Cancelling my car finance

[Wezwoz]

Hi I’m new to this so any help advice would be great
I have bought a car on finance from s company called Fowler’s finance (they’ve been ok so far just read some reviews and now I wish I hadn’t felt with them)
I took the car out on a 3 year contract at 197.17 a month for 36 months as I’ve got bad credit from the past Fowler’s were the only company I could go with
My problem is I’m 11 month into my contract and my circumstances have changed and I can no longer afford the payments I have spoke to there senior collections officer who was quite nice and has agreed a reduced payment for 3 months which I’m in the second month of £100 a month then a review after
Myself and my wife did ask at the time if we could end the agreement early and he cam up with that plan of reduced payments for 3 months as above myself and my wife have been talking and we’re going to struggle once the reduced payments have finished but we don’t know what to do next
I’ve looked st our agreement and it states we have to pay 50% without any fees before we can send the car back now I know we haven’t payed 50%
Can we still send the car back and pay the remaining payments up to the 50% or do we need to keep the car till we’ve paid the 50% and is there any chance of asking for reduced payments to pay up to the 50%
What time of action do I need to take is it a volunteered termination or a volunteered surrender
Any advice would be great thanks in advance

[EXC]

Re: Cancelling my car finance

Hiya

I'll give [MENTION=71570]R0b[/MENTION] a shout for you.

[Wezwoz]

Re: Cancelling my car finance

Thank you

[Wezwoz]

Re: Cancelling my car finance

I’ve just noticed on my agreement that it’s the car finance company Fowler’s is the dealers

[R0b]

Re: Cancelling my car finance

Hi there,

It really depends on whether you need the car or not. If you require the car then terminating the agreement voluntarily is probably not going to be the best way as you have to hand the car back and will be stuck without one. I would perhaps suggest that you discuss this further with Fowlers and see if you can keep the £100 arrangement and review it at 6 month intervals or something to that effect.

However, if you can source an alternative mode of transport in the meantime, then VT might be the better option as you will be limiting your liability to 50% as you have rightly pointed out. Exercising your rights in these circumstances can sometimes cause difficulties because some lenders are wrongly (and in my view unlawfully) saying that they won't accept termination of the agreement unless you make up the remaining balance to 50%. For starters, you can exercise your right at any time before the final payment is due, meaning that it is an indefeasible right and cannot be taken away from you. Secondly, the limitation of liability is set out in section 100(1) and explains what you will be liable for. In plain English this means 50% of the total amount payable including any sums that are due immediately before termination which is effectively your instalments.

There is nothing within these provisions that suggests that your right to terminate is contingent upon you paying 50% of the total amount nor does it say that you must make up the difference immediately after termination. This is because it would be contrary to the FCA rules which regulates lenders like Fowlers Finance. There is someone else on here who is in a similar position to you and having difficulty but I explained the relevant rules and guidance in that thread which you can have a read of at post #16 - http://legalbeagles.info/forums/show...ce-please-help

If you decide to VT then there are templates on here to assist you and generally you are not obliged to give any reason for your termination but in this case you might want to include this as the reason for terminating and making reference to the fact that you have tried to make reduced payments but it is still unaffordable. Happy to look over any draft and provide feedback if you post it up.

As an aside, please be careful of the phrase 'Voluntary Surrender' which lenders and consumers alike use interchangeably. There is a subtle difference between the two whereas voluntary termination is a right enshrined in law and limits your liability, voluntary surrender however, means that you agree to hand the car back, terminate the agreement mutually and the lender will then calculate your liability based on the following:

The total value of the agreement LESS:

1. The proceeds from the sale of the car (this is usually sold by auction fetching the lowest possible price);
2. Any sums you have already paid to date;
3. Any deposit paid; and
4. The option to purchase price (the balloon payment)

You would then owe the difference which is typically more than it would be if you exercised your right to VT. Therefore, exercising a voluntary surrender should usually be last resort where everything else fails or VT is not possible.

[Wezwoz]

Re: Cancelling my car finance

Many thanks ROb I’ve just received an email from the senior collector and he’s said I can voluntarily TERMINATE and pay up to the50% at a reduced rate I have saved the email in case they change there minds

[R0b]

Re: Cancelling my car finance

That's good news, do retain all correspondence just in case something happens or they refuse to honour what they have previously said and you have ended up relying on it.

So you now need to come to some arrangement that's affordable to you and within your means but also acceptable to them. They might ask you to fill in some kind of budget sheet that lists absolutely everything you can think of, though it might be geared favourably towards them so do not rush into anything and take your time. I am not personally a fan of filling in a budget sheet as most of them are quite intrusive, you may want to consider adapting and keeping it fairly high level or not fill one in at all.

This might get their backs up and may argue that your being unreasonable, so you will need to consider what to do if these circumstances come up but either way, I think you have the result you wanted. Just make sure you give notice in writing to VT as you must do this in order to afford yourself the limited liability under section 100 of the CCA.