Questions about the future of diesel in the UK

rousetafarian

Handing back a car at any point early into a PCP is going to be very expensive. Typically with a minimal deposit I’ve voluntarily terminated my contract and handed it back 30 months into a 36 month contract with no penalty. Legally once you’ve paid off half of the total balance including the interest you have no further financial liability for that vehicle.

As you may be relocating at short notice PCP may not be appropriate for your circumstances. Or of course take the car with you and drive on the right hand side

ChuckMountain

Yes hiring can leave you liable for the outstanding amount of hire.  In the case of the PCP you can as rouse says you can either pay 50% of the total amount borrowed (which includes the balloon payment) or sell the car (with agreement) and pay the difference between the cars value and the outstanding finance.  Usually it is that way round as the moment you drive off the forecourt you lose 20% or so.

Enigma2k4

Interesting.....

So in theory I could put down 50% of the value as a deposit and then I would be in alot better position should my company decide to move me in short notice?

IronGiant

No, it's not 50% of the value of the car, but 50% of the outstanding finance.

Enigma2k4

Ah yes, that makes more sense.

ChuckMountain

Yes and there is normally a maximum deposit percentage anyway that you can put in depending on the deals.

The more deposit you put in the lower the monthly payment on a PCP would be but the Balloon payment would remain the same (that only varies with the annual mileage you agree on).

Mathematically if you were allowed\got to a point where the monthly payments were minimal then your VT 50% would be into the balloon payment figure so you would not be able to VT it.

Imo you should be £0 to £500 deposit into a PCP so the monthly figures are comparable.  You will have minimal more likely no equity in the car at the end so if you do say want to put.

If you do want to put a large deposit in then you should split that over the monthly payment and save it too for the next time round as you will need to find that for the next deposit.