Driving to Europe with car on finance?

[Tony Hoyle]

Given 90% of new car purchases are on PCP and going to europe isn't particularly uncommon, I'd be extremely surprised too. . it'd be chaos.

Looking around there's a few that have a 90 day limit (Which is fair enough, insurance starts to ask questions if you're abroad for longer than that).. Tesla has no limits.. found one with 30 days, which is a bit short IMO (two two week holidays and you're at the limit).

CA seems the outlier with no foreign travel at all.

 

[MrT3]

So I've had a quick look at Tesla website and indeed it seems that PCP financing is no longer done by Tesla Finance Ltd now, but CA Consumer Finance then? Curious that they are re introducing third parties for something they were previously doing in house (at a much higher rate indeed...)

The rate is different depending on the vehicle, where I'm assuming Tesla are milking the early M3H buyers but only with finance, without any manufacture contributions. Difficult to understand how you can have 1.8% and 9% for a product at roughly the same purchase price from the same finance company. Seems to be the making of another PCP scandal.

 

[spdpsba]

Is this a usual term with Tesla lending partners?

Now I have written to the CA auto finance, will update once I get a response.

Do distance selling regulations apply on this? Though it is finance they are stopping me from taking the car

 

[spdpsba]

I jsut checked CA finance agreement - yes they want us to get the permission. So I am going to ask and if they don’t let me I am going to do as what you mentioned.

Good to warn people off CA.. I

Tesla directed me to CA Auto Finance. It was done over the phone with the representative from Stockport who had arranged the test drive earlier in the day. I did notice some other options in the app, but he said to go to CA for the 1.8% APR offer.

I just got a response from CA finances and Yes you are allowed to take but need to let them know, see the email below.

Thank you for your email.

You do have the option to take the vehicle to europe but you do need permission from us to do so due to the vehicle being owned by CA Auto Finance UK Ltd.

At the time you wish to travel, we would need the following information:

• Make and model of the vehicle:
• Vehicle registration:
• Location of your visit:
• Duration of your visit, including departure and arrival times:
  

  “Until the vehicle is clear of finance, the vehicle is not allowed to be taken outside of the united kingdom due to the vehicle being owned by CA Auto Finance.”

  Hope you can clarify with whoever sent you the earlier response saying you are not allowed to take the vehicle.

 

[Paul Thomas]

on CA AutoFinance's webpage, there is this little section in teh FAQs

Am I able to take my vehicle abroad?

Under the terms and conditions of your agreement, you will need to obtain authorisation from us as the finance company before you take your vehicle abroad. If you would like to take your vehicle abroad, please contact our service centre department to discuss.


Doesn't say no, so you can ask!

 

[FastLaneJB]

1,8%.. that seems absurdly cheap especially with recent rises in interest rates. At that rate you could take the money and stick it in a high interest account and make money..

I guess they achieve that in part by having very restrictive policies.

This is a trick car companies do to discount their cars to bump demand without reducing the list price which can hit depreciation. Tesla is learning from their large price drops the other year I think.

They are only doing this on the Y, 3 and LHD S and X are all 9% APR. I expect 3 to drop in a bit once initial pent up Highland demand vanishes.

 

[FastLaneJB]

If its a PCP then technically its not entirely someone else's car its part yours.

That’s not true, there is only one legal owner of the car and it’s not you. If you fail to pay your monthly payments, they can take the car back and you won’t get any money because all you are paying for is the depreciation and even then earlier in the agreement it will have depreciated more than you’ll have paid.

I see it more that you are long term renting with an option to buy at any point if you pay the remaining amount.

 

[Jason71]

That’s not true, there is only one legal owner of the car and it’s not you. If you fail to pay your monthly payments, they can take the car back and you won’t get any money because all you are paying for is the depreciation and even then earlier in the agreement it will have depreciated more than you’ll have paid.

I see it more that you are long term renting with an option to buy at any point if you pay the remaining amount.

HMRC don't see it that way. They see part of the payment as a lease payment and part of it as going towards paying for the car line a loan repayment. That is why YOU get the V5C on a PCP. You are effectively buying equity in the car though it may well be depreciating faster than you are paying.
Its like owing half a house with an interest only mortgage on the half you own and renting the other half. Main difference being at the end of the mortgage term the house will probably be worth more than you paid for the house. Best you can hope for with a car is that its worth more than you paid in to that point.
You own a house with a mortgage but they can still take that off you if you don't make the payments

 

[FastLaneJB]

HMRC don't see it that way. They see part of the payment as a lease payment and part of it as going towards paying for the car line a loan repayment. That is why YOU get the V5C on a PCP. You are effectively buying equity in the car though it may well be depreciating faster than you are paying.
Its like owing half a house with an interest only mortgage on the half you own and renting the other half. Main difference being at the end of the mortgage term the house will probably be worth more than you paid for the house. Best you can hope for with a car is that its worth more than you paid in to that point.
You own a house with a mortgage but they can still take that off you if you don't make the payments

Houses are different. You are the legal owner but the bank has a legal charge on the property until the mortgage is paid off, hence they can apply to reprocess it.

Here you are not the legal owner, the finance company is. Being the registered keeper does not mean you own or partially own the car.

Doesn’t matter really how HMRC see it. Unless you pay the car off fully, it’s not yours in anyway.

 

[Tony Hoyle]

PCP is an HP agreement (it even says that on them when you sign them). You're only hiring the car until the end of the agreement - which on PCP is the when the balloon payment becomes due.

That's why with cars you have owner and registered keeper.. you're the keeper (ie. he one who is responsible for it day to day, pays the insurane, fines etc.) and they're the owner.

 

[spdpsba]

Being the registered keeper does not mean you own or partially own the car.

Doesn’t matter really how HMRC see it. Unless you pay the car off fully, it’s not yours in anyway.

Anyhow, the issue has been clarified with CA finances and they are not objecting taking the car to Europe. We just need to inform them. I have also informed them I am happy to involve the ombudsman if they object taking the car to Europe under PCP agreement and ownership cover. A restrictive ownership needed to be explained upfront by the sales people which did not happen in this. Just including that in T&C isn’t enough.