# Voluntary Termination of a PCP car deal - any experiences?



## MikeH (Jan 2, 2021)

Hi all
Happy New Year and all that jazz
Has anyone ever been down the route of a Voluntary Termination on a PCP deal. 
I'm 2.5 years into a 4 year deal and keen to get out early as want to reduce outgoings and don't want to stay with BMW 
Anyone any experience of this?
thanks in advance
Mike


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## GreiginFife (Jan 2, 2021)

@MikeH Yes, my wife did this two years ago.
You need to be 50% of the original total finance to VT.
We had 2 payments to make. A date for hand over was agreed at the dealership and the car was inspected by a finance company rep. Just like at the end of a lease really. They looked for everything.
Also mileage was taken in to account, we were about 600 miles over at 13.5p per mile so had £80 odd to pay.

Any scratches over a certain size, or dents over a certain size were chargeable (luckily we didn't have any) and tires were checked for min 3mm tread.

They also demand that service hostory has been maintained or it wipes value off the car that you  have to make up.

All in all it was just like handing back a lease car.
You then get a finance termination letter along with DVLA notification of change of keeper.

Easy enough, but we were told that it may then affect the companies decision to lend to you again. Not problematic if you don't want to deal with them again.


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## Deleted Member 1156 (Jan 2, 2021)

I had similar to Greg although mine was a lease not PCP. I'm fighting with the finance company right now over an extra payment they took after returning the car. If you do end the agreement make sure you cancel the DD straight away!

Ps.... You've had 2 replies from diehard BMW fans, why are you changing? 🤔


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## Pathetic Shark (Jan 2, 2021)

He's realised the indicators actually do work


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## GreiginFife (Jan 2, 2021)

drive4show said:



			I had similar to Greg although mine was a lease not PCP. I'm fighting with the finance company right now over an extra payment they took after returning the car. If you do end the agreement make sure you cancel the DD straight away!

*Ps.... You've had 2 replies from diehard BMW fans, why are you changing?* 🤔
		
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To be honest Gordon, I wouldn't class myself as diehard BMW fan, I had shocking service from them last year and if it wasn't for the fact that the M340 is just an absolutely fantastic car, I'd probably go back to Merc. 

Mike, you need to check your finance position first as it's not the time/duration that matters, it's when you hit the 50% of finance that matters. Unless you paid a *big* deposit and are paying high monthly payments 2.5 years might be early early. Usually around the 3 to 3.25 year point.


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## MikeH (Jan 2, 2021)

thanks for the replies gents - very useful to hear the feedback
I hit 50% in September so a bit of a way to go but will definitely consider it as not sure PCP is the best route for me any more. Was the right option when I did my first one with BMW 5 years ago but probably no longer. And, while I do like my car 520D Touring Sport think there's better value out there. My wife hassling me about monthly cost and 16 yer old daughter wants us to go more green so looking at Skoda Superb IV or the Octavia VRS IV (both estates)


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## Blue in Munich (Jan 2, 2021)

MikeH said:



			thanks for the replies gents - very useful to hear the feedback
I hit 50% in September so a bit of a way to go but will definitely consider it as not sure PCP is the best route for me any more. Was the right option when I did my first one with BMW 5 years ago but probably no longer. And, while I do like my car 520D Touring Sport think there's better value out there. My wife hassling me about monthly cost and *16 yer old daughter wants us to go more green* so looking at Skoda Superb IV or the* Octavia VRS IV* (both estates)
		
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If you are going to drive that properly Mike, the last thing it will be is green!


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## SteveJay (Jan 2, 2021)

drive4show said:



			I had similar to Greg although mine was a lease not PCP. I'm fighting with the finance company right now over an extra payment they took after returning the car. If you do end the agreement make sure you cancel the DD straight away!

Ps.... You've had 2 replies from diehard BMW fans, why are you changing? 🤔
		
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If you don't mind me asking, how far into the lease did you terminate? I am midway through a 4 year contract and would like to terminate maybe in a year or so. I had assumed I would have to pay pretty much all the remaining lease payments to get out, so haven't investigated it. Did they just accept what you had paid to date? Mine is, unsurprisingly, well within the mileage limit!


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## MikeH (Jan 2, 2021)

Blue in Munich said:



			If you are going to drive that properly Mike, the last thing it will be is green!  

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ha! know what you man although being the PHEV version seems like you get the best of both worlds in that could do all the short range tootling about (of which there is a lot) on electric and then the longer stuff on petrol... and having not that long ago done a driver awareness course I'm pretty good on driving sensibly


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## Deleted Member 1156 (Jan 2, 2021)

SteveJay said:



			If you don't mind me asking, how far into the lease did you terminate? I am midway through a 4 year contract and would like to terminate maybe in a year or so. I had assumed I would have to pay pretty much all the remaining lease payments to get out, so haven't investigated it. Did they just accept what you had paid to date? Mine is, unsurprisingly, well within the mileage limit!
		
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I had 6 months left on a 4yr lease, quoted me 50% of the remaining balance to terminate early 👍


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## Beedee (Jan 2, 2021)

You have to check the mileage.  It will be pro-rated against the length of the contract.  If you're over the expected mileage there will be an extra charge.  I.e. If you take a 4 year 10K per annum deal and want to hand the car back after 2 years, the mileage must be about 20K or less.  If you're comfactortably over that, there will be a charge.  If you're under that, then no idea I'm afraid.


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## Deleted Member 1156 (Jan 2, 2021)

Sadly there is no refund on 'unused' mileage. I was 6k under my allowance due to working from home because of covid.


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## Deleted member 18588 (Jan 2, 2021)

Beedee said:



			You have to check the mileage.  It will be pro-rated against the length of the contract.  If you're over the expected mileage there will be an extra charge.  I.e. If you take a 4 year 10K per annum deal and want to hand the car back after 2 years, the mileage must be about 20K or less.  If you're comfactortably over that, there will be a charge.  If you're under that, then no idea I'm afraid.
		
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In my experience there's no refund or discount if your mileage is less than the pro-rata figure e.g. 17k rather than 20k.


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## GreiginFife (Jan 2, 2021)

MikeH said:



			thanks for the replies gents - very useful to hear the feedback
I hit 50% in September so a bit of a way to go but will definitely consider it as not sure PCP is the best route for me any more. Was the right option when I did my first one with BMW 5 years ago but probably no longer. And, while I do like my car 520D Touring Sport think there's better value out there. My wife hassling me about monthly cost and 16 yer old daughter wants us to go more green so looking at Skoda Superb IV or the Octavia VRS IV (both estates)
		
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Bear in mind that you have still have the option of paying up to the 50% mark of you are dead set on getting rid. 
No discounts on that though, would be 9 or 10 months at your current rate.


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## Mudball (Jan 3, 2021)

Slightly different question and not wanting to hijack the thread ...

I wanted to do a one off overpayment of £500 with the idea that I would reduce the monthly pay on the PCP.  BMW finance sent a note saying it would be more expensive for me to make an 500 quid overpayment!! WTF!! 
haven’t called them back to try and understand their logic.  Anyone had a similar experience?


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## Mike79 (Jan 3, 2021)

No experience of this, but looks like I will find out around the same time as yourself -  my 50% point is also September. Currently getting trade in offers several £k below settlement amount for my Audi so will likely be VTing this one and might rethink the type of finance going forward (currently PCP)


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## Bunkermagnet (Jan 4, 2021)

My eldest daughter has this problem, which whilst she got out of the PCP, it did cost her. What is obvious is that BMW deliberately price their PCP‘s  cheager to make their car more affordable but all it does it tie you in much more And for longer.


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## Jamesbrown (Jan 4, 2021)

I’m about to start proceedings. Car in for minor chip and dent removal today and wheel refurb in two weeks by then I’ll be sending the letter. 
It’s my understanding that mileage should not be an issue. They cannot charge for extra mileage but they do try it on and obviously people pay.


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## chrisd (Jan 4, 2021)

I've never done a PCP and now at my time in life never will but I was told that PCP's will become one of the next "selling scandals" sometime soon, similar to mortgage misselling, bank charges etc


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## KenL (Jan 4, 2021)

Mike79 said:



			No experience of this, but looks like I will find out around the same time as yourself -  my 50% point is also September. Currently getting trade in offers several £k below settlement amount for my Audi so will likely be VTing this one and might rethink the type of finance going forward (currently PCP)
		
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My last car (Audi A3) was into the last month of a 3 year PCP before half was paid.
This was due to an artificially high residual value. This meant that I couldn't trade the car in at anytime. An annoyance as I had to keep it to the end and hand it back.
No charges as it was in great condition.


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## happyhacker (Jan 4, 2021)

Jamesbrown said:



			I’m about to start proceedings. Car in for minor chip and dent removal today and wheel refurb in two weeks by then I’ll be sending the letter.
It’s my understanding that mileage should not be an issue. They cannot charge for extra mileage but they do try it on and obviously people pay.
		
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Mileage is 100% an issue when you hand a PCP car back (either via VT or end of term). 

You signed up for X amount of miles per annum (which is the factored into the finance company setting a residual value for your car). If you are over the mileage you will be liable for the excess mileage cost (as the extra mileage will have reduced the value of the car). 

If this is only a couple of hundred quid they might not chase you. If you are massively over your mileage you better believe they will follow up on it and non payment will wreck your credit rating (it will be registered as a default).


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## Bunkermagnet (Jan 4, 2021)

happyhacker said:



			Mileage is 100% an issue when you hand a PCP car back (either via VT or end of term).

You signed up for X amount of miles per annum (which is the factored into the finance company setting a residual value for your car). If you are over the mileage you will be liable for the excess mileage cost (as the extra mileage will have reduced the value of the car).

If this is only a couple of hundred quid they might not chase you. If you are massively over your mileage you better believe they will follow up on it and non payment will wreck your credit rating (it will be registered as a default).
		
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Exactly what my daughter had, having foolishly signed up for the cheaper lower mileage option. She managed to do a deal on a smaller lower cost to her(and more sustainable) option with BMW, got rid of her top end X3 and managed to avoid the £9k penalty fee in the process.


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## Bunkermagnet (Jan 4, 2021)

chrisd said:



			I've never done a PCP and now at my time in life never will but I was told that PCP's will become one of the next "selling scandals" sometime soon, similar to mortgage misselling, bank charges etc
		
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I remember reading an article not too long ago saying exactly this. It’s even more obvious when you realise that apparently 90% of all new Mercs sold are PCP.


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## GreiginFife (Jan 4, 2021)

Bunkermagnet said:



			Exactly what my daughter had, having foolishly signed up for the cheaper lower mileage option. She managed to do a deal on a smaller lower cost to her(and more sustainable) option with BMW, got rid of her top end X3 and managed to avoid the £9k penalty fee in the process.
		
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9 grand? In excess mileage fees?


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## Bunkermagnet (Jan 4, 2021)

GreiginFife said:



			9 grand? In excess mileage fees?
		
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Yes. Stupid I know, and I couldn’t believe how stupid she was. She was something like 20k miles over the allowance.
But then she was using for work, with lots of miles, and had taken out a contract with something like a 6k a year mileage. They figured that paying the lowest option and Then penalty charge would work out cheaper overall than paying the for a correct mileage allowance contract over the term. They hadn’t planned on getting rid of it mid term due to its running costs.


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## GreiginFife (Jan 4, 2021)

Bunkermagnet said:



			Yes. Stupid I know, and I couldn’t believe how stupid she was. She was something like 20k miles over the allowance.
But then she was using for work, with lots of miles, and had taken out a contract with something like a 6k a year mileage. They figured that paying the lowest option and Then penalty charge would work out cheaper overall than paying the for a correct mileage allowance contract over the term. They hadn’t planned on getting rid of it mid term due to its running costs.
		
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Something not right there. Even the X3M Comp is usually around 23-25p per mile excess. That would be 36-39k miles over. And that, I'm afraid, is not the fault of the dealer or the PCP. 

On the next "top" model (the X3 M40i, (previously the X3 35d) excess is usually around 15p per mile. so that would be somewhere around 60k over.


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## Piece (Jan 4, 2021)

Bunkermagnet said:



			I remember reading an article not too long ago saying exactly this. It’s even more obvious when you realise that apparently 90% of all new Mercs sold are PCP.
		
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It's about getting the right PCP from the onset and knowing what you are getting yourself into, realistic commitment, etc. 

My wife is about to finish her PCP and the GFV/Balloon is around £3k under the current second hand market value.  No brainer to buy the car. And well under mileage too as the annual contract was a realistic one.


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## Bunkermagnet (Jan 4, 2021)

GreiginFife said:



			Something not right there. Even the X3M Comp is usually around 23-25p per mile excess. That would be 36-39k miles over. And that, I'm afraid, is not the fault of the dealer or the PCP.

On the next "top" model (the X3 M40i, (previously the X3 35d) excess is usually around 15p per mile. so that would be somewhere around 60k over.
		
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All I know is that it was a 2ltr diesel, fully loaded showroom model with a list of £50k, and the PCP was through BMW.Its gone now, and she’s got over it and learnt the error of her ways. All that matters is she won’t do it again.


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## Bunkermagnet (Jan 4, 2021)

Piece said:



			It's about getting the right PCP from the onset and knowing what you are getting yourself into, realistic commitment, etc.

My wife is about to finish her PCP and the GFV/Balloon is around £3k under the current second hand market value.  No brainer to buy the car. And well under mileage too as the annual contract was a realistic one.
		
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I agree I had one on my Mazda, not because I didn’t have the money to buy it outright from the start, I did, but there was no financial penalty on my money or pocket by taking out the PCP. The balloon I put into a bond which earnt me a decent return (compared to everything else right now) so it even reduces what I’ve paid for the car.


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## GreiginFife (Jan 4, 2021)

Bunkermagnet said:



			All I know is that it was a 2ltr diesel, fully loaded showroom model with a list of £50k, and the PCP was through BMW.Its gone now, and she’s got over it and learnt the error of her ways. All that matters is she won’t do it again.
		
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My point was though, your original post on the subject castigates BMW for somehow setting the rate low to make the car affordable when that's not what happened. 

90% of the dealers set advertised "from" prices based on 8000 miles PA and show this in the pricing structure, if the customer choses another limit then the cost will go up or down *at their request*. 

£9000 excess mileage charges on a 2.0 Diesel (max 15p per mile) could only be down to the driver recklessly ignoring the limit that *they* agreed to (to the tune of some 60000 additional miles). 

PCP rate is also based on/affected by the deposit paid and the monthly payment agreed.


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## Bunkermagnet (Jan 4, 2021)

GreiginFife said:



			My point was though, your original post on the subject castigates BMW for somehow setting the rate low to make the car affordable when that's not what happened.

90% of the dealers set advertised "from" prices based on 8000 miles PA and show this in the pricing structure, if the customer choses another limit then the cost will go up or dowun *at their request*.

£9000 excess mileage charges on a 2.0 Diesel (max 15p per mile) could only be down to the driver recklessly ignoring the limit that *they* agreed to (to the tune of some 60000 additional miles).

PCP rate is also based on/affected by the deposit paid and the monthly payment agreed.
		
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I agree with the main baisis of your comments, however I had a few garages (non German ) tell me when I was looking round for my current car that BMW and VW deliberately priced their PCP's on the low side to try and keep those car owners buying again because the value of their car was less than another marque's dealer would give them if you can understand what I'm saying.
I don't doubt my daughter was an idiot for taking it on, however when trying to get out of it they did everything they could to keep her either in that car, or at least in another BMW which ultimately she had to because of the financial hole she had got herself in with it.


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## Jamesbrown (Jan 4, 2021)

happyhacker said:



			Mileage is 100% an issue when you hand a PCP car back (either via VT or end of term).

You signed up for X amount of miles per annum (which is the factored into the finance company setting a residual value for your car). If you are over the mileage you will be liable for the excess mileage cost (as the extra mileage will have reduced the value of the car).

If this is only a couple of hundred quid they might not chase you. If you are massively over your mileage you better believe they will follow up on it and non payment will wreck your credit rating (it will be registered as a default).
		
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VTing a car does not warrant paying excess mileage. Voluntary termination is your legal right to end early providing you’ve paid the 50% of total owing and the car is not beyond normal wear and tear. That’s the law. 
There is no provision in the law for excess mileage. Lenders will chase you for it, they will insist you have to pay it, you will get bullying letters and it will drag on and you’ll have to fight it. Granted if it’s a few hundred pounds, might as well pay it. But if your exploiting purposely the VT rule and racking thousands more miles than your allowed intentionally then you ignore the letters and fight. 

VT cannot affect your credit rating as your exercising a legal right.


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## GreiginFife (Jan 4, 2021)

Bunkermagnet said:



			I agree with the main baisis of your comments, however I had a few garages (non German ) tell me when I was looking round for my current car that BMW and VW deliberately priced their PCP's on the low side to try and keep those car owners buying again because the value of their car was less than another marque's dealer would give them if you can understand what I'm saying.
I don't doubt my daughter was an idiot for taking it on, however when trying to get out of it they did everything they could to keep her either in that car, or at least in another BMW which ultimately she had to because of the financial hole she had got herself in with it.
		
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Every dealer will try to give you a lower trade in. It's not in their interest to do otherwise whether they be German or not. 

As Piece pointed out, it's about reading the agreements, assessing the numbers and choosing a level that is right for you. All of the values are made available _before _you sign any paperwork. 

I am on my second BMW PCP and 4th in all since 2014 (the other two being Mercedes) and never had a problem once with values being other than I anticipated. 

I don't think it's rocket science that if you take a high value car at a low monthly payment that there will be a deficit in value at the close.


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## happyhacker (Jan 4, 2021)

Jamesbrown said:



			VTing a car does not warrant paying excess mileage. Voluntary termination is your legal right to end early providing you’ve paid the 50% of total owing and the car is not beyond normal wear and tear. That’s the law.
There is no provision in the law for excess mileage. Lenders will chase you for it, they will insist you have to pay it, you will get bullying letters and it will drag on and you’ll have to fight it. Granted if it’s a few hundred pounds, might as well pay it. But if your exploiting purposely the VT rule and racking thousands more miles than your allowed intentionally then you ignore the letters and fight.

VT cannot affect your credit rating as your exercising a legal right.
		
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You are not wrong about the excess mileage charge but it's a bit glib to say it won't apply.  The issue with the VT and excess mileage is under the fair wear and tear. That is based on an agreed mileage which if heavily exceeded would therefore have excessive wear and tear.

The VT won't affect your credit rating, the outstanding bill the finance company chase you for could. You can be assured if the mileage is heavily over agreed limits the finance company will pursue a case over charges. You can fight it of course, but I believe there have been some recent cases taken to court and found in favour of the finance companies (money saving expert forums had it if I recall).

Anyways, as always - take professional legal advice rather than the ramblings on a golf forum from people who are bored with lockdowns. 👍


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## KenL (Jan 4, 2021)

My A3, handed back at the end, was slightly over on mileage.

I was happy to pay as this was part of my agreement. About a month after I handed the car back, I got an invoice for just over £200.

It was only about 6p per mile.


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## Karl102 (Feb 2, 2021)

Sorry, what does VT mean?


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## MikeH (Feb 2, 2021)

Karl102 said:



			Sorry, what does VT mean?
		
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VT = Voluntary Termination


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## Karl102 (Feb 2, 2021)

MikeH said:



			VT = Voluntary Termination
		
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Cheers Mike!
As per the title of the post..... !  Sorry - been a long day....!


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## pauljames87 (Feb 2, 2021)

KenL said:



			My A3, handed back at the end, was slightly over on mileage.

I was happy to pay as this was part of my agreement. About a month after I handed the car back, I got an invoice for just over £200.

It was only about 6p per mile.
		
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Sometimes you have to judge if it's worth paying for the extra milage on the monthly 

If their are brilliant deals on say 8000 miles a year and you do 10000 miles but the payment per mile works out less than paying for the 10,000 a year might aswell risk it


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## Jamesbrown (Mar 14, 2021)

I’ve just started the ball rolling with VFS. 

Letter sent, phone call received confirming that is what I would like to do. 

Providing no hoops to go through the next step should be arranging pick up hopefully. 

Over 50% total payed, car under mileage.


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## Jamesbrown (Mar 16, 2021)

Jamesbrown said:



			I’ve just started the ball rolling with VFS.

Letter sent, phone call received confirming that is what I would like to do.

Providing no hoops to go through the next step should be arranging pick up hopefully.

Over 50% total payed, car under mileage.
		
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Text from British Car Auctions today to book a pick up slot. Come next week to pick her up. 

Very easy procedure. Smooth sailing for me. 

It could easily go back to the dealer, it’s under mileage and looks brand new so know idea why it goes to auction. 

But that was my experience. Pretty painless.


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## KenL (Mar 16, 2021)

They will spend close to an hour inspecting the car.

Are there any parking dings, a lot of stone chips or marks on the alloys.
Has it been fully serviced, are the tyres all OK?

These are things that can come at a cost, just mentioning so you are aware.


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