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

[sleigh1985]

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

Good Morning all,

I am wondering if anyone can help at all please. I have recently returned a car on finance to the finance company. They have sent me a final bill which is much higher than expected. I have had the agreement just over a year, no payments were missed and yet the price they are quoting seems high.

The original price to pay back with interest etc was around £15,000. The car would of sold at auction for roughly £6000 yet i am still owing them £4200! they are saying that if the car sells for more than the half way mark, then i am liable for the full 100%...is this true? this seems scandalous to me and a joke. If i had continued with the agreement then i would of only had the car up to the half way mark, so how can they estimate the full amount still?

Any help would be most useful on this

Thanks

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

The intention of this piece is to clarify the situation regarding VT’s. There is much misinformation given from various sources, some of it well-meaning and some perpetuated by dealers who fully know that the provisions give the debtor an effective tool to mitigate losses on an unwise purchase.

It is true to say that this particular piece of legislation survived the recent consumer credit reforms by the skin of its teeth, there were many lobbying for it to be rescinded.

First some basic facts:

1) Contrary to popular belief, the debtor is fully entitled to terminate the agreement at any time. It does not matter if he is in arrears or if he has paid half of the total amount on the contract.

2) The debtor does not have to fill in a form provided by the creditor in order to voluntary terminate the vehicle. It is quite acceptable for the debtor to just write a letter giving the creditor reasonable notice. (We will include some template letters later in the thread for you to use.)

3) The creditor cannot charge a fee of any kind for this; he is compelled to provide this service by statute.

4) You do not have to make any special arrangement to return the car; they must arrange either a local drop off point, or free collection.

5) If no arrangements can be made for return of the vehicle, it must be made clear that a charge will be made against them to cover storage.

6) The vehicle does not have to be in pristine condition when you return it. They cannot refuse the Termntation whatever the condition. All that is required by statute is that the goods were” reasonably well” looked after.

7) It is true that they are entitled to charge for any work needed to return the vehicle to a reasonable standard. To this end they may ask you to witness a condition report on termination.
You do not have to attend anything although it may be in your interests to do so. Sometimes these are carried out by an independent agency such as the RAC other times it is one of the dealer’s employees. At the end of the inspection they will ask you to sign the report. Do not sign unless you totally agree with what is on it and it is properly particularised. “A slight indentation on rear off side”, could land you with a bill for a new wing.

8) To repeat you do not have to sign anything, they are compelled by statute to accept the car back the agreement is terminated.

Peter

[JamesB]

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

Hi all,

Newbie here and not sure if anyone is still following/contributing to this thread. In the hope that you might be, I have 2 questions please which going through the previous pages and posts, I can't find a definitive answer;
I'm in the process of VT'ing a PCP on a car through Mini (for background)

1. Mini say I need to complete a form for them, original thread suggests I don't and using the template is fine. Is that still correct and is my letter using the template sufficient?
2. They say I need to hit the 50% mark and as I haven't, I owe them just over £1,000 (roughly 4 months payments). Is this correct and do I need to pay this? If so, can I ask to repay over x months as I can't afford £1,000 in a lump sum

Thanks in advance, appreciate the help.

J.

Could anyone please confirm whether the letter is still acceptable or whether you are legally obliged to complete their paperwork too?

Thanks.

[titch2k6]

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

I have been reading the posts in this topic with interest as I am in a situation myself.

I have been out of employment for almost a year now leaving a £28,000 pa job, following a Ski accident in April, in July 2014. This has seriously taken its toll on our finances to the point that we face repossession on our home.

After taking advice from the CAB debt advisory team, we are now terminating our agreement on our HP vehicle in order to help us gain back our finances (the HP was taken out early 2014, before my accident and subsequent departure from employment) and save our home. However, the company in question are refusing to take back the car until they have received a financial statement and an schedule of payment on outstanding monies (we have paid less than 50% of the finance value), which I know breaches Section 99.

In Mr Peterbard's very first post in this subject, he mentions in point 5) about a storage charge. Is this actually covered under CCA 1974 and if so, can someone link me the exact wording please. I am looking at informing the company about my intention to levy storage charges, as they refuse to take the vehicle back unconditionally, which I will be insisting are deducted from any fees calculated under Section 100.

Just want to know where I stand on this legally.

Thanks in advance.

[JamesB]

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

Hi all,

Newbie here and not sure if anyone is still following/contributing to this thread. In the hope that you might be, I have 2 questions please which going through the previous pages and posts, I can't find a definitive answer;
I'm in the process of VT'ing a PCP on a car through Mini (for background)

1. Mini say I need to complete a form for them, original thread suggests I don't and using the template is fine. Is that still correct and is my letter using the template sufficient?
2. They say I need to hit the 50% mark and as I haven't, I owe them just over £1,000 (roughly 4 months payments). Is this correct and do I need to pay this? If so, can I ask to repay over x months as I can't afford £1,000 in a lump sum

Thanks in advance, appreciate the help.

J.

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

Just for the record section 101 actually says http://www.legislation.gov.uk/ukpga/1974/39/section/101

101Right to terminate hire agreement.

(1)

The hirer under a regulated consumer hire agreement is entitled to terminate the agreement by giving notice to any person entitled or authorised to receive the sums payable under the agreement.

(2)

Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination.

(3)

A notice under subsection (1) shall not expire earlier than eighteen months after the making of the agreement, but apart from that the minimum period of notice to be given under subsection (1), unless the agreement provides for a shorter period, is as follows.

THE LIABILITY UNDER THE CONTRACT IT REFERS TO ARE PAYMENTS DUE UPTO TERMINATION.

[alphawhiskey]

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

The point is that the act says nothing about millage, in fact it doe not exclusively refer to vehicles, it refers to all goods acquired on HP.

They contend that the excess charges are part of the contractual conditions, this may be true, the question is if they are enforceable given that the act already has a provision which governs the condition of the goods on return, are they saying that the contractual term overrides the term in the statute ?
The act says that "reasonable care" must have been taken of the goods, if the act intended this term to be defined by the creditor it would say in the condition described in the contract.

The only way that this protection can work is if the definition of reasonable care lies in common usage of the term.

Hmm, it looks like I'm also at this point too. The latest reply from RMS says some of the same thing (in red below):

"We write with reference to your recent e-mail dated 23^rd March 2015.

· You signed your credit agreement (attached)and terms and conditions (attached) of hire, both of which were presented to you at point of sale, you confirmed that you had read and accepted the contract by signing. Both the credit agreement and T&C’s clearly set out the charge for excess mileage and we specifically refer you to section 14, subsection 5 and 6. Refusal to pay excess mileage charges is a breach of contract and as a result may have a financial impact on you should our client force litigation for the repayment of the sums owed this in turn will have an adverse effect on your future creditworthiness should the debt remain unpaid.
· No breach of the FCA guidelines has occurred as you were properly presented with these documents, again confirmed by your signature.

Below is stated on your voluntary quotation form (attached)

What condition does the vehicle have to be in?
The vehicle has to be in a reasonable condition, allowing for fair wear and tear. It's your responsibility to repair any damage to the vehicle before you return it. If you don't, we'll charge you for the cost of the estimated repairs in addition to the 50% figure mentioned above.
Please refer to the Terms and Conditions of your contract to prevent disputes about what is fair wear and tear. Also if your contrat included an agreed mileage and you've gone over your pro rata mileage, we'll charge you for this at the rate set out in your contract.

Below is a statement from the Consumer Credit Act (CCA)

• Section 100 subsection (4) of the CCA, stipulates that ‘If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly.’ This is further extended in section 101 subsection (2) Whereby “Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination” . Any sums due to under that agreement such as Excess mileage and damage that is accrued during the period of said agreement and fall due during the Voluntary Termination process is to be paid in excess or the 50% Value.

As stated previously, in order to reach an early commercial settlement our client Citroen Financial Services agrees to accept less than the full amount of the debt owed for damage to vehicle LN12VSX, Citroen Financial Services agreed to accept the sum of £210.00 for damages only, in Full and Final settlement of this damage Claim. (66% of damage balance)

The excess mileage amount will remain at £141.42.

Failure to comply with this request will result in our client immediately demanding the payment of the original amount and reserve the right to issue legal proceedings against you for that amount should payment not be forthcoming"

I'm not really sure what to do about all this now - it's starting to really get me down now. Especially as I now also have Citroen requesting I pay £250 for a GAP insurance liability! When I looked into VT-ing I found out that I had GAP insurance (which I have to admit I didn't know I had) but was informed that I could cancel at any time (as per the Ts & Cs) and not owe anything further... but now they are stinging me for £250..... plus the RMS receivables claims for excess mileage and damage claims! Just feel like giving up!..... sorry for the negative moans, but if anyone has any bright ideas, I'd love to know.... thanks!

[Blueboy777uk]

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

Thank you Wombats! That has made things much clearer and I appreciate your time to help on this. I can prepare myself for my next "tussle"! :-)

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

Thank you Wombats.

I do appreciate your help and I know that you are busy - are you suggesting I ask them to directly show where it states Excess mileage and damage as examples of liabilities?

Sorry for asking what may seem like an obvious question.

The point is that the act says nothing about millage, in fact it doe not exclusively refer to vehicles, it refers to all goods acquired on HP.

They contend that the excess charges are part of the contractual conditions, this may be true, the question is if they are enforceable given that the act already has a provision which governs the condition of the goods on return, are they saying that the contractual term overrides the term in the statute ?
The act says that "reasonable care" must have been taken of the goods, if the act intended this term to be defined by the creditor it would say in the condition described in the contract.

The only way that this protection can work is if the definition of reasonable care lies in common usage of the term.

[Blueboy777uk]

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

Thank you Wombats.

I do appreciate your help and I know that you are busy - are you suggesting I ask them to directly show where it states Excess mileage and damage as examples of liabilities?

Sorry for asking what may seem like an obvious question.

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

If RMS are right in what they say -

"Below is a statement from the Consumer Credit Act (CCA)

• Section 100 subsection (4) of the CCA, stipulates that ‘If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly.’ This is further extended in section 101 subsection (2) Whereby “Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination” . Any sums due to under that agreement such as Excess mileage and damage that is accrued during the period of said agreement and fall due during the Voluntary Termination process is to be paid in excess or the 50% Value."

Then what is the next step? I have been fighting this since Jan and to be honest it is starting to stress me out. Am I in the legal right to defend myself (as I am in the exact same position as Shutterz and others) or have the finally won? I'll be gutted to admit defeat to these people but dont want to end up making a trip to court to then face judgement against me. :-(

Could you link to this passage please within the act.

[Shutterz]

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

Hi

You need to refer them back to section 173 of the act point out that the Consumer credit act does not allow for the contracting out of a provision contained within the act for protection of the Hire.

Contractual provision you indicate is unenforceable under the act.

Hi Wombats... I am desperate for any advice. I have written an email response to RMS which I found from someone else on the forum who was in the same position as me (please see below in red)... It is relating to excess Milage charges. RMS also tried to charge me for damage which was not on the car. On the 10 March via telephone they stated they were "going to write off the damages" as I have photographic evidence that there was no damage, the damage they tried to claim was not on the inspection report.

Dear Wayne, It seems as though we are going round in circles with the same argument. I have made my position in this matter clear, but for your reference I quote from the act:


"173 Contracting-out forbidden".

(1) A term contained in a regulated agreement or linked transaction, or in any other agreement relating to an actual or prospective regulated agreement or linked transaction, is void if, and to the extent that, it is inconsistent with a provision for the protection of the debtor or hirer or his relative or any surety contained in this Act or in any regulation made under this Act. "

Your term that stipulates further payment beyond that required under Section 10 of the act is clearly expressly forbidden by the Consumer Credit Act 1974, therefore I retain my position that no further payment is due or shall be made.

Further, should you take steps to add CIFAS information in relation to this agreement or my person in any way, I shall take action against your for this unlawful act under the Data Protection Act 1998.

As your correspondence in this matter has now become circular it is not my intention to respond (beyond a simple acknowledgment of receipt) any further to your unwarranted demands as I have made my position in law clear.

Yours faithfully,


Today I have received this letter which states they are now also charging me for the non existent damage again that they agreed was written off on the 10th March!!! Please see below... I don't know how to respond to them. Could you please advise me what my options are? And any advice on how to respond would be greatly appreciated. Kind regards Claire.

Reference: RMS/1351091


Dear Sir/Madam

OUR CLIENT:	Peugeot Financial Services
AMOUNT OUTSTANDING	£539.79
Vehicle Registration:	NL62BEO
Agreement Number:	1351091

We write with reference to the above matter and note from our records that payment to the sum of £539.79 remains overdue.

We again notify you of our client’s claim for£539.79 for Excess Mileage and Damage in respect of vehicle NL62BEO Werespectfully request that the sum of £539.79 is paid immediately.

If you require any additional information to enable you to make payment of the overdue balance on your account please contact RMS Receivables without further delay on 0113201 4440.





Yours faithfully


RMS Receivables

[Blueboy777uk]

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

If RMS are right in what they say -

"Below is a statement from the Consumer Credit Act (CCA)

• Section 100 subsection (4) of the CCA, stipulates that ‘If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly.’ This is further extended in section 101 subsection (2) Whereby “Termination of an agreement under subsection (1) does not affect any liability under the agreement which has accrued before the termination” . Any sums due to under that agreement such as Excess mileage and damage that is accrued during the period of said agreement and fall due during the Voluntary Termination process is to be paid in excess or the 50% Value."

Then what is the next step? I have been fighting this since Jan and to be honest it is starting to stress me out. Am I in the legal right to defend myself (as I am in the exact same position as Shutterz and others) or have the finally won? I'll be gutted to admit defeat to these people but dont want to end up making a trip to court to then face judgement against me. :-(

[Vikusjonok]

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

I am new here, specially registered to ask the question. The long story short: I and my husband have 2 HP cars, both cars are on my name. Now the things between us have been going really not so well, that I am considering divorce. I am not sure, but statements given to me in arguments have suggested that he might refuse to pay for the car he has been using. I am sure I will not have any problem whatsoever of getting my hands on it, on the 2^nd key and the documents, though.

Now, the HP was taken April 2013 for 4 years (48 months), monthly payment of 232 pounds. I have not missed any payment in those 2 years, only last month the direct debit has been returned, but I rang them myself and paid from the different card same day (the day when DD goes from my account). I checked last night the agreement, which is saying that the 50% would be around 6440 pounds, I still got to pay 6100 or less, so that’s not problem.
In the agreement I did not find any mention about the mileage, but I might be wrong, need to check (don’t expect it to be there, as there is no balloon payment like I had on my brand-new car, we got it second-hand). We bought it at 19K miles. Now must be around 44K. Car has been serviced, but he has taken it to Toyota dealership, as it was closer and slightly cheaper (would it matter?).

Lastly, the car has been involved in the accident last month, my husband’s fault, and currently is serviced via insurance company (would this matter?).

Car got minor scratches here and there, small dent just by the breaklight and scratched allow wheels.

Is it feasible for me to VT it, if things go wrong and we split up? Or I will end up with huge bills to pay for the bodywork?

Company: Honda Finance.

[car must go]

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

update : told today that my car has outstanding HPI showing on a report , and have been told that means the car "loan" has been set up like a hp agreement and is there for under the same rules for VT, I rang and told them this and was told that the loan is on the car which is why HPI is showing and that does not mean the rules are the same.
rang a government credit section and was told that a loan with these markers means it is under the same rules for VT and that if they do not follow the law then the marker that was placed on the car showing outstanding finance would be illegal as its maked up as hp or conitional loan, and not just a "loan".

[ralphingizmo]

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

Hi all, just thought i would post an update on my VT. I contacted GMAC finance via phone to ask for an address to send my VT letter. They told me not to bother and they would send a pack out. I decided to post the letter regardless via signed for delivery with proof. The following day i had a phone call to confirm they had recieved my letter and would proceed immediately. Again they told me they would send a pack and i had to sign and return it. I explained that i did not need to sign anything other than an appraisal form, to which they replied the pack would be sent regardless.
7 days later the car was collected via Manheim Auction. The gentlemen was very friendly and honest with his appraisal and explained that the cost he had informed me of (roughly £254) based on what GMAC charge for the stone chips, wheel trim scuffs and incomplete service history (the car had full sevice history but the garage had forgot to stamp the first 2 services prior to my purchase).
Couple of days latter i received a letter from GMACs solicitors asking for payment in full to clear my agreement. I called the solicitor and stated that i thought £60 for wheel trims was excessive and i could buy a new set cheaper. I also had to explain they were wheel trims and NOT alloys. £130 for incomplete service history was not me but the garage the car was purchased from, also if the car had not had a full service history i would not have purchased it nor would GMAC finance it. Finally £64 for stone chip repairs which i told them were on the car when purchased. The lady on the end of the phone was very pleasant and told me she would go back to GMAC with my concerns. 1 hour later she called me back to say GMAC had wiped the cost of wheel trims and service history. I was asked if i could provide proof of the stone chips, which i did not have, so i said just to clear it i would pay the £64.
2 days later i received confirmation that the agreement was cleared and i was no longer tied to any agreement.
Happy Days