Polo - VW -upgrading a PCP agreement

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Fri 28 Apr 2017 10:36
Polo - VW -upgrading a PCP agreement - FoxyJukebox

A neighbour has recently had mechanical issues with his 3 year old Polo--now thankfully resolved. However he has started to lose confidence with the car--and since it is just in the last of a four year PCP agreement is thinking of trading in and upgrading to another VW?

is this allowed under the agreement, what are the options or should he just sit tight for the remaining 14 months?

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Fri 28 Apr 2017 10:55
Polo - VW -upgrading a PCP agreement - RichardW

Read the small print?

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Fri 28 Apr 2017 11:08
Polo - VW -upgrading a PCP agreement - daveyjp
Dealers sell cars, they will always find a way of getting a buyer into a new one.

A finance settlement figure will be due on the existing car, once this is paid the initial 4 year PCP loan period is ended. The car can then be handed back and a new PCP started.

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Fri 28 Apr 2017 11:12
Polo - VW -upgrading a PCP agreement - SLO76
Should be doable but it'll mean putting money in upfront. What went wrong with the car to put him off?
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Fri 28 Apr 2017 11:22
Polo - VW -upgrading a PCP agreement - Avant

You can trade in any time under a PCP agreement, but if you do it too soon you'll have negative equity - i.e. you'll owe more than the market value of the car. In the final year of the agreement you have a better chance of breaking even or (if the car is in good nick and has held its value well, as a Polo should) possibly having a surplus to uise as your deposit on the next one.

He'll get a better price against another VW, but he can of course trade it in against any make of car.

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Fri 28 Apr 2017 20:46
Polo - VW -upgrading a PCP agreement - badbusdriver

My mates step Daughter has her car through a PCP agreement. I dont know the specifics of her deal, other than that it is through the local VW dealer. They got in touch and asked if she wanted a new polo to replace her existing one. and this was well before the renewal date. Im sure she didnt have to pay anything extra either!. Im guessing it was something to do with making sure the dealer had a certain amount of new cars registered.

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Fri 28 Apr 2017 23:19
Polo - VW -upgrading a PCP agreement - glidermania

Technically, you are ending the finance agreement early and some finance houses, even those of the manufacturer, can take a dim view even if you're buying a new car from the same manufacturer.

If you have paid over half of the finance agreement you can voluntarily terminate or VT the agreement anyway. While this is again legal and should have no effect on your credit score, if you want to buy another new car financed from the same source, they may decline you or charge a higher rate of interest. Or you could have no issue whatever.

In reality it is rarely if ever a problem although I have heard of a few people having issues doing this and their credit score being affected.

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Fri 28 Apr 2017 23:26
Polo - VW -upgrading a PCP agreement - daveyjp
VT on a PCP is usually only a few months before the end of the initial loan period as you only pay back half the capital over this period. The rest is the balloon payment.

It is one downside of a PCP which many don't understand.
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Sat 29 Apr 2017 01:05
Polo - VW -upgrading a PCP agreement - Avant

Indeed, and a lot of people don't understand why, after a year of any loan, HP or PCP agreement, so little seems to have been paid off. That's because the monthly payments at first are largely interest, with comparatively little capital element.

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Sat 29 Apr 2017 07:01
Polo - VW -upgrading a PCP agreement - Falkirk Bairn

Different advice on Voluntary Termination!!

www.thecarexpert.co.uk/car-finance-voluntary-termi.../

Neighbour had 48 mths agreement on BMW 320d - @ 33 months he will have paid over 50% of the purchase price inc. fees/interest etc etc - he was told on signing that @ 33 months he can hand the car back under VT & start a new contract.

At this point he is only @ 17 mths so I cannot comment on "his success" BUT it is in-line with the above link.

You write to the Finance company Recorded Delivery!(not the garage) & VT the agreement - it is important that you do not sign any Finance Company paperwork that they send you as you are throwing away your rights under VT & leaving yourself open to termination charges, excess mileage charges etc etc under the Finance Company Agreement - THE VT is under GOVERNMENT FINANCE LEGISLATION!!!

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