Golf R DSG for hire?

[mcmaddy]

Half the payments or half the term is something you can do on a normal HP finance deal not a PCP as Monkeyhanger has said.

[phazer]

You can do it on PCP it's part of the financial regulations - it's just not talked about as they don't like you doing it. It should be in the contract, it certainly is in BMW Finance contract. We did it on a PCP deal, terminated after just over two years and paid the 500 quid to take us to having paid half of what we owed. Remember it's the amount you financed, not the total value of the car.

In our case there was absolutely no point continuing to the end of the PCP as dealers were already offering nearly 3 grand less than the final value, and to part exchange would have made the next car seriously expensive.

No change to credit rating or anything else despite what many say and also walked straight to VW to PCP a Golf 

[phazer]

Half the payments or half the term is something you can do on a normal HP finance deal not a PCP as Monkeyhanger has said.

Read the link I posted, your right to do this under a PCP deal is covered in the Consumer Credit Act 1974 Section 99 http://www.legislation.gov.uk/ukpga/1974/39/section/99

Whether or not you get to take advantage of it (or need to) will depend on your specific deal and the amount you have financed.

[monkeyhanger]

You are financing the whole car on a PCP, the GFV is effectively a final payment you can opt out of but it's value still forms part of your financial agreement of which you must've paid half. On a PCP deal you will see the "total amount payable" figure includes it and you pay interest on the whole balance, which is why VW finance is so expensive - high GFV = lots of interest as you'll always owe a fair chunk of the car.

[phazer]

You are financing the whole car on a PCP, the GFV is effectively a final payment you can opt out of but it's value still forms part of your financial agreement of which you must've paid half. On a PCP deal you will see the "total amount payable" figure includes it and you pay interest on the whole balance, which is why VW finance is so expensive - high GFV = lots of interest as you'll always owe a fair chunk of the car.

I understand all of that. The deal we had was a 4 year PCP, after just over 2 years we needed to swap the car for practicality reasons. We asked what we owed, asked what the car was worth. The difference was -£3k (a value less than the GFV would have been at 4 years - no equity come PCP end clearly). Selling privately was only getting us to costing £500 to get rid. Selling privately is a ball ache however.

We were £500 quid away from having paid half of the owed amount. A no brainer, £500 or £3000....The car went back. Easy.

[monkeyhanger]

You are financing the whole car on a PCP, the GFV is effectively a final payment you can opt out of but it's value still forms part of your financial agreement of which you must've paid half. On a PCP deal you will see the "total amount payable" figure includes it and you pay interest on the whole balance, which is why VW finance is so expensive - high GFV = lots of interest as you'll always owe a fair chunk of the car.

I understand all of that. The deal we had was a 4 year PCP, after just over 2 years we needed to swap the car for practicality reasons. We asked what we owed, asked what the car was worth. The difference was -£3k (a value less than the GFV would have been at 4 years - no equity come PCP end clearly). Selling privately was only getting us to costing £500 to get rid. Selling privately is a ball ache however.

We were £500 quid away from having paid half of the owed amount. A no brainer, £500 or £3000....The car went back. Easy.

I'm presuming your ability to get out at just after 2 years (with half of the total car finance cost paid for) was a combination of a hefty deposit/BMW contribution considered as deposit/discount considered as deposit and (relative to a German marque) poor BMW residuals (which result in you paying a sizeable amount off the balance each month).

I'd be tempted by some of the new BMWs out there, but the sh!tty residuals since they went fleet heavy puts me right off (makes them an ok second hand buy).

[phazer]

You are financing the whole car on a PCP, the GFV is effectively a final payment you can opt out of but it's value still forms part of your financial agreement of which you must've paid half. On a PCP deal you will see the "total amount payable" figure includes it and you pay interest on the whole balance, which is why VW finance is so expensive - high GFV = lots of interest as you'll always owe a fair chunk of the car.

I understand all of that. The deal we had was a 4 year PCP, after just over 2 years we needed to swap the car for practicality reasons. We asked what we owed, asked what the car was worth. The difference was -£3k (a value less than the GFV would have been at 4 years - no equity come PCP end clearly). Selling privately was only getting us to costing £500 to get rid. Selling privately is a ball ache however.

We were £500 quid away from having paid half of the owed amount. A no brainer, £500 or £3000....The car went back. Easy.

I'm presuming your ability to get out at just after 2 years (with half of the total car finance cost paid for) was a combination of a hefty deposit/BMW contribution considered as deposit/discount considered as deposit and (relative to a German marque) poor BMW residuals (which result in you paying a sizeable amount off the balance each month).

I'd be tempted by some of the new BMWs out there, but the sh!tty residuals since they went fleet heavy puts me right off (makes them an ok second hand buy).

Yeah that's pretty much it. I was hoping the Golf would carry at least a bit of equity at the end but for a number of reasons that looks less likely, however there's no desire to move it on early. 

The situation with BMW now does make it a difficult one to consider. Anyone you ask reckons on you needing 20-25% discount to make it a decent deal so likelihood of visiting the dealer is slim.

[p3asa]

Thankfully I don't intend on just handing my car back and walking away.
Its at a value where it roughly equals what is owed on it.
I had a colleague at work many years ago so things might have changed, that handed a car back as he was over half way through paying the finance. He followed everything correctly that was in his T&C's and they managed to black list him. He had a terrible time getting it sorted. So that route is definitely out.

[phazer]

Thankfully I don't intend on just handing my car back and walking away.
Its at a value where it roughly equals what is owed on it.
I had a colleague at work many years ago so things might have changed, that handed a car back as he was over half way through paying the finance. He followed everything correctly that was in his T&C's and they managed to black list him. He had a terrible time getting it sorted. So that route is definitely out.

They legally cannot black list you or otherwise negatively affect your credit rating. It is added to your credit file as per any other credit that is in progress/settled/terminated.

It may affect your ability to get finance on a car from the same company in the short term, but will not and cannot affect finance on any other item like mortgages or whatever.

BMW were rumoured to be difficult if you handed back and wanted another car on finance but I saw no evidence of this, It made no difference to us either in actual credit rating or in having the full choice of cars and finance companies.

I suspect if other items on a persons credit file point to being a risk that adding a termination is going to make vehicle finance tough but the termination is not the issue there it's the crap credit rating in the first place.