This is how the PCP works when you reach the end of the contract, but what happens if you have to leave the contract earlier? Since cars lose value the fastest when they are new, slow down as they age, for most of the length of a car financing contract, you are in what is called “negative equity” – that`s if you need more than the car is worth it, so even if you make the car to the financial company at this point , you should always pay extra. for funding. In addition to repaying 50% of the total amount of financing, you must also have taken good care of the car, which means that there is no other damage than general wear. If you want to know exactly what is considered an acceptable condition, you should refer to the fair wear and tear guide issued by your financial company. To protect yourself from possible damage, you should take pictures of the car as of date when you return it. With a rental contract, you only own the car when you make the last refund, so you don`t have the option to sell it and use the money to pay the balance of your contract. However, you can return the car at any time with the “half rule” and terminate the agreement. If you don`t want to keep the vehicle, you can return the car. Many people then opt for another agreement on the PCP. If you are able to make your payments by car, talk to your financial company or lender as soon as possible.
You may be able to return the car or prepay the loan. Voluntary rebate means that you voluntarily return the car to the financial company, but you still have to pay what you owe — your debts don`t disappear by car. If you sign a voluntary handover form, the financial company sells the car and the money they receive goes into your debts, but you still have to pay it back until all the debt is repaid. You can ask the financial company to provide a billing figure at any time. This is the amount owed to pay the financing and become the owner of the car. As with PCP, the outstanding interest is recalculated, which means you pay less interest overall because you pay the balance earlier than expected. Once the refunds are complete, the financial company signs the vehicle with you. You don`t own it until all refunds are made, and it can be taken back if you`re late. HP is essentially a kind of guaranteed loan. If you take this route, the lender will sell the car for as much as possible. If this amount is less than your remaining financial balance, you can expect them to drive you out or send a collection office to recover that amount if you have not paid the amount owed before that date.
If you have damaged the car and return it half the rule, you will have to pay the repair fee. You will no longer have to make payments from the date you return the car. However, if your next payment has already been processed, you should contact the financial company for a refund. For example, if you have already repaid $10,000 and the total amount of funding is $25,000, you must pay an additional $5,000 to reach 50%. Before you make a financing deal, it`s worth making your money – and always reading the fine print. Some financing agreements charge extra to cancel prematurely, so it`s best to know about this early on. These are described in detail in the treaty. Maybe you want to end your PCP deal prematurely and keep the car.
Yes, you can terminate your agreement and use the half rule while you are late.