Voluntary Termination with non runner

**R0b** · 13th May 2024, 23:01:PM

Hello
I'm afraid you are at a bit of a crossroads and not something anyone other than yourself can really decide on the next steps.
To be clear, you have the right to terminate the agreement at any time so long as the final payment hasn't become due or if the creditor has already terminated the agreement, irrespective of the condition of the car.

Option A: Give notice of termination and don't carry out any repairs
You could go down this path and inform the creditor you wish to exercise your VT right under section 99 of the Consumer Credit Act 1974. You would also need to be upfront and explain that the car is a non-runner, presumably because the car has failed due to wear and tear rather than your own negligence. As such, the creditor will need to make arrangements for a recovery truck to collect the car. From a strict legal point of view, the creditor is entitled to recover any costs or losses as a result of you having not taken reasonable care of the car, less wear and tear. It is a question of fact (and perhaps evidence) as to whether the breakdown of the car was caused by ordinary wear and tear or through some other driver-related issue. You may be able to argue that you terminated early due to the breakdown which in your view was reasonable wear and tear and because of the cost, you are now seeking to terminate. It will be up to the creditor to prove that the car now becoming a non-runner did not result from wear and tear.

The response from the creditor may go one of several ways. First, they may refuse to accept your voluntary termination notice, because the car is a non-runner and they will insist on you repairing before they collect, or maybe they want you to sign their own paperwork before they process the termination, or maybe some other reason as a means to avoid processing your termination. Regardless of the reason for the refusal, the creditor cannot deny your termination right unless one of the two reasons I mentioned above applies. It is a statutory right which you are entitled to exercise and is not conditional upon you satisfying some other requirements as dictated by the creditor. So long as you give notice in writing to the creditor at the address listed on the contract, you would have met the criteria to terminate.

Equally, some creditors will also turn the screw into you by demanding that you continue paying your instalments until you meet their demands. This may then have the knock on effect of them serving default notices, threatening to terminate the agreement and/or reporting late payment or default markers on your credit file. Again, if you have given valid termination notice, the creditor is more than likely to be in breach of their data protection obligations by failure to ensure data is accurately recorded i.e. notifying credit reference agencies that the agreement was voluntarily terminated and account should be closed. Some creditors such as BMW will continuously report late payments until you decide to do something about it, usually by issuing legal proceedings and then for most creditors, leading them to settle the claim eventually knowing they are in the wrong. I exclude BMW from that because we have had several posters threatening and/or issuing proceedings on here but then they simply don't post any further update - I suspect BMW settle these claims on a confidential basis preventing the posters from reporting back the results but that's just pure speculation.

Option B: Go down the rabbit hole of diagnosing and fixing the problem at your own expense
This is where things can get really costly very quickly, and the potential issue you may have is that if the garage you send it to for inspection strips down the car without fully diagnosing the problem and you run out of money. The car sits in the garage until you can pay up (potentially they may sell it, worst case) and/or you have the creditor on your back potentially claiming breach of contract under something or other.

If I were in your position and I am not suggesting this is the correct path, I would be inclined to choose Option A. I have seen some horror stories where people have tried to have the car repaired only to then get into financial difficulties and ultimately they end up in a far worse position than they expected. So unless you can quickly diagnose and identify the engine problem, you may have more of a chance defending claims from the creditor under Option A.

You need to weigh up what is in your best interest.

**Jinxzy** · 30th May 2024, 09:07:AM

Thank you so much for your extensive write-up for me. I weighed up my best interests and decided it was right for me to go with the VT.

I emailed them your template (modified to suit my needs and including the non-runner issues) last night and sent a letter yesterday via recorded delivery.

In the template I asked them to call me and they replied this morning asking me to call them.

I expect they will want me to arrange to get the car to them do I just stand firm and tell them to arrange collection?

**Jinxzy** · 3rd June 2024, 16:03:PM

Hi again R0b, so they have called me and explained that because it is a non-runner they are not accepting my voluntary termination. They are sending me the terms and conditions to explain that the vehicle has to be in working order in order to accept the VT. They also defaulted me as I cancelled the direct debit when I questioned it they said that it is because the agreement is still active.

I cannot seem to find the car collection documents to read before I receive their call on Wednesday I am sure I seen them on this site.

**Jinxzy** · 4th June 2024, 16:29:PM

So this is what I have done so far they are still not budging and are now trying to threaten me with a 6 year default.
On the 30th May I issued them with a voluntary termination sent by email and recorded delivery. As of today's date the VT letter is showing up as not able to confirm status on the royal mail tracking site.

They did however acknowledge the email. Once I received confirmation I stopped the direct debit. This is the original VT letter I regret not going into more detail regarding the non-runner status however I do not believe it would have made the slightest bit of difference.

Termination letter under S.99(1) of the Consumer Credit Act 1974

Dear Sir or Madam,

Termination of hire-purchase agreement in accordance with section 99(1) of the Consumer Credit Act 1974 (“CCA 1974”)

I am writing to inform you that I am exercising my right to terminate the above hire-purchase agreement with immediate effect in accordance with Section 99 of the CCA 1974. Under Section 100(1) of the CCA 1974, my liability is limited to one-half of the total price payable which, according to the terms of this agreement, is £8920.60. As at today’s date, I have paid £2940.21, and I am therefore no longer required to make any further payments.

I have also inspected the vehicle and I am of the opinion that it is in a reasonable condition given its age whilst accounting for fair wear and tear. I will also advise that the car is currently a non-runner. It broke down on the 4^th May 2024 the engine mount had come out. I stand that this is due to the current state of the roads therefore normal wear and tear and as a consequence the engine had dropped potentially damaging the clutch. I had a new clutch in May 2023 therefore I had kept up with usual maintenance. Photographic evidence has been taken in the event of any future dispute as to the state of the vehicle. The vehicle is available to collect from the above address on giving reasonable notice, otherwise if you prefer to have it delivered to another location, I am willing to consider this provided that you agree to pay my reasonable costs and expenses.

I would appreciate if you could contact me on ########### within the next 14 days to discuss the next steps.

Yours faithfully,

Glen Barnes

I had an email asking me to call them but I was busy. On the 3rd June they called me and verbally told me that they cannot accept my VT and would I like to receive their t&c's I said yes and they said they will call back 5th June (tomorrow)

Today I sent them this

Termination letter follow-up

Dear Sir or Madam,

On 30^th May 2024 I exercised my right to voluntarily terminate my hire purchase under section 99 of the consumer credit act 1974. I also explained that the vehicle Mazda 3 OY13KGG is a non-runner. The car failed due to wear and tear rather than negligence on my part.

Therefore, it is my understanding that you will need to make arrangements to collect the vehicle.
The only reason I terminated my agreement early was because of the breakdown which in my view was reasonable wear and tear and the costs were not viable for me.

On the 3^rd June 2024 you called to explain that you reject my voluntary termination because the car is a non-runner.

That being said however, a voluntary termination is my statutory right and one that you cannot refuse. The voluntary termination is not conditional upon me satisfying requirements dictated by you.

I gave notice in writing at the address listed in the contract and sent by recorded delivery. I also followed that up with an email which was acknowledged on 30^th May 2024 by Ross Cunningham therefore I have met the criteria for a voluntary termination.

I also see that you issued me a default notice and briefly spoke about this on the telephone which I verbally requested a copy of with a subject access request and was told that I need to carry on making payments as the agreement has not been terminated.
As I gave you a valid termination notice, you are in breach of your data protection obligations. By failure to ensure data is accurately recorded as you should notify credit reference agencies that the agreement was voluntary terminated and as such should be closed.

Considering this I will be making a formal complaint to the financial ombudsman service in due course.

Yours faithfully,

Glen Barnes

I then get this email

Hi Glen,

Thank you for your email.

As discussed, the car is not roadworthy meaning we a Voluntary Surrender would take place and not a Voluntary Termination.

To discuss in more details please call the office on 01618509032

Our office opening hours are 9 am till 7 pm Monday to Thursday, 9 am till 6 pm Fridays & 9 am till 1 pm Saturdays.

Then replied

Thank you for your email.

In fact you are wrong. S.99(1) simply requires me the right to terminate at any time (unconditionally) by giving notice in writing to you. That I have done by email and by letter. As far as the law is concerned I have done what I need to do.

You now need to collect the car at a suitable time as I’ve instructed. You have not even looked at the car to decide if it’s a non-runner due to wear and tear you have assumed that yourself.

(c) pay the cost of all Vehicle repairs that are required as a result of your not having taken reasonable care of the Vehicle.

I bring up the highlighted paragraph you sent to me yesterday. You are assuming I did not take reasonable care of the vehicle where in fact I had. I stand by my statutory right to Voluntary Terminate my agreement on the 30th May 2024 not a voluntary surrender as you would like me to do.

If you do not honor this request please put me in touch with your complaints department at your earliest opportunity.

Their reply

Hi Glen,

Any customer can terminate at any time, however if the car is returned in a non-roadworthy condition there will be an outstanding balance owed by the customer.

You have informed us the car is a non-runner. This means the car is not roadworthy. Normal ‘wear and tear’ doesn’t result in a car being a non runner.

Here is the part of your email I refer to:

‘I will also advise that the car is currently a non-runner. It broke down on the 4th May 2024 the engine mount had come out. I stand that this is due to the current state of the roads therefore normal wear and tear and as a consequence the engine had dropped potentially damaging the clutch.’

To confirm, we are happy to collect the car. However, as it’s not in a roadworthy state you do not qualify for a voluntary termination.

This will result in a 6 year Default marker on your credit profile please be informed.

We will require a discussion about a payment plan towards your outstanding balance.

I would like to point out however that if you can return the car to a roadworthy state, so a state where it would pass an MOT, then as you are over halfway into the agreement you would then qualify for a Voluntary Termination with no outstanding liability.

I await your update.

I found the 6 year default threats intimidating and see that they are trying to force me into a VS
I replied

You are wrong in this matter I would like to escalate this complaint please. Normal wear and tear can in fact result in a non-runner I will not be agreeing to any payment plan and you cannot threaten me with a 6 year default as I have not defaulted the agreement.

Thank you.

Then their last reply

Hi Glen,

Unfortunately, you have not taken ‘reasonable care of the vehicle’ by returning it as a non-runner.

You have been advised to remedy the car so we can help you go ahead with a Voluntary Termination which we can conclude you are choosing not to do.

Please be advised it is our duty to explain to all customer’s the impact of conducting a Voluntary Surrender has to their credit profile.

We will raise the complaint for you as requested.

We will be in touch to discuss the liability payments once the complaint has concluded.

It has a valid MOT and the only reason it would not pass is there is no drive the car starts fine and in my opinion this "damage" is because the bolt to the engine mount fell out causing damage. This was while I was traveling from Bournemouth with the kids on a family day out. The fact they are refusing to collect unless I agree to a voluntary surrender is absurd.

Question if anyone made it this far is do I carry on with it or just wait for the conclusion of the complaint?

I don't believe they can default me is the repudiatory breach the next step? I am currently still paying tax on the car it is parked on my private car park for my flat so if I do not pay the tax it'll have a notice put on it.

Thanks in advance

Voluntary Termination with non runner

Voluntary Termination with non runner

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