Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

[Mr Silva]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

wow, great information being passed on here, thanks so much! i'm brand new to the forum and as many of you before me I have a question about VT's.
I'd like to vt a motorhome that I've had for around 19 months now. The finance is with black horse. I borrowed 27k (over 10 years) to buy the vehicle and have made just over 7k in payments. I rang them today to request a settlement figure and was told 25k. i understand they front load these agreements with interest so not much of a surprise. I obviously haven't made 50% of the payments required not to be charged but I am somewhat prepared for this. The original agreement stated that the total payable after 120 payments would be 44k (approx). My question is this, when i VT this agreement am i liable to pay the 25k (stated as the settlement figure) minus what they auction the motorhome for or am I liable to pay 50% of that 44k total minus what they auction it for(22k)? Also do they take into account the 7k in payments already made? It's all a bit confusing, hope you can help?

[Guest]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

wow, great information being passed on here, thanks so much! i'm brand new to the forum and as many of you before me I have a question about VT's.
I'd like to vt a motorhome that I've had for around 19 months now. The finance is with black horse. I borrowed 27k (over 10 years) to buy the vehicle and have made just over 7k in payments. I rang them today to request a settlement figure and was told 25k. i understand they front load these agreements with interest so not much of a surprise. I obviously haven't made 50% of the payments required not to be charged but I am somewhat prepared for this. The original agreement stated that the total payable after 120 payments would be 44k (approx). My question is this, when i VT this agreement am i liable to pay the 25k (stated as the settlement figure) minus what they auction the motorhome for or am I liable to pay 50% of that 44k total minus what they auction it for(22k)? Also do they take into account the 7k in payments already made? It's all a bit confusing, hope you can help?

You can voluntarily terminate the car at any time, you do not have to have paid 50% of the agreement price.
It is just that this is the amount that would be due after you terminate. So if you have already paid that much(this figure includes any deposit or part exchange) you will not owe any further amounts.

There should be a figure on your agreement under the heading voluntary termination or something along those lines, this should be one half of the total agreement price of the car.

If you add up everything you have paid upto date and subtract it from this figure this will be the amount you would have to pay upon termination.(or after). Just to be clear you do not have to have paid this amount in order to VT, this will be the amount due after you VT.(when the car has gone back).

The other option is to voluntarily surrender the vehicle, if you do this they will sell the car and deduct whatever they get for it from the full agreement price and you will be liable for the difference, less some(small) early settlement rebate.(this is probable the method they quoted)

You will have to do the figures and see which option is best for you, it depends on the current value of the car (how much of a bargain you made when you bought it) , also how much deposit you paid.

[Mr Silva]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

thanks so much for that. in this instance is the total agreement price the 44k?

[Guest]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

thanks so much for that. in this instance is the total agreement price the 44k?

Yes, and the total you have paid for VT purposes would include any deposit or part exchange you made.

If you post the figures I can work out both sets of post termination sums for you if you like, although obviously the voluntary surrender figure will be less whatever the vehicle raises on sale.

[Mr Silva]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Thanks again! So the figures I have are as follows. Cash price of vehicle was 27,848.31. No deposit (part ex cleared previous finance). Total amount payable is £44,120.60. I've made monthly payments totalling £7327.60. Under 'Termination: your rights' it states they are entitled to half the total amount payable which is £22,060.30. I spoke to the place I bought it from and they said its current market value, trade, is around £14,000.00 (they agreed to sell the vehicle for me and would guarantee me £19,500 after the sale leaving me £5,500.00 to find to clear the previously mentioned settlement figure of 25,000.) So I guess it's all about which figures add up most favourably.

[Guest]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Thanks again! So the figures I have are as follows. Cash price of vehicle was 27,848.31. No deposit (part ex cleared previous finance). Total amount payable is £44,120.60. I've made monthly payments totalling £7327.60. Under 'Termination: your rights' it states they are entitled to half the total amount payable which is £22,060.30. I spoke to the place I bought it from and they said its current market value, trade, is around £14,000.00 (they agreed to sell the vehicle for me and would guarantee me £19,500 after the sale leaving me £5,500.00 to find to clear the previously mentioned settlement figure of 25,000.) So I guess it's all about which figures add up most favourably.

How much are your individual monthly repayments ?

[Mr Silva]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

How much are your individual monthly repayments ?

They are 366.38 and I've made 20 of them so far totalling 7327.60

[ncf355]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Andy, are you with me in thinking the early settlement figure doesnt add up?

[Guest]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

I get the APR to be 10.4% is that about right ?

Settlement on VS as you say would be £25,285.60, less any sale on the vehicle..

Settlement via VT would cost you £14,687.

So in your case, going off these figures the voluntary surrender would be by far the best option. This is because there was no deposit made and also the value of the goods has held up reasonably well.

[Mr Silva]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

I get the APR to be 10.4% is that about right ?

Settlement on VS as you say would be £25,285.60, less any sale on the vehicle..

Settlement via VT would cost you £14,687.

So in your case, going off these figures the voluntary surrender would be by far the best option. This is because there was no deposit made and also the value of the goods has held up reasonably well.

10.4% is exactly right!
Thanks so much for your time and effort, it's really appreciated. So, if I understand everything correctly, of the two ways of giving back the vehicle, the VS has the best chance of costing me less but is still a gamble as we don't know whether they'll bother to get the best price or just accept trade value (14k) for it (probably the latter) so I'll still need to pay off over 10k? As the motorhome company are offering to sell on my behalf and guarantee me 19.5k I think that's probably the very best option open to me as I only need to part with £5,500 to clear it.

[Guest]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

10.4% is exactly right!
Thanks so much for your time and effort, it's really appreciated. So, if I understand everything correctly, of the two ways of giving back the vehicle, the VS has the best chance of costing me less but is still a gamble as we don't know whether they'll bother to get the best price or just accept trade value (14k) for it (probably the latter) so I'll still need to pay off over 10k? As the motorhome company are offering to sell on my behalf and guarantee me 19.5k I think that's probably the very best option open to me as I only need to part with £5,500 to clear it.

Yes although still a lot of money to find of course. If you have a DMP you can arrange to add this, however they will default your credit file unfortunately.

[Mr Silva]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Yes although still a lot of money to find of course. If you have a DMP you can arrange to add this, however they will default your credit file unfortunately.

What's a DMP?

[Guest]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

What's a DMP?

Debt management plan. It is a way of handling unsecured debt, through allocating a proportional amount of your disposable income to each creditor in lieu of full payment.

I dare say if you have to ask you don't need one.

[Mr Silva]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Debt management plan. It is a way of handling unsecured debt, through allocating a proportional amount of your disposable income to each creditor in lieu of full payment.

I dare say if you have to ask you don't need one.

In this instance I have a contingency, however the wifes car is another matter..............I may need one for that, not sure i can cover the shortfall on both! :tinysmile_aha_t:
Thanks again for all of your help Andy it is very much appreciated!

[katorik]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

No, they should not have Defaulted your credit report

You are entitled to terminate the agreement without charge as you have completed in excess of 50% of payments, therefore the default is wholly invalid and inaccurate.

I would suggest writing to them stating you intend to contact the Information Commissioners Office to place a formal complaint about this.



As for the rest, write back quoting the terms of the consumer credit act relating to VT (as found in this thread and state that no payment will be forthcoming as the statute clearly states "reasonable condition" therefore no further sums are due.

State that if they continue to attempt to demand sums that are not due, you will file an official complainty with the OFT

I've lodged a complaint with the financial ombudsman now as Santander continue to maintain the stance that the mileage excess is a breach of the agreement and therefore outside of the Statutory rules - load of rubbish really!
I have also confirmed my position again in writing to Wescot (their Debt Collection Agency) who are chasing the debt. Wescot's words were that they were advised by their client 'if there is any damage above wear and tear or any excess miles, these are worked on a pro rata and you will be charged'.
I have requested that the default on my credit file be removed immediately but have had no response to this from Santander hence the lodging of the complaint with the Ombudsman.