car in minus equity on a PCP deal

[tlionhart]

If you have a car for 2yrs (on a 4yr pcp) and you wanted to trade it now for another car. However the dealer says its in minus equity, can you just hand the keys back and end the agreement?

[Issac Hunt]

I guess that will depend on the details of your agreement. You'd need to seek independant advice, Citizens Advice maybe??

My understanding of PCP deals was that you could only had it back (with no financial penalty) at the end of the proposed agreement time period. Could well be mistaken though!

Thats exactly why I only ever buy cars for cash, If I cant afford it then I dont have it!

[zf44]

We had a VW on a PCP plan and wanted it to trade it in for a Mk VI Golf. Part exchange price on our car was shocking and being in negative equity against the finance settlement the Business Manager said to do a voluntary termination which is a painless process. Spoke to VW Finance, sent them a letter and within 4 days the car was collected by one of their agents. Very professionally handled. All you need to do is to check your finance agreement, there will be a section on voluntary termination indicating if you have paid £x amount you can voluntarily terminate the agreement. Call the finance company to confirm that you can voluntarily terminate and they will advise you on the rest. You have a legal right to do this and you will not be penalised especially with any detrimental information appearing on your credit file.

However, a word of warning, apply for finance on your new car first and then voluntary terminate, not everyone is getting car finance at the moment and finance companies are being selective in lending money under the current financial climate.

[Eshrules]

As far as I am aware, you may only terminate a PCP agreement, IF it says you have the right to do so.

If there is no mention of a VT statutory right, you're either going to have to stick it out for the remainder of the agreement period and THEN hand the car back, or take the negative equity on the chin when you part ex.

a bit of reading for you :

http://www.consumeractiongroup.co.uk/forum/vehicle-retailers-manufacturers/71506-vt-pcp-agreement.html

pay particular attention to post #11