Voluntary Termination - 50% Calculation

[M0t0rcar]

Hi,

A question for R0b

In the "Guide to voluntary termination: your rights" that is posted on here, it shows how to calculate how much you have paid in order to compare to the 50% VT amount in the agreement.
The example shows 27 payments of £236.22 but does not mention the deposit paid.

If someone put a deposit down of say £500 and their was a dealer or finance company deposit contribution of say £1,500 - then I assume that this £2,000 also counts towards meeting the 50% VT point as well as the instalment payments made?

Thank You

Mark

[R0b]

Yes it should do.

Definition of deposit as outlined in the Consumer Credit Act:

“deposit” means any sum payable by a debtor or hirer by way of deposit or down-payment, or credited or to be credited to him on account of any deposit or down-payment, whether the sum is to be or has been paid to the creditor or owner or any other person, or is to be or has been discharged by a payment of money or a transfer or delivery of goods or by any other means

The definition is wide enough to include both your deposit and any dealer contribution deposit in which case the £2,000 would be an amount contributed to the total price payable and thus reducing the payments. It should therefore count towards the VT amount but be prepared for the lender to argue that their contribution doesn't.

[M0t0rcar]

Thanks R0b, I suspect many must have come up against this as its common these days to have a dealer deposit contribution or finance company contribution and without it a lot of people wouldn’t meet 50% during the term hence VT would not possible.

If they raise it I wonder if another way of looking at it is you need to have paid 50% of the total amount payable and therefore have 50% or less to pay. To prove that you could add the remaining instalments due and the final balloon payment due which if they are 50% or less, proves at least 50% must have been paid.

Would their case to reject a deposit contribution as part of the calculation be stronger if it is a "finance company contribution" vs a "dealer contribution" towards the deposit?

Thank You

Mark

[R0b]

Honestly, I am not sure how they would look to raise the objection but I vaguely recall someone on here who had a fairly expensive BMW vehicle and there was a dealer contribution of £1,000 and BMW tried to claim that it doesn't count towards the amount paid for VT purposes.

But if the contribution is not a deposit, then what is it? is it deducted from the vehicle sale price? If neither, then to me it would appear to be misleading or deceiving because ultimately it meant nothing. Anyway, I think finance companies would struggle to argue that a dealer or finance contribution is not a deposit or down-payment of some kind and irresepective of whether you made that down payment, it is still a down payment towards the total credit.