PCP early settlement.

[Howard G]

Hi,just starting a PCP deal and was wondering if there will be penalties for early settlement after a few repayments?

I have had £2000 Lexus incentive,will this have to be repaid?

 Thanks Howard 

[Moleman]

5 minutes ago, Howard G said:

Hi,just starting a PCP deal and was wondering if there will be penalties for early settlement after a few repayments?

I have had £2000 Lexus incentive,will this have to be repaid?

 Thanks Howard 

What does your PCP documentation say?

[mng70]

There shouldn’t be any penalties. I believe you have to pay a minimum of 56 days of interest when taking out a finance agreement with Lexus. I settled my finance before making the first payment. But as said above, check your agreement documentation. 

[royoftherovers]

1 hour ago, Moleman said:

What does your PCP documentation say?

Now, there is a really sensible and indeed, a pivotal question.

Not too dissimilar to "read the Handbook"

Great post Maurice.

[Moleman]

1 minute ago, royoftherovers said:

Now, there is a really sensible and indeed, a pivotal question.

Not too dissimilar to "read the Handbook"

Great post Maurice.

Thank you Sir, that is a complement worth having.

[rayaans]

All depends on documentation. VAG group let you keep the incentives and so does BMW. 

With Lexus I'd check the documentation and then if it's unclear on incentives I'd wait after 14 days and then settle it. 

[Howard G]

Thanks for your sarcastic comment royoftherovers,very helpful.

[PCM]

+1 for check the contract.

I assume they are different by manufacturer and possibly change also over time.

Perhaps contact in writing the "department" who arranged the "agreement'?

[NemesisUK]

8 minutes ago, Howard G said:

Thanks for your sarcastic comment royoftherovers,very helpful.

I think you got off lightly. It's the sort of question that screams "did you read the agreement before signing?" never mind before asking the question....

[Guest]

39 minutes ago, Howard G said:

Thanks for your sarcastic comment royoftherovers,very helpful.

I am afraid some people use an Internet forum to ask why you are using an Internet forum

[royoftherovers]

49 minutes ago, Howard G said:

Thanks for your sarcastic comment royoftherovers,very helpful.

My school motto was "Learning by Doing" Howard.

[Spock66]

58 minutes ago, Howard G said:

Thanks for your sarcastic comment royoftherovers,very helpful.

Why bother reading the legally binding contract when you can ask a stranger on the internet 😉

[Phil xxkr]

11 hours ago, Derant said:

I am afraid some people use an Internet forum to ask why you are using an Internet forum

And your personal answer is.....? 🤣

[Phil xxkr]

12 hours ago, Howard G said:

Thanks for your sarcastic comment royoftherovers,very helpful.

Perhaps Howard, had your question been posited in a different way it may have elicited a different response. For example, " I have recently entered into a Lexus PCP arrangement which has a £2k incentive attached. I am in the fortunate position of being able to afford a contract settlement early. Has anyone on here recent experience of doing this and what would you say are the pros and cons? Many thanks "

[cdmaskell]

I settled up on the day of purchase in March 22 and paid £196 interest. 

[Guest]

11 hours ago, Spock66 said:

you can ask a stranger on the internet 😉

Which basically is what this forum is😀

[Guest]

35 minutes ago, Phil xxkr said:

And your personal answer is.....? 🤣

Never had a PCP so wouldn’t feel qualified to answer

[Howard G]

Thanks Colin,very useful info

[Tonyw]

If anyone wants to pay off my PCP early then I am quite happy to be part of an experiment 

[Howard G]

Having re read the pcp agreement it still does not mention what/if penalties there are or if any Lexus incentives have to be repaid,so thanks for replies.

 

[rayaans]

1 hour ago, Howard G said:

Having re read the pcp agreement it still does not mention what/if penalties there are or if any Lexus incentives have to be repaid,so thanks for replies.

 

Just contact them by phone and see if they'll give you a settlement figure

[Dippo]

I believe the legal postion is that the lender cannot charge more than two months interest if you terminate early. This is from the Buyacar website:

"You can settle a PCP deal at any stage by paying the settlement figure - in other words, the outstanding finance balance at that moment in time - which you can request from your lender.

Make this payment and the car is then yours to keep or resell. The lender can only charge you up to two months' interest on the balance when calculating the settlement figure, so this should reduce the amount of interest you pay compared with continuing with the finance."

So if you've borrowed £25,000, and the Lexus Finance interest rate is around 4%, then even with the full balance of £25k outstanding the maximum 'termination fee' they can charge is £167.