FCA Automotive Voluntary Termination (Value Added Products) - Help!

[mtol]

Hello All,

Firstly thank you so much, i have been wanting to VT my fiat 500 for a while as i need a bigger car and this forum has really helped in shedding light and clarity on the process and what to be aware of.

I requested for a VT last week, as i was a few hundred pounds away from the half way mark ; i received an email asking me to pay £817 for the Value Added products. using the expertise shared here, i issued a reply noting that it was all in one agreement and that after the half way mark, according to Section 100(1) that i only had to cover half of the total amount payable. i received this response from FCA.

"The Value Added Products are separate legal contracts in their own right. Please refer to your payment structure below which confirms they are separate from the hire purchase element, or “Goods”, element of the loan:




Your monthly instalment is also split into two parts:



I can confirm that when you purchased the vehicle, you also purchased the Value Added Products (VAP’s). As the finance company, FCA Automotive Services only provide the finance for the asset element of the loan which is the vehicle. Any VAP’s are provided by third party companies and are paid for in full by ourselves at the point of sale. In essence, we have loaned you the money for the GAP Insurance and any remainder is to be repaid to ourselves. By signing the contract, you have accepted the liability and agreed to pay sums due in full.

You should have also received documentation from the companies/providers directly either at point of sale or via post detailing your agreement/policy details."

Do i have any foot to stand on? i have used the CCA wording and the total amount payable argument but FCA don't seem to budge. I have been informed i have 28 days to pay or a default will be on my credit.

Help please.

[R0b]

Hello

What you've uploaded there doesn't seem to me that the GAP is a separate agreement to the car credit. All that really tells me is a breakdown of the costs for car credit and GAP insurance. The table then goes on to explain the total amount payable and combines the car credit with the GAP insurance.

Have you been paying the £179.61 taken from your account or has been two separate payments, one for the car credit and one for the GAP?

If as they suggest it is two separate agreements then it might fall under section 18 of the consumer credit act which means the GAP insurance is to be treated as a separate agreement and therefore requires separate documentation. If they didn't provide the separate documentation it becomes an improperly executed agreement and only enforceable by an order of the Court.

It seems to me that based on the above there is no evidence the agreement is two agreements, rather it is rolled into one but that depends on how payments are apportioned and what the terms and conditions say.

[mtol]

Hello Rob, i have been making only the £179.61.

In an earlier email, they informed me that
" In relation to the outstanding amount for the GAP insurance, I would refer you to the attached terms and conditions and specifically Section 14 – Separate Agreements. This refers to the two separate loan types, the HP loan and the insurance/warranty/gap/other loan, within your finance agreement that you have signed with us and shows conclusively that the ‘other loan’ is not included in your right to voluntary terminate. It also reconfirms that payments made towards the ‘other loan’ are not included in reaching half the total amount payable on the HP loan for your vehicle. You have already agreed to pay for these products in full by signing your finance agreement and when an agreement undergoes a voluntary termination, they fall due."

I have uploaded the agreement copy which has the T&Cs

[Amethyst]

Have they given you a figure for the GAP ?

[mtol]

Amethyst Yes, i believe £1293 in total, i have £814 outstanding.

[Amethyst]

Have you paid 26 months ?

[Amethyst]

Actually the agreement is only 24 months old ? Have you paid any extra to reach the VT figure ? ( and what was the VT figure used ?)


Have they sent you the rest of the terms ? ( under CHARGES on the agreement it refers to lots of clauses which aren't in those pages ) and their email refers to clause 14 - which also isn't on that agreement.

[mtol]

Amethy5t Hello, the full contract does have section 14.

Separate Agreements
14.1 the provisions and clauses of this document have been written in the plural because it is designed to be used as an HP agreement combined with an insurance, warranty, gap/ other loan.


unsure what to do now.

[Amethyst]

Hmmm they seem to have covered their arse on that, however you can still VT the car without paying those 'value added' products as they have stated themselves they are separate agreements. So in order to VT the car you only need pay half the car loan or £6969.15 as detailed in the termination rights.

Their figures do not add up though... the Total amount for the 'goods' is £14559.21 and 50% of that is what SHOULD be the VT figure ( £7279.60 ) but they quote in the VT section the figure of £6969.15 - and I can't for the life of me reconcile that ( 13938.30 ) to anything else. - their 'thirds' figure for repossession is also calculated off the same figure ( 13938.30 ). ( a £575.70 difference )

You've paid a deposit of £3200 so the amount you had to pay to VT (according to the contact ) on top of the deposit is £3769.15 ( 23 and a bit months at £161.25 a month )

Then, yes there needs to be settlement figures on the 'value added' stuff, but that should be separate from the VT.

I think R0b needs to have a look.

[R0b]

I'll have a proper look at some point later tonight or tomorrow but even if the clause covers the loan / GAP as being separate, they could still be in breach if they didn't provide you with separate prescribed information on the GAP policy itself. I also believe under FCA rules as part of the prescribed information they have to give you the benefits, exclusions etc. of the policy itself. GAP also cannot be sold on the same day as there has to be a two day 'deferral period' which I think was brought in to allow competition and customers to shop around before concluding the GAP policy. Again if none of this happened then I doubt very much they would be able to recover that outstanding GAP balance.

Worst case, you could call the GAP company and look at cancelling it yourself and see what rebate they can offer you.

[mtol]

Amethy5t Hello, thank you for reviewing the document, they gave me separate documentation on the gap insurances, it was stapled along with the agreement.

All that is outstanding is the gap insurance of £800 and a few pounds. I am currently at the half way mark, and can VT but was informed if i do not cover the gap, i would be liable for a credit file mark.

I have called the various companies my insurance falls under, and some are non-refundable. i have been refunded a pro rata sum of £65

[Amethyst]

How much have you paid ? (£6969.15 or£7279.60 ) or how much did they state you needed to pay in total before you could VT ? ( the calculations in the agreement are bugging me still, sorry - something is wrong in the calculations and it is a consumer credit agreement so it can't be misstated )

If they ARE separate agreements, could you opt to continue with the monthly instalments on the insurances? ( I don't know if you can VT one part of the agreement and the others continue ( just with no benefit) ( just trying to think of a work around )

[R0b]

Focusing on the GAP policy for the moment, Amethyst does, in my view, make a good point about the GAP policy and HP being separate agreements. If they truly are separate agreements, then the VT of the HP should not affect your obligation to continue the monthly repayments for the GAP policy, you could simply set up a standing order or direct debit for the GAP policy amount each month until it has been repaid.

If FCA are suggesting that by exercising your right to VT it means that the GAP policy agreement also terminates at the same and therefore accelerates payment of any outstanding balance, that to me must surely be unfair and nothing short of a penalty. In any event, that acceleration of payment would trigger a rebate by way of early settlement which is essentially a deduction of any interest that has been added in advance at the time the agreement was made - it's the difference between the settlement date and the date when the payments would have been completed.

It just seems all a bit fishy to me on what FCA are telling you and that might be because you are talking to first line customer service who has no idea but a script in front of them, particularly about the marking of a credit file.

You obviously need to make a decision as to whether you VT or you carry on making the repayments, however, I think I would put in a formal complaint to FCA and try to get someone beyond the basic level of support to explain why you are being threatened with a mark against your credit file when you are simply terminating the HP agreement only and the GAP policy agreement operates independently.

It's the same as taking out a loan from Natwest and then obtaining car insurance from Admiral. Both agreements are entirely independent and if you terminate one, the other continues unless you want to settle or cancel it early.

[mtol]

So spoke to them, and was informed, i could set up a payment plan to repay the VAP (Gap insurance) but that would impact my credit rating as it would be seen as a default in not paying the full amount within 28 days. I complained, and mentioned that it seems unfair that they are "separate agreements" but i have to pay the separate agreement within 28 days or face a credit impact. I've been referred to a manager so hopefully this gets resolved.

[mtol]

Amethy5t i was told i needed to pay £7279.60 to be at the half way mark of the VT