VT help needed.

[Woollster]

Hello,

I need some help getting my head around the situation I find myself in.

I had finance with Moneybarn for a vehicle and have paid over half of the total agreement, which Moneybarn has agreed. The vehicle has been return and inspected, and no damage or extra charges added.

But, they are now insisting I owe one more repayment (£409.91) because in the contract it states: "If you voluntarily terminated your agreement you are liable for half (50%) of the total amount payable under your agreement, plus any overdue repayment installments (even if you have already paid up to the half amount)."

It's the overdue payment that's the issue, my invoice date was the 11th of every month and payment date then 30/31st of that month and I VT'd on the 15th. So they are claiming I owe the repayment because it was overdue at the time of VT.

I thought as long as I have paid over 50%, I didn't owe anything regardless of whether its overdue or not?

[Phaeton]

R0b Interesting one, which is the date that matters the 11th when the invoice is raised or 30th when payment is made, I suspect the invoice date which means it is due, but I do think it's being very harsh, although it appears finance companies don't have hearts especially when it comes to VT

[R0b]

Hello

First of all, the order of precedence is that legislation trumps any contract and its terms and conditions. So if there is a conflict between the contract and the legislation (CCA in this case), then it does not matter what the contract says because the legislation will prevail. I have to admit I needed to do a double take on the relevant provisions of the CCA just to be absolutely sure although I do see their point of view.

Anyhow, you are right in that the starting position is to take the view that when you VT, your liability is capped to 50% of the total amount payable under the contract, but for namesake, let's explore what Moneybarn are alleging.

Section 99(1) gives you the right to terminate at any time, and here I don't think this is in dispute.

Section 99(2) however, clarifies 99(1) by effectively saying that although you can end the contractat any time before the last payment becomes due, this does not absolve you of any liabilities prior to the termination of the contract. So for example, any installment arrears or if the car is smashed into pieces its a write-off, you would still be held liable despite you exercising your right to terminate.

Section 100(1) says that when you VT, you are liable for the aggregate (the total) amount of the sums paid and the sums due immediately before termination.

So, applying the above to your situation, the question is whether the instalment was actually due - I suppose it depends on what is meant by the word 'due'. Literally speaking and if you take a dictionary definition, 'due' is something that is expected on a particular date or time. So irrespective of the invoice arriving earlier, the payment is still due on 30th or 31st of each month. The invoice is simply a courtesy to let you know that it has to be paid by that date or it might be a term of the contract that they will invoice you prior to the payment date.

By the same token, if you take their contractual wording (assuming that is correct), it refers to any 'overdue' payments. If you gave notice to VT on 15th and allow 1-2 working days for it to be delivered, assuming it was first class, then the contract would have terminated prior to the 'due' date, being 30th or 31st of each month so the instalment could not have been overdue.

That said, I suppose it might be possible to argue that the payment was overdue at the time of termination if instalments were made in arrears. Even if that was the case, Moneybarn should only be entitled to part-payment because you terminated half-way through the month (but see below).

The alternative argument (which is made by other lenders like Mercedes) is that Section 99(2) suggests that any liabilities before termination are owed regardless of what Section 100(1) states, hence their contractual wording suggesting that it does not matter if you have paid 50% you still owe any overdue instalments.

In either case, my opinion is that both arguments would fall subject to Section 100(1) in that it explicitly says that by exercising your rights under Section 99, you will only pay 50% of the total amount payable. As mentioned already above, these sums includes the sums paid to date and any sums due immediately before termination. I think it goes without saying that any sums after termination won't be recoverable.

Apologies for the lengthy post but thought I would clarify this point in case there are others with similar problems. Of course this is my view but as always there will be two sides to the argument, though I just can't see how you were 'overdue' when the contract ended before the payment due date.

Obviously it is you in this situation so you are free to disregard what I've said and pay up if you want to. There are risks in that they may affect your credit rating by reporting late payments or defaults but I've not seen Moneybarn do that before and it would be decent grounds for breach of data protection which could hold them liable for more than what they are claiming anyway. Ultimately, the decision is yours to take.

Hope that helps.

[Woollster]

Thank you for your responses, I'm going to stick to my guns and not pay it. 50% of the total borrowing was £13,722.34 and I paid back £16,806.31 before I was in a poisition to have to VT.

Thanks again, I will update post with Moneybarns response.