laserlad2010 Registered User
#1

My girlfriend can't afford her PCP contract any more. She is 18 months through a 36 month PCP contract on a 162 Mini One D, and wants to get rid of it.

The garage want her to pay €11,000 if she returns the car now. She's done a fair whack of mileage above her allowance which will hit her when/if she returns the car.

It's obvious that she should never have taken the contract, or been allowed to take the contract (salary not high enough, can't afford balloon payment), but that's a moot point.

Can she sell the car separately and pay the garage?

Has anyone any experience of returning a car halfway through PCP?

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happywithlife Registered User
#2

laserlad2010 said:
My girlfriend can't afford her PCP contract any more. She is 18 months through a 36 month PCP contract on a 162 Mini One D, and wants to get rid of it.

The garage want her to pay €11,000 if she returns the car now. She's done a fair whack of mileage above her allowance which will hit her when/if she returns the car.

It's obvious that she should never have taken the contract, or been allowed to take the contract (salary not high enough, can't afford balloon payment), but that's a moot point.

Can she sell the car separately and pay the garage?

Has anyone any experience of returning a car halfway through PCP?


Nobody forced her. She obviously thought it was idea at the time. It's a hard lesson learned. She can't sell the car as she doesn't own it as such. I assume her only options really are pay the 11k to buy her way out of the contract or look at her finances (really look at them) and see where she can cut back to make the repayments more affordable. Many young women I see make luxuries a priority but really they forget they are luxuries. I'd make a fair guess her grooming bills are quite high - does she get waxing done at a saloon for example? The best of make up? Hair always done every few weeks? There are ways to cut back there for example
I'd be slow to hand the car but still be paying back a loan or repayment plan for the 11k because imo if she's paying she may as well have the car. It's a hard lesson but I hope she learns from it

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road_high Registered User
#3

First instinct would be grin and bare it. How much per month is it?
11k is a lot to pay for having no car...may as well be paying the same money and having the pleasure of the car in my opinion. Without knowing the facts and figures.

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bazz26 Registered User
#4

This is really the worst situation when it comes to PCP - doing high mileage and having to hand the car back.

Her only option may be to sell the car back to the garage and take out a loan to pay off the difference between what the garage give you and the GFMV ~ €11,000. Talk to the likes of your credit union around taking out a loan for 11,000 with them over a longer term where the monthly repayments are more manageable for her. For example, paying €150 per month over 5 years might be more manageable than currently paying €300 per month for 3 years.

Selling the car privately when there is outstanding finance on it is tricky to say the least. Most buyers will shy away when they hear there is outstanding finance or do a history report on the car.

KFed Registered User
#5

Im not familiar with the mini one D so looked it up. Mini.ie have a 181 for 22k on the road with payments of 181/month.

Is that the car, 22k on the road brand new? If so, and hers is a 162, the dealer wants her to pay another 50% of the cost to hand back a car that she has already made 12-18 monthly payments on if it is c. 18 months old? She will then have paid in total 60% of the cost of the car but have only had 1.5-2years use???

The dealer can probably resell it for 70% of a new model, so she really needs to dig in and find a way to keep the car to get better value for herself.

I think the advice here about talking to the credit union is the best advice. The car at this age is surely worth much more than 50% of retail so financially the best bet is to find a new source of finance to buy the car out of the pcp deal and then have a longer term loan, e.g. 4-5 years and to have as low a monthly repayment as possible.

Even if she can get a credit union loan to buy the car now, that would be an unsecured personal loan. This means she would be free to sell the car at any point. She would almost certainly get a better deal than handing back the car and can use what she sells it for to repay the credit union loan.

Could you help her with the payments until the pcp term is up even and then use a cresit union loan to buy the car with a 3-5y loan term?

Id advise getting good advice. Yoy wont get that from the dealer or pcp finance house who are out for their own interest in the car and collecting the payments/balloon or taking the car back.

The state agency mabs, money advice and budgeting service, also offers help and advise on finances or askaboutmoney has some good advice and people often post with money makeover scenarios. You could post there also and may get good specific advice.

I am an accountant by profession and, without knowing specifics of you and girlfriend finances, if you can manage it youre likely to be best served by finding a way to keep the car and repay over a longer term, or, take a longer term loan and sell the car to clear as much of the loan as possible, leaving a smaller loan than the 11k more that the dealer wants after the car is gone...

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MarkN Registered User
#6

happywithlife said:
Nobody forced her. She obviously thought it was idea at the time. It's a hard lesson learned. She can't sell the car as she doesn't own it as such. I assume her only options really are pay the 11k to buy her way out of the contract or look at her finances (really look at them) and see where she can cut back to make the repayments more affordable. Many young women I see make luxuries a priority but really they forget they are luxuries. I'd make a fair guess her grooming bills are quite high - does she get waxing done at a saloon for example? The best of make up? Hair always done every few weeks? There are ways to cut back there for example
I'd be slow to hand the car but still be paying back a loan or repayment plan for the 11k because imo if she's paying she may as well have the car. It's a hard lesson but I hope she learns from it


Welcome to the patronising hour eh?! Ever find your circumstances in life have changed? No? Lucky you.

OP, all the bank want is their money. If you can sell that car for 15k and give the bank a cheque for 11k and keep the rest, happy days. The problem is someone giving you 15k while you then wait for it to clear and all the while not giving your cash doner the keys or the car as that would be extremely unwise! If the finance was with say BOI you could literally go into a branch with the buyer and lodge the money and be somewhat assured that the money is in your account. I did that with someone when selling a car but the car was mine.

Yes, it’s not technically yours to sell but as I said, they just want the settlement paid.

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Squeaksoutloud Registered User
#7

Would that half rule not apply here?

www.ccpc.ie/consumers/money/debt/problems-making-car-repayments/

Hire purchase contracts, which include PCP, allow you to end your contract and give back the car once you have paid half the hire purchase price – this is called the ‘half rule’. With PCP, a lot of the cost of the car is to be paid at the end of the agreement, so you may be close to the end of the contract by the time you have paid off half of the PCP cost. But ending your contract using the half rule may be an option.

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DaveyDave Registered User
#8

Is it not possible to have an arrangement with the dealer where the person buying the car makes the payment to the dealer?

MarkN Registered User
#9

Squeaksoutloud said:
Would that half rule not apple here?

www.ccpc.ie/consumers/money/debt/problems-making-car-repayments/

Hire purchase contracts, which include PCP, allow you to end your contract and give back the car once you have paid half the hire purchase price – this is called the ‘half rule’. With PCP, a lot of the cost of the car is to be paid at the end of the agreement, so you may be close to the end of the contract by the time you have paid off half of the PCP cost. But ending your contract using the half rule may be an option.


OP, check the paperwork of the agreement that she signed, the halfway would be in the terms and conditions if applicable.

DaveyDave said:
Is it not possible to have an arrangement with the dealer where the person buying the car makes the payment to the dealer?


Another good suggestion. I had a good relationship with a dealer and needed a car gone ASAP, they wrote me a cheque for what I needed, they could sell the car for whatever they wanted then.

happywithlife Registered User
#10

MarkN said:
Welcome to the patronising hour eh?! Ever find your circumstances in life have changed? .


I emboldened the bit about the gf shouldn't have been allowed to take out the contract. That grates on my nerves as she wasn't forced to. It's typical attitude of a certain generation where they want everything and want it now. There is such a thing as personal responsibility.
I am not lucky. I have been in tough s****y financial circumstances . My husband was in a similar situation but with a HP agreement he decided on a whim to hand back the car without realising he was liable for a minimum payment. He - we as a couple- had to pay without having the use of a car which is why I urged the op to look at making cutbacks to try and hold onto the car

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MarkN Registered User
#11

happywithlife said:
I emboldened the bit about the gf shouldn't have been allowed to take out the contract. That grates on my nerves as she wasn't forced to. It's typical attitude of a certain generation where they want everything and want it now. There is such a thing as personal responsibility.
I am not lucky. I have been in tough s****y financial circumstances . My husband was in a similar situation but with a HP agreement he decided on a whim to hand back the car without realising he was liable for a minimum payment. He - we as a couple- had to pay without having the use of a car which is why I urged the op to look at making cutbacks to try and hold onto the car


Sorry to hear you’ve had difficulty but you’re assuming an awful lot about a stranger in your previous post all the same.

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listermint Registered User
#12

MarkN said:
Sorry to hear you’ve had difficulty but you’re assuming an awful lot about a stranger in your previous post all the same.


Sage advice, actually better than yours which amounts to trying to sell a car with finance owed on it...

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retalivity Registered User
#13

Isnt one of the options at the end of a pcp contract to just hand the keys back, instead of a final balloon payment? Im in a pcp agreement, 3 yrs up end of march. Options available to me are
1) final lump sum payment 2) structure final payment over 2 yrs 3) use gfmv (or better) as a deposit towards a 181 and a new pcp contract. Or 4) hand back the keys and walk away with no car.
So sticking it out for another 18mths would mean handing it back for nothing instead of handing it back for an 11k penalty now? Is that an option here?

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MarkN Registered User
#14

listermint said:
Sage advice, actually better than yours which amounts to trying to sell a car with finance owed on it...


I’m all ears for how you advise €11,000 disappears into a hole..... have you experience of settling with a finance company early?

laserlad2010 Registered User
#15

Thanks for all of the responses. I particularly enjoyed the keyboard warrior assumption that my girlfriend was blowing her entire salary on "grooming" and then struggling to pay back her PCP. It's the other way around really. I say "shouldn't have been allowed" because she clearly can't finance a brand new car if you look at her salary - no way would she have afforded the balloon payment, and the dealership performed all sorts of wizardry to cut down the deposit required as she didn't have that money either. I wasn't with her at the time as I would have stopped her.

The reality is that whilst she can afford the monthly payments, on top of rent it's quite a chunk of her monthly take home pay, and the problem is that she's racking up high mileage commuting to and from work and is terrified something will happen to the car as she's no money to afford replacing stuff. She's also facing a hefty mileage bill in another 18 months.

It's quite stressful for her and I don't see a way out. My finances don't need examining in this situation as I'm not sure how many lads out there would take on a PCP repayment scheme, or offer to pay 11 grand for their girlfriends car - although I'm close to offering to get rid of my own car and just contribute towards the cost of her repayments.

It seems the best way is to just see out the contract and then get a much cheaper runaround car she can afford to maintain.

Let me know if there are any other options.

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