VT with black horse

[rspiston]

Hello, new to the forum.

After googling about the VT process many times I found the best info came from this site. This VTing is not straight forward and if anyone can offer guidance it would help a lot.
I have had the car for almost three years and never missed a payment. I have already sent the finance company a letter stating I want to vt my vehicle from the 23/05/2018. The template of the letter came from this site (thank you). I then called them on the same day to inform them. The guy on the phone was quite nice about it and cancelled the DD his end. I then received a pack in the post a few days later which include forms to fill out and a fee for the amount of £757.60 which I had to pay. I called them and asked what it was for, it was for insurance. They didn't go into much more detail but after I looked through all the original paperwork I found a RAC warranty document regarding GAP insurance. I called the warranty company and they said it was a 5 year term but since I have already almost paid for three years I would get the other two years for free which is good. Also the GAP insurance was put with my car finance as one monthly payment each month and I have paid over the 50% mark, so I should be able to vt??
Unfortunately Black horse have said it doesn't matter and I still need to pay this money before I'm aloud to vt. Thing is, I am taking the car to the auction site in a couple of days. I have all the important documents which I will leave with the car like mot certificate, service book, keys etc. The car has been cleaned and looks good.

So do you think I would be ok to drop the car off at auction?

Do I have to pay the fee?


Any help would be great

Many thanks

[R0b]

Hello RSPISTON,

If the GAP insurance was incorporated into the total price payable, then I don't think Black Horse have much to argue about. Under a hire purchase agreement your liability is 50% of the total price so if BH decided to add the GAP insurance to the total credit plus interest, then that is their prerogative but it doesn't change how much you are liable for. If you've read the VT Guide then you'll see that the definition of total price does not allow for the recovery of compensation or other damages for breach of contract.

BH as with pretty much all other financial lenders, don't tend to issue a separate agreement for the GAP insurance and if they had done so, then yes you would be liable to maintain the payments or pay the outstanding balance.

[rspiston]

Thank you for replying. But can they stop me from taking the car to the drop off location(auction house) and handing over the keys? Or would I have to pay the money first?

thanks you

[R0b]

Strictly speaking, they could refuse you taking the car but then you just put them on notice to collect it within. 14 days or you will dispose of it yourself at auction and deduct any costs from the proceeds of sale- that usually works.

[rspiston]

Hi again,

Just got off the phone to BH VT department. I asked them if I were to drop the car off at the auction site would I be liable for any damage? they said yes. She then went on to say that they did not accept my initial letter regarding me Voluntary terminating the car(the template letter you provide) because i have not accepted to pay this insurance charge of £757.60. She said I have to send them a letter which states that I will pay this extra £757.60 before they can proceed with the VT. regarding this money, I told her that the insurance comes out with my car finance as one payment each month and that I'm only liable for 50% of the total credit owed. Which I have surpassed but she said the insurance is separate and the reason I owe this money is because they pay upfront for this and I pay it off over the 60 months. I will post my agreement up if that's ok?

I can send them the second letter now which gives them 14 days to pick the vehicle up but the mot runs out on the 20th June (not sure if I can get another mot done).

[Chipsybg]

Hey Rob, is that the case for my agreement as well?
Sorry to hijack the thread, but I can't seem to get a response in mine.
I have the same issues as the OP, but with an extended warranty.

[R0b]

rspiston

Well clearly whoever you spoke to in the VT department doesn't really understand what they are talking about. Section 99(1) is the provision allowing you to terminate the agreement - it is an indefeasible right. In other words, you can terminate the agreement unilaterally i.e. you do not need the permission of Black Horse so long as that notice is given before the final payment is due. Nothing within Section 99(1) does it say that you can terminate the agreement subject to the creditors permission or subject to any other conditions. Quite the opposite, it states that:

"at any time before the final payment by the debtor ... falls due, the debtor shall be entitled to terminate the agreement by giving notice to any person entitled or authorised to receive the sums payable under the agreement."

Where does it say in that provision that you have to accept the creditor's conditions which in this case is to write to them to accept that you have to pay the remaining balance of the GAP insurance? The simple answer is that it doesn't. Black Horse can kick and scream and shout but it doesn't really matter because the choice to end the agreement early under this provision rests entirely on the debtor. If they choose not to process the termination, that is up to them but it doesn't change the fact that you gave notice to terminate the agreement and termination was valid and effective.

Just to be clear, the definition of 'total price' under the Consumer Credit Act is:

"the total sum payable by the debtor under a hire-purchase agreement or a conditional sale agreement, including any sum payable on the exercise of an option to purchase, but excluding any sum payable as a penalty or as compensation or damages for a breach of the agreement"

Exercising your right to terminate the agreement under Section 99(1) means that Section 100(1) is invoked. That provision limits your liability to 50% of the total price. So I go back to my original point, if the GAP insurance has been incorporated into the total price payable under the agreement then you do not have to pay any outstanding GAP balance. Also note above that 'total price' excludes sums which might be payable for compensation or damages relating to a breach of the agreement.

If you are going to write a letter to Black Horse then I might suggest you incorporate a couple of points:

1. I would suggest you mark your letter as a formal complaint to kickstart their complaints process which will mean setting out briefly the background leading up to this situation.

2. I would also suggest that you also incorporate the wording from the template letter about selling the car under the Torts (Interference with Goods) Act 1977. As the MOT is going to run out on 20 June I would strongly suggest you are open about this and make it clear that it will run out on 20 June and as such, it is reasonable to give them a short time frame to arrange collection i.e. 10 days instead of 14 so that you can make arrangements to sell it before the MOT runs out. If you are confident that the car will pass its MOT then you could get an MOT completed and then deduct that cost from the proceeds of its sale which is probably going to be more appealing to buyers if it has had a fresh MOT on it.

3. Optionally but perhaps something you should really consider doing, is to add some wording to the letter regarding your phone call with Black Horse today and what was discussed and what you were told. Explain to them that you will be making a subject access request under the General Data Protection Regulation for the disclosure of that telephone call between yourself and that advisor. They should take steps to ensure that the call is preserved to enable the disclosure of that recording to yourself and gently point out that as well as amounting to a data breach, Section 173 of the Data Protection Act 2018 makes it a criminal offence to alter, block, erase or conceal information with the intention of preventing disclosure of information that would otherwise be discloseable.

You should then send a subject access request to Black Horse. Unfortunately, there doesn't seem to be an email address or postal address so I suspect they might send you out a form to complete but they do have a number for their Group Data Protection Officer which is 0344 824 8888. So give them a call and explain you are wanting to make a subject access request, specifically tell the officer you are also seeking disclosure of the telephone call you have with the advisor today and that steps need to be taken to preserve that call in particular.

All in all, the above might be a bit of overkill but I prefer to go full on with these lenders so they know you mean business and they can't really bluff their way through you. I suspect that after all of the above, Black Horse will probably agree to collect the car but they might caveat the collection by saying they are still pursuing you for the GAP insurance. But that's a fight for another day, at least you would have won on them actually processing the termination and collecting the car.

If you want any feedback on any letter you have written, post up a draft and I will get back to you as soon as I can.

------------------------------------------------------------------------------

Chipsybg


Assuming your position is exactly the same, then it would appear that what I've said above will apply to you also.

[rspiston]

Thank you for all this information Rob. I have copy/pasted the draft below but not included the part regarding the subject access request only because I did actually record the call using one of those phone call record apps. Should I make them aware I have recorded the call?





FAO Complaints Department


Agreement Number xxxxxxxxxxx

Vehicle registration xxxxxxxx


I sent a letter to you on the 23/05/2018 stating I am terminating my finance agreement. Both my partner and I have made telephone contact with the voluntary termination department since the letter was sent. During one of the calls we found out we owed the sum of £757.which, I was told was for the insurances on the car. But it was during the last call I made when I was told that my initial Termination of finance letter was not accepted and that you could not process with the voluntary termination until I wrote a letter to you stating that I would accept liability for the £757.60.

Following this notice of termination and despite offering to drop the car off at auction as mentioned above. I have been told this is not possible and that I would be liable for any damage to said vehicle. Therefore I put you on notice that in accordance with section 12 of the Torts (Interference with Goods) Act 1977, unless you collect the vehicle by [14/06/2018], I will consider the vehicle as abandoned to which arrangements will be made for it to be sold at the nearest auction. I am lawfully entitled to deduct any associated costs in the sale of the vehicle including but not limited to, storage costs, auction fees, insurance and tax coverage. Furthermore, I cannot be held liable for any losses suffered as a result of the vehicle’s sale. Once the vehicle has been sold, I will contact you further to arrange for the remaining proceeds to be transferred to a bank account of your choosing. I should also make you aware that the MOT of the above mentioned vehicle runs out on the 20/June/2018.

[R0b]

Morning,

I'll take a look at this later today and provide some feedback as I think the letter could be made a little stronger in places.

[R0b]

Thank you for all this information Rob. I have copy/pasted the draft below but not included the part regarding the subject access request only because I did actually record the call using one of those phone call record apps. Should I make them aware I have recorded the call?

I've attached a draft example of the letter in word format and highlighted the relevant points in yellow you need to complete as well as the information at the top of the letter such as address details etc.

Use or amend as much as you want.

[rspiston]

Thank you very much. Very helpful. I have amended the letter and will get this sent out tomorrow. One question though regarding the insurances. I have attached a copy of the finance agreement. Would you say that the insurances are incorporated into the total sum?

Two red arrows point to the insurance repayments and the total repayments

[R0b]

Yes I would still say that they are still incorporated as one agreement. What Black Horse are effectively trying to argue is that the insurance is an entirely separate agreement to the finance for the goods and if that were the case it would be deemed as multiple agreements. If this document was considered a multiple agreement then Black Horse would be required under the Consumer Credit Act to provide separate documentation and if they didn't, then that would cause them to be in breach quite substantially. So I don't think Black Horse would really want to go down that route, but then again you are talking to people on the front line who probably don't have an in-depth knowledge about the quirks and nuances of the Consumer Credit Act, they just follow what they are being told.

When you consider if there are multiple agreements, the real question is whether the agreement (not the credit) falls into two separate categories. For example, two separate categories would be a restricted-use credit agreement, an unrestricted-use credit agreement, running account credit agreement etc. If parts of the agreement in question falls into the same category, then it is not a multiple agreement. The credit for the goods and the insurance in my view would fall into the same category of a restricted-use credit agreement.

Even if the separate was deemed to fall into two separate categories, then as I said above, Black Horse would be in breach for not providing separate documentation for the insurance and you'd be able to argue that point quite successfully.

Apologies for going a bit too technical but I thought I would clarify the point to make it clear.

[aardvaark]

But can they stop me from taking the car to the drop off location(auction house) and handing over the keys?

Is it not the case that auctions will not accept cars from private individuals that have finance "outstanding"?

[rspiston]

Thank you for all the help and information. The letter has now been posted.....will wait and see.

[rspiston]

hello,

Just an update on the VT. I had a call today from the customer services complaint department. Even after sending both letters they still do not accept the Voluntary termination. They said I need to accept liability for the insurances before they can proceed with the VT.I explained to them that under the CCA section 99

"at any time before the final payment by the debtor ... falls due, the debtor shall be entitled to terminate the agreement by giving notice to any person entitled or authorised to receive the sums payable under the agreement."

Even with the money aside, they still have to honour the VT. They went on to mention that they will continue as normal with the payments and that any missed payments can lead to a red mark on my credit file.



They still refused to budge. Not sure what the best step to take is? Maybe re-MOT the car and sell it?