Voluntary Termination advice

[Leetommy14]

Hi all,

This is my first post here, nice to meet you!

I am hoping to voluntarily terminate my vehicle finance agreement having reached the halfway point. I am reasonably well up on the ins and outs having been through the process before and having a tonne of grief from the lender. The process was dragged out for 2 years whilst the costs were debated. Eventually the ombudsman sorted them out and ruled in my favour, so I'm ready for a fight!

My question revolves around 2 things. My last experience was based around costs from a cosmetic standpoint. This time around I am slightly concerned about some slight noises from the clutch. In my head, a clutch coming to the end of its life should class as fair wear and tear, should it not? When they inspected my last car they did not look into it mechanically, and I presume once they sign to take it away, the car is legally theirs again and I am no longer liable, is that right?

Secondly, if I request a voluntary termination, when the inspector comes out, if I disagree with the cost and refuse the car to be taken, can the finance agreement simply continue? It's a big risk to take if they suddenly come back with an extortionate amount and I don't fancy another two year battle!

So what do you think guys, any advice?

Cheers all

[R0b]

Re: Voluntary Termination advice

Hello,

When you write to terminate the agreement you cannot then re-instate it. You would have to effectively enter into a new agreement though lenders might just simply carry on with the payments too - so you should be certain that you want to terminate before giving notice.

As for your question on damages, I suggest you read post #3 in the link below
http://www.legalbeagles.info/forums/...Dispute-(Cont)

I would also suggest you read this link below too if you haven't already.
http://www.legalbeagles.info/forums/...on-Your-rights

[Leetommy14]

Re: Voluntary Termination advice

Hi Rob,

I was hoping you'd reply as I've read a lot of your posts before. You seem incredibly well informed and very genorous with your time and assistance.

I've read both threads and feel pretty familiar with the workings of the process. Point two fully understood, thanks very much! In terms of the first point, from your personal experience, do you think that a clutch that is showing early signs of degradation falls within fair wear and tear? I would hope yes, seen as these are parts that wear down over time. I have done all the other bits and pieces to take care of the car within a reasonable level.

As I say, with my last experience they didn't check the car mechanically, is it common that the inspection is mainly cosmetic?

Cheers

[R0b]

Re: Voluntary Termination advice

Whilst the clutch might be fair wear and tear, you'd still need to make sure it is in a roadworthy condition and that it was possible to drive. I don't think you would get away with saying that if the car was immovable due to the clutch then its still in a reasonable condition.

They are unlikely to check the vehicle mechanically, it is almost always cosmetics exterior and interior, possible basics like brakes and changing gears but that would be about it. If the clutch is showing early signs then you might want to think about getting rid of it sooner rather than later because if the clutch does go before you hand the car back, you are unlikely to get away with saying its been returned in a reasonable condition and will be liable for the drop in any market value due to that.

[Leetommy14]

Re: Voluntary Termination advice

Yes that was my thinking around doing it sooner rather than later. The car still drives just fine, no loss in power, only a slight juddering/feedback through the clutch pedal when changing through the gears.

My other reasoning is that I am only a very poor interest rate. In the last two years my circumstances have improved somewhat and I can now get a better deal, so terminating and looking at a newer model could be beneficial, I'm just hesitant due to the voluntary termination potentially going wrong!

[Leetommy14]

Re: Voluntary Termination advice

HI Rob,

I have another quick question, I hope you don't mind?

If the agreement states that the customer is only liable for 50% when the car is returned, what happens if you've over paid? I'm curious, if the finance company were to say that I owed x amount of pounds for any repair work, and I've paid over 50% by more than that amount, would that cover the cost since my liability is limited to 50%?

I don't know if that's a daft question or not, I hope you can humour me!

[Leetommy14]

Re: Voluntary Termination advice

[MENTION=71570]R0b[/MENTION]

Hi Rob,

I hope you don't mind me troubling you for some advice again. I am planning on sending off my letter for VT tomorrow. Two quick questions, first one from my post above -

If the agreement states that the customer is only liable for 50% when the car is returned, what happens if you've over paid? I'm curious, if the finance company were to say that I owed x amount of pounds for any repair work, and I've paid over 50% by more than that amount, would that cover the cost since my liability is limited to 50%?

Second question - it seems common practice that the debtors leave the cars taxed and insured in the time between sending your VT letter and the car being picked up. Once the finance company receive the letter, is the contract terminated immediately, or when they pick the vehicle up? The reason I ask, if I am still paying to insure the vehicle, does that mean I still have use of it until it is taken? If not, why are we required to tax and insure it? It would make life a lot easier if I could use the car until pick up, I just want to make sure I'm not giving them an extra wiggle room when it comes to the inevitable letters back!

Your time and advice is much appreciated

Lee

[R0b]

Re: Voluntary Termination advice

Hello,

In answer to your first question. You can't recover any overpaid sums, this is what section 99(2) of the CCA is meant to prevent i.e. any liability accrued before termination will not be affected. You can argue that point and say that, the sums paid together with the return of the car in its current state adequately compensates them for their loss. A bit wishy washy but nonetheless a fair argument.

As for the second question, I tend to suggest the car is taxed and insured because not always the car will be sitting on private land. Therefore if it is on a public road it could get lifted by the police or the DVLA with their spy vans and in that case, it is probably seen as unreasonable to do that if the lender hasn't had any reasonably opportunity to collect the car, even more so if you have already paid tax and insurance for that month. Strictly speaking you are no longer liable but you do have an obligation to make sure the car is reasonably taken care of and not to damage it. Once you VT you lose the right to use the car unless express permission is given or is implied - but it is unlikely that the lender is going to know you have driven it should you choose to do so, though it is at your own risk.

You obviously have to make a decision yourself as to whether you cancel the insurance and tax but I would say the general rule of thumb is to give notice to VT, allow 14 days to collect, if they don't collect then a further letter citing the Torts (Interference of Goods) Act 1977 giving a final 14 days to collect or you will sell the car yourself. There is a template of this on the templates thread http://www.legalbeagles.info/forums/...tter-Templates

[Leetommy14]

Re: Voluntary Termination advice

[MENTION=71570]R0b[/MENTION],

If only there were more people like you in the world Rob! Your help is invaluable.

I have the letter all ready to send, although I'm going to ask if email is sufficient in the interests of speed. I actually spoke to them a week or so ago to get the jist of their side of the process. They informed me a pack would be sent requiring my signature. I had to laugh a little! I felt like telling them I have Rob in my corner, and he says no! Jog on!

Would you mind me getting on touch should I need any advice going forward?

Cheers

Lee

[R0b]

Re: Voluntary Termination advice

Notification only has to be in writing so that could be letter, email, fax or some other written method - the CCA doesn't mention a specific method but simply notice in writing.

As I am sure you have read, many lenders tend (or at least appear) to delay things when you give notice to VT, whether thats because they are so busy or they are just prolonging matters I do not know, but you just need to stick with it. As always, I suspect the pack will ask you to confirm a few details such as mileage and that you agree to pay for any damage to the vehicle etc. Depending on the lender, they may try to tell you that unless you sign the pack they aren't collecting the car. If that's the case, that is where the template letter comes in and this usually works however you would need to adapt the template letter to reflect what was said/discussed.

You are best to tag me if you need me as then I'll get a notification and try to remember to reply back. If you just post it is possible you might slip through the net if I am not around, particularly on weekends.

[Leetommy14]

Re: Voluntary Termination advice

Hi [MENTION=71570]R0b[/MENTION]

Got a reply today and phone call asking me to sign and return a form, as expected. Just wanted your thoughts... Here's what they sent.

I acknowledge receipt of your letter received [insert date here] regarding your wish to terminate the Conditional Sale Agreement referred to above.

There are a number of requirements prior to the vehicle being returned which I need to bring to your attention.

Please find enclosed a copy of your Agreement and I refer you to Clause 8 of the Terms of the Agreement which stipulates:

“You have the right to end this agreement as set out in the section headed TERMINATION YOUR RIGHTS. You must then at your own expense return the Goods to us at such an address as we reasonably specify, together with the registration document, keys, road fund licence, service history and test certificate in the case of a motor vehicle. If you have failed to take reasonable care of the Goods you must pay to us on demand a sum equal to the cost of putting them in a reasonable condition”.

Before the Goods are returned, an inspection will need to be carried out by an independent assessor to confirm that the vehicle is in an acceptable condition and I refer you to your obligations under Clause 5 of the Terms of the Agreement – Repair of the Goods:

“You must at your own expense maintain the Goods at all times ….in good working condition and repair in accordance with the manufacturer’s specifications, replace any lost or unfit parts and will be responsible for loss or destruction of, or damage to, the Goods. This includes dents, chips or scratches to the bodywork, trim or glass, stains, burns or tears in seating, linings or carpets, non functioning of any mechanical or electrical parts. All tyres must be in lawful condition. You must ensure that the service manual is kept up to date. You must reimburse us for all the expenses incurred by us by us arising out of the repair, preservation, storage, insurance, tracing or recovery of the Goods, or attempts at the same”.

You must also pay us the amount (if any) by which half of the Total Amount Payable under the Agreement exceeds the sums paid to us at the date of your letter. We will notify you of the amount due to us when the vehicle has been inspected.

It is important that you are aware, that your termination of the Agreement will be recorded with a Credit Reference Agency, which may adversely affect the terms on which you can obtain motor vehicle finance in the future.

To progress your request, please complete the attached document to confirm that the goods have been maintained to the required standards.

Should you require any additional information or if you have any questions please do not hesitate to contact us and finally please kindly return with the attached form, PHOTO COPIES ONLY the requested vehicle documents, in order that we can make arrangments for the inspection of the vehicle.

Yours sincereley



Credit Control Dept
020 7227 7517
PCF Credit Limited
------------------------------------------------------------------------------------------------------------------------------------------------

Form to be signed and returned to PCF Credit Limited

Asset: BMW 320D EFFICIENTDYNAMIC

Please find enclosed copy documents relating to the vehicle mentioned above;

• V5 Registration Documents
• MOT Certificate
• Service history record

So, what do you think? I'm not convinced on some of it, should I just skip it and proceed with usual instructions found on here?

Cheers

Lee

[R0b]

Re: Voluntary Termination advice

Clause 8 is not enforceable and contravenes section 173 in that it imposes a greater liability than set out in section 100 of the CCA.

The same applies to clause 5 which refers to the car being in 'good working condition' whereas clause 8 states 'reasonable condition' which is the same obligation under the CCA - so there is a conflict there with clause 5 imposing a greater duty than that of the CCA.

There's no obligation for you to forward copies of the documents onto them however if you wish to do that then go ahead or alternatively you could reply back and explain that you confirm that the requested documents are in your possession and you will provide them to the agent upon collection.

Just because you don't sign or return anything does not prevent them from processing the termination as the agreement is already terminated, so they just simply need to collect their car. If they don't collect it then they can only blame themselves if they incur any further loss or damage to the vehicle.

Not sure why they would notify you about paying one half of the total amount payable since they should already know if you have met this threshold or not.

[Leetommy14]

Re: Voluntary Termination advice

Thanks so much [MENTION=71570]R0b[/MENTION]

My next direct debit is due first of November. Can I cancel that now or do I have to wait 14 days or anything like that?

You sir are a legend...

[R0b]

Re: Voluntary Termination advice

Yes you can cancel that now, provided your termination letter stated that the agreement ends effective immediately.

[Leetommy14]

Re: Voluntary Termination advice

Hi [MENTION=71570]R0b[/MENTION]

I replied to them with an email pretty saying the same as you added above. I've had no reply since. I am buying another car tomorrow and I will be needing to transfer my insurance over. Am I within my legal rights not to be insuring the car any more since the agreement has terminated? I can't see why I wouldn't be but I'm wanting to cover my bases.I'm planning to email them again tomorrow letting them know it will no longer be covered although I am willing to store it for another week. Would that be OK do you think?

Thanks in advance