UK - Ending finance contract early?

[Supra_UK_]

Hi chaps,

Does anyone have any experience of ending their PCP/PHP contract early?

I checked my contract and it says I have a early termination right only if I have paid at least 50% of the total amount - I did the math and this would still be quite a long time (>1 year).

I have considered doing this for personal and financial reasons, money would be better spent elsewhere ideally - I know, should have thought about it sooner, but it is what it is, I might not be able to do this, and will keep paying it, but just wondering if anyone can share a concrete real life example when you wanted / had to ask your car finance company to end the agreement early and whether it worked /exceptions were made? etc.

I'm 99% sure it's not possible since the contract seems black and white (as they tend to be by nature...) but hey, I suppose this is what forums are for, on the off chance someone can share a useful experience

Thanks.

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[Malcolm Feth]

I would suggest to reach out and just ask. Often banks might find a solution as in the end, they don't want to end up with chasing you for money. Call and ask. in the worst case scenario they will tell you to stick to the contract.

This is a reason why I never buy cars on finance from directly. There are other ways to finance the purchase. Doing PCP/hp is ridiculously expensive and limiting (like you can't do trackdays).

 

[Crimzon_Skyz]

I have quite a bit of experience with this and if you need any more advise just inbox me but:
If the contract has a purchase clause (you usually have to have ticked a box at the beginning of the contract) and paid something between £1-10 extra for it you can buy out. I have never read a PCP with a 50% paid clause in it, however it does make sense as they will want to earn a certain amount of interest. It will have been calculated at the time of purchase to maybe meet there expectations at the 50% point.

My personal experience was if selling the car to exit the contract you contact a garage or big buying company like CarWOW and tell them you have a PCP, once you have negotiated the price they close the contract for you on collection. You do have to request a settlement figure from your current finance company to give to them. That settlement will either just be what you owe on the car or maybe in your case; what you owe on the car + any lost revenue from closing the deal before the 50% mark. Once you get the figure its normally quite obvious if they are adding extra cash on as a penalty.

If you want to sell privately/buy the car/pay off with another loan you still need to get the settlement figure and speak to them as to how they would like to receive the money to close the contract.

P.S. After you have done any of this make sure to check with the contract holder to see the finance has been cleared despite what any company tells you.

Disclaimer: Im just a dude on the internet who as sold a couple of cars under PCP deals.

 

[Supra_UK_]

I have quite a bit of experience with this and if you need any more advise just inbox me but:
If the contract has a purchase clause (you usually have to have ticked a box at the beginning of the contract) and paid something between £1-10 extra for it you can buy out. I have never read a PCP with a 50% paid clause in it, however it does make sense as they will want to earn a certain amount of interest. It will have been calculated at the time of purchase to maybe meet there expectations at the 50% point.

My personal experience was if selling the car to exit the contract you contact a garage or big buying company like CarWOW and tell them you have a PCP, once you have negotiated the price they close the contract for you on collection. You do have to request a settlement figure from your current finance company to give to them. That settlement will either just be what you owe on the car or maybe in your case; what you owe on the car + any lost revenue from closing the deal before the 50% mark. Once you get the figure its normally quite obvious if they are adding extra cash on as a penalty.

If you want to sell privately/buy the car/pay off with another loan you still need to get the settlement figure and speak to them as to how they would like to receive the money to close the contract.

P.S. After you have done any of this make sure to check with the contract holder to see the finance has been cleared despite what any company tells you.

Disclaimer: Im just a dude on the internet who as sold a couple of cars under PCP deals.

Thank you so much mate! This is very helpful I'm going to read it properly again later and have a think.

@Malcolm thx to you too

 

[Supra_UK_]

I have quite a bit of experience with this and if you need any more advise just inbox me but:
If the contract has a purchase clause (you usually have to have ticked a box at the beginning of the contract) and paid something between £1-10 extra for it you can buy out. I have never read a PCP with a 50% paid clause in it, however it does make sense as they will want to earn a certain amount of interest. It will have been calculated at the time of purchase to maybe meet there expectations at the 50% point.

My personal experience was if selling the car to exit the contract you contact a garage or big buying company like CarWOW and tell them you have a PCP, once you have negotiated the price they close the contract for you on collection. You do have to request a settlement figure from your current finance company to give to them. That settlement will either just be what you owe on the car or maybe in your case; what you owe on the car + any lost revenue from closing the deal before the 50% mark. Once you get the figure its normally quite obvious if they are adding extra cash on as a penalty.

If you want to sell privately/buy the car/pay off with another loan you still need to get the settlement figure and speak to them as to how they would like to receive the money to close the contract.

P.S. After you have done any of this make sure to check with the contract holder to see the finance has been cleared despite what any company tells you.

Disclaimer: Im just a dude on the internet who as sold a couple of cars under PCP deals.

Have a couple of questions please mate, if you dont mind: so did you ask permission and get it in writing from the finance company/bank that you want to sell the car whilst it's still on finance?

Once you had permission, and you got the settlement figure, do you disclose that figure to the dealer you're selling to during discussions or only after they give you a quote to buy? As I assume, in a hypothetical blue sky scenario, if my Supra was worth more than the settlement figure that would be great to get some money back but I also assume the dealer would try to take advantage of that and lower the offer.

 

[BrettMRC]

Just ask, with values as they are it's possible a buy back will put you in the black.

 

[Supra_UK_]

Thanks - I sent an email - if anything comes out of this I will report back here just as information for anyone else that may search for this down the line.

 

[Crimzon_Skyz]

Have a couple of questions please mate, if you dont mind: so did you ask permission and get it in writing from the finance company/bank that you want to sell the car whilst it's still on finance?

Once you had permission, and you got the settlement figure, do you disclose that figure to the dealer you're selling to during discussions or only after they give you a quote to buy? As I assume, in a hypothetical blue sky scenario, if my Supra was worth more than the settlement figure that would be great to get some money back but I also assume the dealer would try to take advantage of that and lower the offer.

Who is your finance with? The website for the company usually has a portal that you can access and it will just tell you the figure right off the bat for your initial calculations then you have to ask for the "formal figure" in writing so you can pass it on if you are getting a third party to pay. Sometimes its just a button you press and it sends it out to you but once you request it the figure doesn't change for a set amount of time so if you then make a payment on the car it wont alter the figure for a few weeks so watch out for that.

In regard to who you tell and when - That's really up to you and what you need. In my humble opinion id work out a deal on a new car without mentioning the details unless i thought it would help me negotiate for more money off somehow. once you have a rough agreement you will have to tell them everything though.

 

[Supra_UK_]

Who is your finance with? The website for the company usually has a portal that you can access and it will just tell you the figure right off the bat for your initial calculations then you have to ask for the "formal figure" in writing so you can pass it on if you are getting a third party to pay. Sometimes its just a button you press and it sends it out to you but once you request it the figure doesn't change for a set amount of time so if you then make a payment on the car it wont alter the figure for a few weeks so watch out for that.

In regard to who you tell and when - That's really up to you and what you need. In my humble opinion id work out a deal on a new car without mentioning the details unless i thought it would help me negotiate for more money off somehow. once you have a rough agreement you will have to tell them everything though.

Hi mate - thanks again
It's with Toyota - yes I logged in the portal and you can request the figure in there, but didn't want to bother doing anything until they get back to me to say if it's even worth it, as I read the whole contract and yes you can settle it early but not sure if I can do it via the method we discussed, but hopefully I can!

 

[Crimzon_Skyz]

Hi mate - thanks again
It's with Toyota - yes I logged in the portal and you can request the figure in there, but didn't want to bother doing anything until they get back to me to say if it's even worth it, as I read the whole contract and yes you can settle it early but not sure if I can do it via the method we discussed, but hopefully I can!

Im sure you may not want to say so just ignore me if so, why are you selling? I figured from a previous conversation you were going to be holding on to it for quite some time?

 

[Supra_UK_]

Im sure you may not want to say so just ignore me if so, why are you selling? I figured from a previous conversation you were going to be holding on to it for quite some time?

I'll DM you mate once I have news and can explain

 

[MK_Surrey]

Did you get sorted?

I just went to my dealer and asked if they wanted to buy my Supra back. They said yes. We agreed a price. They paid me the equity difference between the sales price and what I owed on my PCP.

I've never kept a PCP til the end and have always just had the buyer settle whatever PCP I have outstanding.

 

[Supra_UK_]

Did you get sorted?

I just went to my dealer and asked if they wanted to buy my Supra back. They said yes. We agreed a price. They paid me the equity difference between the sales price and what I owed on my PCP.

I've never kept a PCP til the end and have always just had the buyer settle whatever PCP I have outstanding.

Hello mate - nice one thanks for sharing.

Yes I spoke to a few dealers the past 2 weeks, but got pretty shitty low offers vs what I wanted, bad season/bad timing for it - gonna hold onto it for now, and try again after new years.

Unless I have a change of heart... If I get good equity then it's worth it, but if not, it's too sad to part from it, difficult choice, I won't have a car as special as this likely ever again, so I don't want to rush it and lose money...

Can I ask please - the actual transaction, how did that go? Toyota financial services told me to hold onto the car until finance is settled i.e. getting a letter saying settlement is cleared. Dealers however were saying I bring the car in, they pay, and the car stays there, which contradicts that directive; seems a bit risky for myself should anything go wrong I would legally be liable to keep paying the car.

What's your thoughts on that please and how did it work out for you timings wise?

Cheers

 

[BrettMRC]

If the dealer is settling direct with Toyota FS then I'd let them keep the car while it's going through - less grief.
I did the same when I returned an RX450HL early, no issues at all.

 

[Supra_UK_]

I want to thank everyone here for their advice, and confirm this all worked out nicely, so I have now learned a new way to get out of a PCP early, it's brilliant! And if you are not in a hurry and shop around, you can actually get some equity, granted if you have put in a decent deposit down initially

Some learnings after 3-4 months of talking to different dealers all across the country, hopefully this can help someone in the future like it did for me:

- AVOID generic car traders and big ones like carwow or webuyanycar, rubbish offers.
- AVOID giving it back to Toyota, they will also give you a bad valuation.
- LOOK FOR Luxury/Unique sports car traders, even if they are far away from you, it's worth it - I used Google Maps and filtered by 5 stars rated only, best or nothing in my opinion...
- CHECK Google, Facebook and Trustpilot reviews thoroughly.
- CHECK their current cars for sale stock on their website and see if the values of cars they're selling is lower, similar or higher than what your car is worth.
Personally I went with ones that we're selling higher range cars (or at the least, the same price range) as this means they have CASH to just buy it off you directly instantly at a better price with no faffing about.
- Some of them can't afford to buy it direct off you so they will offer a selling service where they look for a buyer for you - My advice: if the car is on PCP, don't do it, read your contract, it may breach it.
Also, their fee will mean you still won't make much profit in the end, and you may have to wait for ages.
- Find a big, wealthy established luxury & sports car trader, ask for a fair price, be patient, and you'll be rewarded - I didn't even have to haggle.
- BE HONEST - openly share your settlement figure, if you know its actual market worth (check Autotrader for similar spec cars) then you'll know if they're low balling you - if they are serious business people, they won't.

I won't share exact details of my sale but I can say that the patience paid off, as the last dealer I went with in the end gave me far more than the highest offer I had had in the previous 3 months if research.

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