Hi Guys

 

Hoping that someone can lend a hand with this one...

 

I recently (month and a half ago) ended up with a company car that ill also be using for all my private miles and a such no longer have any need for my Fiesta.... The finance agreement was the regular PCP ford credit one with a small deposit.

 

Now as i am almost half way through my term I was under the impression I could call them up and simply ask for VT (nice and easy) however when I've spoken to them they have advised that I need to pay them 3,200.... Really?

 

Current market value is around 9,500 - 10,000 for a 15 plate titantum 5 door with citypack and ecoboost engine and Ford Credit have said I can buy the car for 9,600 so how on earth do they think I would owe them almost 4grand?

 

Help! :)

Thanks!

You signed when you took the car a legally binding contract,  check your terms and conditions.  If you're pulling out early the onus is on you to pay a preset fee

As stated check your terms and conditions.I had a Clio on PCP with renault finance a few years back and VT'd halfway through as the car was absolute garbage.Nothing to pay as that PCP contract said you can VT midway however it can apparently effect your credit score,not that i noticed.

Yes it will affect your credit score.

It is better to find a dealer who will buy it off you and settle the finance if you can.

I did this a few years ago.  You have to be over the half way point.  One day before it and you'll have a full settlement figure to pay. You said your nearly at the half way point then you'd need to wait till then to be able to hand it back.  They put a (VT) next on your credit file.  This shouldn't, and possible won't affect your credit rating though if you went for a new car anytime soon it could affect the decision.

On 7/30/2016 at 3:58 PM, ayrshiredude said:

I did this a few years ago.  You have to be over the half way point.  One day before it and you'll have a full settlement figure to pay. You said your nearly at the half way point then you'd need to wait till then to be able to hand it back.  They put a (VT) next on your credit file.  This shouldn't, and possible won't affect your credit rating though if you went for a new car anytime soon it could affect the decision.

Hi Pal 

 

Thanks for the response, I thought that would be the case.

How much did you have to pay in the end?

From what I've read they keep it on their file however effecting my credit score shouldn't be an issue, its pretty high and I already have mortgage ect

Big thing for me is that now im in company cars I'm pretty unlikely to buy another car now

 

Thanks 

It won't effect your credit score at all, as in your actual credit score number won't fall due to vt'ing the car finance agreement, however as mentioned they do place a mark on your file next to the loan to say that you exercised your right to terminate it which other future lenders will be able to see. However as you say you won't be getting another car on finance any time soon so that won't affect you as I'd imagine only car finance companies would look at the vt and use it in their decision making process, other lenders such as mobile phone companies, bank loans etc presumably wouldn't care due to the fact you couldn't vt their agreements. 

As for the vt itself it doesn't go on the half way point in time its halfway in terms of the loan being repaid. If you are on a pcp (presumably 3 years) that doesn't mean you can vt after a year and a half. For example if the loan for the value of the car + interest was 10k you would have to of repaid 5k (half the value) before you are able to vt the agreement. 

Bare in mind that pcp payments are essentially you only paying the cost of depreciation of the car and therefore you're paying less off of the car than if you bought the same car on hire purchase. The £3,500 you have been quoted will be the amount you need to pay to get your loan down to the half way value to enable you to vt the agreement. On my last pcp if I were to carry on making my payments I would of only been able to vt 2 months prior to the pcp expiring which lead me to sell the car to a dealer and carry the negative equity over into a hire purchase agreement.