Posting here as I feel like I’m about to become an interesting data point as I’m in the process of voluntarily terminating a PCP agreement. There’s not much information about this online, so I’ll share what happens to my credit scores as the process continues.
As for why I’ve decided to do this, I bought the car at the end of covid during the supply chain shortage second hand when prices were inflated. I’m (almost) at the 50% point of paying back the total amount payable so I have a very small liability to cover, but ultimately even if I wanted to keep the car, it would have saved me thousands to VT and then buy the same car again of the same age and condition. I mean I can see it up on Manheim’s auction site now. I could probably track it down and buy it again for much less than the outstanding credit balance.
I didn’t do that in the end, I got a Polestar 4 as I posted in the other thread and the total I’ll pay back over the course of the lease is significantly lower than how much my XC40 cost me over 3 years.
Anyway, back to credit, here’s what my scores currently look like. The only impact to it will be my mortgage and a 2k-ish monthly AMEX balance that’s always paid off in full.
I’ll be interested to see how this is reported to the CRAs and what it will do to my scores.
I did this years ago with one of the cars I had. I didn’t experience any adverse effects, other than on my credit record it had shown I’d terminated the agreement early.
The car company were more of the problem, the alloys were diamond cut and all had milky lines. They wanted to charge me for repairing all of them. I refused as there was no physical damage to them and I’d not hit or curbed them.
OT but this is a very common problem with diamond cut wheels and unless you are super careful water will always get under the clearcoat and cause white worm (Milky lines) and can start from a very small stone chip to the wheel. I’ll not have Diamond Cut for this reason
Nice, I’m hoping this will all be straightforward. I’m still waiting for the condition report at the moment. Manheim have it listed for sale as a B-grade which is decent so I’m hoping it won’t be too costly.
The finance firms here are funny though, it’s a legal requirement for them to offer the option of a VT but it can end up being a costly option for them. The process I’ve been through with VCFS (Santander) has had a lot of friction which seems to be designed to put people off going down this route whilst staying the right side of the law.
Just thinking back about 8 years ago when I was a lot less financially wise, I had negative equity on a PCP and was buying a new car from the same manufacturer using the manufacturer’s finance company. I asked the dealer about just using the VT option, but they told me not to and to pay the shortfall instead. I don’t have any of this in writing so it’s not even worth the time or effort, but thinking back, I’m sure the ombudsman would have been interested to know more about the advice I was given at the time.
The companies don’t like the VT option especially if the car is in negative equity, as with PCP you’re only paying the depreciation, so they often lose money when it goes to auction.
I didn’t ask the car company for advice, mine was in negative equity plus the dealer messed me around.
It was manheim who dealt with mine, they came to my work, did the assessment there and then, gave me the paperwork and took the car. It was all very easy.
It was only later that the finance company tried to get more out of the deal eg the alloys and mileage. I suspect because they lost money.
I used to have a ‘Wave’ credit card. The company behind that card decided to withdraw from the credit card market and so announced they were closing down although customers would still be liable to paying back whatever they owed on the card.
I cleared the card early last year and contacted them to say I’d clear it and to close my account. They replied to say that as they’d withdrawn from the market there was nothing to close.
I then got a letter from Perch Finance in Oct saying they’d purchased the debt from Wave, although they did note that there was no debt owed to them by me as the account balance was zero so no action needed to be taken. I’ve kept the letter ‘just in case’ but I thought nothing more about it so just forgot about it.
Then I was checking my Equifax credit file - and noticed a negative marker on it from a ‘Debt Collection Search’ by Perch.
So, 2 questions:
Is this going to have a high impact on my credit file?
Good for you. My first one was Paypal credit at £250, then hopped onto Capital one who also gave me £250. Capital one refused to increase limit after a year of heavy use and paying back on time. I closed then then got Vanquis at £500. these were also not interested in giving me anything higher. Then boom Lloyds at 7k for the start.
The only thing “credit builder” cards build is a repayment history so you can get better deals elsewhere, but never a for the limit with the builder cards.
Give it about 6-14 months of on-time payment history, you’ll start getting much better deals.
They kept claiming we shall increase your limits up to about £4k if you use it responsibly.
At that time even Lloyds was always saying they could not offer me one but could give me a personal loan. It never made sense at all. I even one time took a £4k loan from Lloyds that I paid back in 3 months after sorting myself, unsecured. It is on the credit can they drew the line.
From personal experience - what banks do you guys find to be most lenient with lending / credit limits once you’ve had your main account with the for a while? I’m starting to consolidate my accounts and this is something I’d like to keep in mind
My current setup with HSBC is getting paid into my global money account and then I transfer to savings and current, and I don’t think they are registering it as income
