terminate PCP early - can I cash in RFL

[mash]

I'm terminating a PCP on my C-class slightly early and am intending to keep the RFL. I've read through the T+C's regarding what's expected when handing the car back and no mention of valid RFL, so I'm assuming that whilst they will probably query the lack of tax, I'm quite entitled to do so ?

Just thought, if the guy turns up to collect the car, would he be wcovered eg 'trade plates' allowed to drive a car without tax ?

Cheers for any experience anyone can shed.

 

[Tilly]

I've never had this question asked before to be honest and its a bit of a strange one! As far as I'm aware they will need tax, if you send a car back that's overdue a service, they will invoice you. I don't see why this is any different.

May I ask though... are you paying a settlement figure to hand the car back or just voluntary terminating? If it is the latter... I wouldn't do it to be honest

 

[mash]

thanks for the reply. Yes service needs to be upto date and current MOT if required, min 2.5mm on tyres etc etc all detailed in the T's + C's, but no mention of the tax. At the end of the day I'd rather have the £60 in my pocket and spend it on the kids, than 'give it away' to the lease Co or whoever, as you can bet someone will cash it in before it goes to auction or sits on a forecourt somewhere.

Car is going back 5 months early under the 50% rule, thus nothing more to pay. TCO still works out reasonable for the duration as had car 2.5 years. I always hand the cars back slightly early under 50% rule if the TCO works out reasonable for the duration, which it usualy does due to savings on not having to pay for that one extra service and/or tyres versus going the full term (I have a spreadsheet that works it all out for me). Credit companies will point out it that it is noted on file, but not in a negative way and too be honest never had a problem over all the years I have contracted/leased cars.

Cheers

 

[Dieselman]

Who paid for the last RFL. If it's part of the lease deal then it belongs to the supplying company, if it's you then I suppose you can do what yopu like with it.

 

[Tilly]

You need to be careful because in recent years it has caused more problems... I work for a lease company and it can get messy because finance companies are wising up to it (well... the underwriters are at least and if a deal goes sour they get a bollocking). You should never VT on a car unless it has a serious reason to merit it because as soon as you come across one underwriter thats switched on they won't be happy and declines wouldn't be a surprise. Once its been declined the next underwriter will wonder why you were refused finance. They say its not meant to go against you in a negative way and strictly its not but voluntary terminating is a bad thing to do because as mentioned, if a deal goes sour the underwriters take the brunt of it. At the end of the day if you're handing it back early rather than paying an early settlement figure you're doing this for a reason - to avoid costs, either way someone has to pay this money somewhere whether its you or the finance company but in most cases the underwriter will pick up on it and all it takes is for them to be having a bad day. (I'm not being an **** btw its obviously your choice) but if you were an underwriter and knew this person was constantly VT'ing on contracts would you be happy to give them the go ahead if you thought it would come back to bite you? Just be careful mate because its fine up until you get the first decline and one is all it takes

 

[Tilly]

And Dieselman - On a PCP it is the customers duty to provide their own road tax after the initial 12 months given at registration except in cases where you have something like a freechoice credit sale which is basically a PCP but provides road tax for the full duration, hence the different name

 

[Rory]

I didn't know you could do a VT under the 50% rule on a PCP - I thought that only applied to HP.
How do they work out the 50% on a PCP - is it 50% of the total cost (monthly payments plus final value)?

 

[mash]

Hi there - I hear what you are saying, thanks for the info.

 

[mash]

you have raised some very good points, I do wonder if we may be coming to the end of the easy cheap credit era and yes the finance companies may well start to get more choosey, so we have been warned.

useful 'insider info' - thanks