Breaking PCP contract

Gael23

My sister is a year into a PCP and has now got a job with a company car. Is it possible to break a PCP when circumstances unexpectedly change?

Bogwoppit

Gael23 wrote: »

My sister is a year into a PCP and has now got a job with a company car. Is it possible to break a PCP when circumstances unexpectedly change?

I paid mine off early with no penalty, was with VW.
That was clearing the balance and taking ownership of the car.
I’d say there are likely to be some hurdles if she just wants to hand it back.

is_that_so

Gael23 wrote: »

My sister is a year into a PCP and has now got a job with a company car. Is it possible to break a PCP when circumstances unexpectedly change?

Check the terms and conditions and talk to car dealer. At best she may get a credit rating hit.

eeloe

Bogwoppit wrote: »

I paid mine off early with no penalty, was with VW.

By the sounds of it they want to stop paying and give the car back.

Once you have 50% of the term completed you can cease the contact without penalty. At least my old PCP was like that.

Gael23

eeloe wrote: »

By the sounds of it they want to stop paying and give the car back.

Once you have 50% of the term completed you can cease the contact without penalty. At least my old PCP was like that.

Yes car is no longer needed

bazz26

First of all contact the finance company and get a settlement figure. Then talk to the dealer she bought it from. They may buy it back covering the balloon payment and any early exit PCP penalties that the finance company may apply. The dealer won't give her the true value of the car but it may allow her to settle the finance and walk away without it costing her money.

Lantus

If she has owned for 3 years then she can hand back. Before that she may be able to pay off remainder subject to equity which currently may be little to none. Talk to dealer.

Word of warning that if she no longer has her own insurance she will lose her ncb and will revert to a new driver again.

Gael23

She has it for about a year so probably not a huge amount of equity

bazz26

She will only lose her NCB after 2 years from the last date she was insured in her own name. If she has a spouse and they have another car then just rotate the main policy on that car between herself and her spouse every year to keep her NCB intact.

Lantus

Gael23 wrote: »

She has it for about a year so probably not a huge amount of equity

What car is it. At one year depreciation curve is steepest. Payments only start to exceed debt at around 24 months to 3 years. Current economic trends and troubled car market won't help.

Talk to dealer and explore options. Even if there is a penalty it may be worth soaking up.

GavMan

If she can't flog it to cover the outstanding settlement figure (either privately or to a dealer), pay out the balance to get her to half way to the loan amount and then hand it back under the half rule. PCP is covered by HP legislation whereby you can hand back the item without financial penalty once half has been paid back.

I'm not sure what this goes down as on her ICB report however.

Gael23

Lantus wrote: »

What car is it. At one year depreciation curve is steepest. Payments only start to exceed debt at around 24 months to 3 years. Current economic trends and troubled car market won't help.

Talk to dealer and explore options. Even if there is a penalty it may be worth soaking up.

It’s a 191 Micra

Casati

Gael23 wrote: »

It’s a 191 Micra

She needs to get the settlement figure by calling Nissan finance. If she originally made the max deposit she might have a nice bit of equity and might walk away with money in her pocket.

She can go to any dealer and see what they would give her to buy the car off her - I’d go and price all Nissan dealers within shooting distance- dealers don’t just sell cars but also buy them and if a dealer had a buyer for a 191 Micra but didn’t have stock she might get lucky.

She can also sell privately but it’s a bit harder as she will have to pay off the finance before selling

GavMan

Credit Union load to cover the PCP and remove outstanding finance flags on the car might be worthwhile if she decides to sell privately