said:

 

The word 'protect' should be taken loosely, the protection is built into the deposit, monthlies and balloon payment. You are still paying the 'negative equity' but instead of paying it all at the end it is spread over the total price paid.

 

 

 

I guess what I mean by "protect" is that you are covered by a minimum guaranteed value at the end of the term. Should the market value of your car be hit badly during your time with it and it ends up being worth less than the amount owing you can obviously return the car and leave the manufacturer to swallow the loss.