PCP vt question

[oli800]

i have a car bought in August 16
78000 value with 1k deposit into the car
I pay 1220 a month on the car, when would I be potentially able to VT?
settlement is currently 60500
cheers

[oli800]

5.9apr

[R0b]

Hi Oli

Sorry I didn't get back to your PM. There will be a box in the contract usually at the front of the document which says "TERMINATION: YOUR RIGHTS" that will tell you the amount you have to meet. Assuming £78k is the all in value including interest and other one off payments, then its 50% of that which is £39k less your deposit will mean £38k.

[oli800]

Hi Rob

just had a look I thought it was PCP however it’s an unregulated HP agreement with blackhorse

does this waive any VT ?

[R0b]

You'd probably have to upload the contract and the terms so I can actually see the contents. From memory, the FCA took over the regulation of consumer credit and the CCA in general. There used to be a financial limit of £25,000 and anything under was considered to be a regulated agreement however, that financial limit was removed some time ago.

Anyway, I've had a quick scan and the relevant provisions for regulated and unregulated agreements are contained in the FSMA 2000 (Regulated Activities Order) 2001, as amended. Rather than set out all of the exemptions, I've attached Article 60H which sets out the criteria for complying with an exempt agreement for High Net Worth Borrowers. Have a read of it and you will need to confirm whether it complies or not. If it doesn't then it would not be an exempt agreement and therefore a regulated one.

Any questions let me know.

[R0b]

Hi Oli

The declaration statement for businesses and so the statement looks to appear the same as Appendix 1.4.8 of the FCA CONC Handbook. Was the purchase done for personal or business? Did the sales person know or have suspicion that it was for personal use and not business use - is there any evidence to back up that story?

Article 60C relates to business exemption, which I have attached and again is very similar to Article 60H above. I would point out paragraph 5 where it says that the agreement is not exempt if the lender or someone on behalf of the lender and in connection with the agreement, knows or has reasonable suspicion that the agreement is not predominantly for business purpose. If that situation applies then it will be a regulated agreement and the VT provisions will apply.

[oli800]

Hi rob

i had a car which was stolen in my personal name and then was Sold when I received back, and when applying for New finance was told it should be done in company name as finance probably wouldn’t pass in my personal again as such a large loan when other wouldn’t have cleared off my credit rating in time.

we did it in business name, however every payment has been taken against my directors loan account and I use the car for personal miles now and commuting to and from work. I have a secondary car at work solely for work purposes as all branded up.

what do you recommend

[R0b]

Well if you had intended to take it out in your personal name but were told that you should take it in the name of the business instead, that might imply that the agreement was not predominantly for business purposes and therefore paragraph 6 of Article 60C above is engaged. In other words, the agreement is not presumed to have been entered into for business purposes and it would be up to Audi to show otherwise. If they can't then it would become a regulated agreement and the right to VT would exist.

The difficulty you might have is proving your case. I would imagine that you have to show that there was some evidence to give reasonable suspicion that it was not entered into for business purposes. For example, if you had a witness with you at the time these discussions were had or if you got something in writing to that effect then that would shift the burden of proof to Audi to prove otherwise.

Give the financial value of the agreement, this is not a decision which should be taken lightly and I would suggest you seek some independent legal advice. I would expect Audi to put up a fight particularly if there is no solid evidence to support your case. There may be an arguable point that, you having paid from your director's loan account could be inferred that it was not predominantly for business purposes, but only a court would be able to make that decision.

I know it sounds quite obvious in hindsight, but whenever in doubt or if something doesn't seem to be right, it's always best to get any questions put in writing so you have the evidence to back up your story should something go wrong in the future. Obviously in the heat of the moment, you don't think about that but it is crucial. Also, if you believe there is documentation which indicates any particular reason or purpose for the vehicle suggesting personal rather than business use might be of assistance. I would probably suggest making a subject access request rather rather than being direct and arousing suspicion.