VT - so close to 50%

[Chin]

Hi all

we are intending to do a VT however the finance company have said we have around £750 to go before we reach the 50% point.

my next instalment is due anytime now for £350 so I was planning to make an overpayment today of £400 to reach the 50% figure now

however the finance company have said that I’m unable to make an overpayment of that amount as it’ll have no significant impact on either reducing the term or lowering my monthly repayments.

in fact they even said that if I did indeed make that overpayment my month repayment would increase from £350 a month to £1000 a month because of interest (confused?)

so my question really is what is the best way of reaching the 50% mark ASAP this month bearing in mind we will be around £400 short once October payment is taken.

any advice hugely appreciated.

[Amethyst]

You can VT now, but you will be liable for the £750 payment ( £400 if you wait until after the £350 has been paid before sending the VT notice) You can actually VT a day after taking out the loan but still be liable for 50% of the total payable under the agreement.

No idea what they are talking about regards you making an overpayment increasing your payments... I think they have confused themselves and I'd probably double check all your figures ( calculate your payments made, any deposit/part ex value/advance payment and instalments vs the VT figure given in the agreement ) to make sure they are correct on the £750.

Useful links

Voluntary Termination: Letter Templates

A guide to voluntary termination: Your rights

[Chin]

Thanks. I’ve triple checked the math and £750 is about right.

so based on the above shall I send in the letter template now and expect a bill of the outstanding amount to get to £750

or will they refuse the VT until I’ve paid this £750?

just trying to work out best way to proceed today with this small-ish amount to pay

thanks very much for the help

[R0b]

They cannot by law refuse to accept your notice before meeting the 50% threshold. It's a common myth and mistake by many of the low-level employees who don't have a clue how it works though some of them do and still try to wing it anyway.

If they don't accept it then that would amount to a repudiatory breach with the legal remedy being you can inform them of their breach, tell them you are accepting it and choosing to terminate the agreement. All future liability is then extinguished and you have a right to pursue damages on an expectation basis i.e. as if the contract had been fully performed.

Of course whoever the finance company is, they probably won't like that and will threaten you left, right and centre to put pressure on you. Ultimately if they pursued legal proceedings, I would say they wouldn't have a leg to stand on.

You can either go down that route, argue that your VT notice is valid and their refusal to accept is void under s.173 of the CCA, or just continue with ping pong correspondence and see who gives in first.

[Chin]

Thanks - they have advised on the phone that in order to do a VT they will send me a ‘pack’ that I need to sign and return etc.
everything I’ve read prior to now is not to sign anything and just hit them with the legal letters provided on this website. Although I’ll have to tweak it as at the point of sending the letter I will not be at 50% yet.

so shall I send the letter now and wait for an invoice of the outstanding amount to get to 50%? Is that the best way to proceed. Seems like it but just want to be absolutely sure.

thank you

[R0b]

Sounds sensible. Tweak the template to say something like 'I understand that I am slightly short of one half of the total price payable by around £X. Please send me an invoice of the amount required to meet this amount.'

You could also mention that you've been told over the phone that you are required to sign and return their 'VT pack' but you are not required to do this and there's nothing in the Consumer Credit Act to say that you must sign the paperwork before termination of the agreement takes effect. In any event, you want to make it clear that you won't be signing anything as your letter is sufficient.

[Chin]

Perfect that’s spot on - thanks so much for the help

[Chin]

Thanks for everyones help on this - the car has been collected today by BCA
I did indeed get sent the invoice for the outstanding finance which was paid and so far everything has run smoothly.

The inspectors report has identified £93 worth of damage so hopefully no further shenanigans from the finance company and i can report a positive experience!

[Looper81]

Hi Chin. Did you indeed have a good experience? I’m considering doing it. The only damage to my vehicle is some very minor marks on my alloys. All smaller than 10mm. I’m really apprehensive about doing it*

[Chin]

Yes all good - I even had a letter from the finance company waiving the £93 alloy damage as a goodwill gesture. Which I find odd - but I’ll take it!*