Early termination of PCP

[Utumno]

In my case the agreement states the £ total amount payable including initial and the £ amount which is half of it for the voluntary termination right. Usually, I go for a large initial payment to reduce the monthlies which typically means half the total amount is paid around the end of year 3.

All I’d say is don’t forget to add the interest up to the intended point of VT as well - different finance companies handle the amortisation of interest differently in agreements - some flat monthly, some compound so the proportion of interest charges to principal are higher at the start of the agreement and then the proportion declines over time, there are many others too.

I’m sure you’ve already got this mapped out, but the numbers can be a treacherous area and can quickly wipe out any supposed VT benefit. Again Legal Beagles give good advice in their pack and I can’t recommend looking there highly enough.

First thing I personally do with any new PCP is build a spreadsheet telling me where the VT 50% point is, and I use that point in time to determine whether I’m continuing with the finance arrangement or not based on the value of the vehicle, the GFV payable and any other factors. Past the earliest VT point you won’t get any refunds on payments so if at that point you already know you’d be sending the car back anyway you might as well consider VT early!

 

[TheGman247]

First thing I personally do with any new PCP is build a spreadsheet telling me where the VT 50% point is, and I use that point in time to determine whether I’m continuing with the finance arrangement or not based on the value of the vehicle, the GFV payable and any other factors.

Can you share the spreadsheet?

 

[Utumno]

Can you share the spreadsheet?

Sure, but it’s very specific to me, my current agreement and pretty scruffy I’ll clean it up a bit and post a GSheet link here in case it offers any help, but basically it’s just a month by month settlement figure estimator with a simple percentage calculation from the total amount of the loan. These things are easily downloadable in cleaner format from many places on t’Internet.

In my own specific case with a GFV of £27,914 due in Aug 2026 and a current vehicle market valuation of £33,088, unless there’s a Damascean recovery in used values the vehicle is either being VT’d in month 44/48 or returned at the end of the agreement