Car finance will not accept payment plan

[vjec]

Due to unforeseen circumstances (marriage breakdown & family split) I can no longer keep my car and need to end the agreement. I wish to VT however not made 50 percent payment. Merc benz are happy to take the car back if I pay £2,965.24 to take me to 50 percent mark, which I owe and happy to pay. However I cannot pay in lump sum and offered a to set up a monthly plan. They said no. Instead they suggest I sell the car and pay a settlement figure of £9,631.61 OK I think, although I can only get £7,200 leaving a shortfall of £2,431.61 again I ask if I can set up a monthly plan. They said no.

Could someone please tell me my rights if I have any at all? they also keep sending me paperwork to sign

[R0b]

Hello

Have they told you over the telephone or have they put this in writing? Either way, MBFS are in breach of their obligations under FCA rules because as part of their credit licence, they sign up to comply with certain rules and guidance contained in the FCA Handbooks. The relevant one to you is the the Consumer Credit Sourcebook (known as CONC). Sections marked with a "G" are guidance only and are not legally binding but is what the FCA would expect lenders to do in order to comply whereas sections marked with an "R" are rules and these are legally binding. Failure to comply with Rules is a breach of their duty and is actionable as a claim for damages through the courts.

This seems a pretty straightforward case where you have come into financial difficulty and you are trying to minimise your debt and in doing so have offered to come up with a repayment plan. On the other hand MBFS are trying to increase your debt amount and refusing point blank to accept any form of repayment plan.

Under Chapter 7.3 of CONC I've highlight below the relevant provisions that are applicable.

[R] 7.3.4 A firm must treat customers in default or in arrears difficulties with forbearance and due consideration.

[R] 7.3.9 A firm must not operate a policy of refusing to negotiate with a customer who is developing a repayment plan.

[R] 7.3.10 A firm must not pressurise a customer:

(1) to pay a debt in one single or very few repayments or in unreasonably large amounts, when to do so would have an adverse impact on the customer's financial circumstances;

(2) to pay a debt within an unreasonably short period of time.

It is up to you how you want to approach it but according to the above provisions, MBFS would be in breach to refuse a repayment plan. That said, you've not offficially exercised your right to VT so before going down the complaints route, you would be better off doing that first. They can't refuse the VT simply because you have not paid it off, as this is exactly one of the reasons you can VT if you are in financial difficulties and can't make the repayments.

Otherwise your only option is to sell and make up the difference on the contract or surrender it and let MBFS sell it at auction. Both of these scenarios are likely to end up making you worse off than carryout out a VT.

[vjec]

Thank you for this information.

They have sent VT and settlement paperwork and it states I will make payment in full and I have to sign this before they will pick the car up or I can sell the car. In regards to having to make full payment this was said over the phone and then the paperwork followed.

I have not sent a VT letter, however I will now to cover my back and also mention those points above in relation to breaking rules on not excepting a repayment plan

Thank you for time and help

[R0b]

You are under no obligation to sign any paperwork for VT. You just have to give notice to them that you are exercising the right. The VT paperwork has certain wording in the that will cause you problems in the longer ru so if you want to potentially create more difficulties for yourself then go ahead and sign their paperwork, but I would suggest against it.

[vjec]

I have not signed any paperwork and informed them I am under no obligation to do so. I have issued VT notice and given 14 days for collection and again asked to set up a repayment plan to take me up to 50% mark. MBFS have not responded to any of my recorded letters or emails sent.