@R0b Voluntary Termination

[parker93]

[MENTION=71570]R0b[/MENTION]

Hello,
I have a hire purchase agreement on my car - I didn't realise I had this until recently.
My garage have said that the car is in need of some repairs which I cannot afford (differential, catalytic converters - which have been taken out as they broke -, and a water pump) and that far outweigh the price of the car. The car has been serviced regularly and looked after well.
I have paid 71% of my finance, and have not defaulted once.
Would I be eligible for a voluntary termination for my finance? The repairs needed are no fault of my own.
Any help would be appreciated as I really need to buy a new car to keep working!
Thanks,
Holly

[R0b]

Re: @R0b Voluntary Termination

I'm afraid they will more likely than not charge you for the cost of repairs and I would think that a court is likely to side with the lender. You can't expect the lender to give you a roadworthy car and then have it returned in an unroadworthy condition. Your duty is to ensure that you do everything necessary in the course of running the car, that would probably extend to carrying out any repairs to ensure it is roadworthy.

Was the car brand new or second hand when you purchased it? If it was second hand you could argue that there was already some wear and tear which fell outside of your possession and so a reduction in the cost of repairs should be taken into account to that effect - however it might be a big risk to run that argument.

Equally, if the cost of repairs exceeds the total amount payable under the agreement then there's probably an argument to say that your liability should be limited to the 29% of the agreement that you've not paid as that would be what they would have received had the contract been fully performed. Anything above this would amount to betterment, in other words they would be put in a better position than the contract as originally agreed. You could perhaps tag on the end of this that the car will have some residual value so that should also be taken into account.

There's no harm in giving notice to terminate your agreement and then come to some arrangement perhaps on how much you should pay them but that will be a question for debate, and it wouldn't surprise me if they took you to court over it.

Perhaps you need to think about all options before you commit to one.

[parker93]

Re: @R0b Voluntary Termination

Hello,

Thank you for your fast response, I really appreciate it.

This is what I was hoping your response wouldn't be! But I understand. The car was second hand, yes, but it was in good condition and the issues have only come up over the past 3 weeks or so. Just an unfortunate luck of the draw I suppose. Doesn't seem worth the hassle of court etc. when I really need to get a new car ASAP.

I think I'll try and pay less for my resettlement if possible, take out a loan with my bank to pay it off, sell the car (I've had offers for around £2,000), buy a new one and chalk it all up to experience. I've definitely learned now to make sure I read things fully before committing - and not taking the sales persons' word for it!

Thanks again for your help.

[R0b]

Re: @R0b Voluntary Termination

Sorry to be the bearer of bad news and it is indeed luck of the draw and on this occasion you have to pay for it.

When it comes to the condition of the car and valuation, it is of course a subjective question but you also need to try and be realistic about it. I don't know how much the 29% of the remaining balance of the car amounts to but as I've said, you might want to consider all options before you commit to going down one route and be absolutely sure you are happy with it.

Just a word of caution about selling the car, obviously they are unlikely to know whether it has been sold or not but it's certainly going to be a breach of contract if you do that but also it could be construed as theft and the lender could bring a private prosecution against you if it catches wind of what you have done. It's more on the highly unlikely side as cases like that can turn out to be expensive and they would probably prefer to keep any claim within the civil courts as opposed to costs in both civil and criminal courts.