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

[Wombats]

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.

[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.

[Wombats]

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

[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!

[Wombats]

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.

[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.

[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.

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

Thanks.

[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

[tommo]

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

Hi,

I have VT'd an agreement with Mercedes Benz Finance and they are now seeking payment, circa £2000, in respect of excess mileage. The VT was in month 35 of 36

They are claiming that the excess mileage liability was accrued prior to the contract termination. Can anyone confirm whether this is a correct interpretation of S99(2) CCA 1974. If this section is only in respect of missed payments can anyone please point me at some reference to take to court.

Thanks

[Angie123]

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

Apologies if this has already been covered in this thread.

My dad has just passed away and we need to terminate his car finance agreement and hand the car back. Next month, we will have paid 50% of the finance so we are going to let that payment go through and then terminate. The question we have is, although the car is an 08 plate and in reasonable condition for its age, it does have a small dent in the rear but not paint damaged. Should we get this fixed before termination to avoid any hassle or should we just forget it and wait to see what they say?

Given that the person they contracted with has now died, who would they come to for any extra money?

Any advice on this would be really appreciated.

[Nicola0007]

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

Hi guys!! Another newbie here.

Recently I contacted my finance company about VT. I was advised to write in a letter and also emailed unfortunately I didn't send SD so they said they hadn't received anything. My circumstances have changed, I've went back into full time education and can't afford my payments anymore. I was getting the run around so I cancelled my DD as I knew that would make them get in touch. I received the phone call today and explained everything (also my husband lost his job 2 days ago so am glad I cancelled DD) the guy on the phone was really helpful and everything seems pretty straight forward - next letter I'll send SD which will be on Tuesday. I'm a couple months off the 50% but he said an agreement will be made to pay that off. I'm wondering, because I've missed this months payment can they now say I'm not entitled to VT? I didn't think when cancelling DD. also he said about a collection charge, which I read they can't charge, I just want to double check with that and excess mileage? We went over stated mileage for our agreement as soon after we got the car my husband got a sales job which required a lot of traveling. Any help would be great. Thank you Nicola.

[NI2015]

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

Hi

Having serious problems with BMW Finance after VT'ing agreement. I followed all suggested advices regarding initial VT letter, did not sign any forms and returned the car in excellent condition. Nil charges in respect of the vehicle although I did spend about £500 on service, new tyres and other repairs pre-VT.

Currently being chased for an excess mileage charge in the region of £1,100. I have responded twice by letter. First letter stating nothing further to pay as 50% paid (and more) in respect of the total contract price. Second letter sent stating S99/S100 CCA 1974 and requesting that credit invoice is issued for excess mileage charge.

They are advising that I have the option of referring to the Financial Ombudsman and do not accept any of my arguments re statute law vs contract law. They also confirm that Financial Ombudsman has ruled in BMW Finance's favour in similar cases.

A lot of the reading I did pre-VT suggested that excess mileage charge does not have to be paid and examples of people who had invoices credited after challenging finance company. Main article of reference was http://www.thecarexpert.co.uk/car-fi...nation-pcp-hp/. In particular this paragraph:

"Can I be charged for excess mileage?


One of the ways people exploit the voluntary termination clause is with very high mileage. For example, if you cover 30,000 miles per year then your car will be worth much less after 3 years than a car that has only covered 5,000 miles per year. The finance company cannot charge you for high mileage, only any costs arising from “damages if you have failed to take reasonable care of the goods (over and above normal wear and tear)”. If you’ve done 100,000 miles but the car is in good condition, they can’t do a thing – well, other than refuse to finance you ever again."

I have followed all advices re VT and post collection of car.

Not sure where to go next. Any advice would be greatly appreciated.

[Doglady06]

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

Hi,

I was wondering if I could please have some clarification on 'You will be aware that statute prevents you from levying a charge for the recovery of this vehicle; guidelines also state that if you require me to deliver this vehicle it must be no more than a short (reasonable distance) from my registered address' which I got from a draft letter to write to my car finance to voluntary terminate my HP. The predicament I have is when I called my car finance company to enquire about the financial settlement, I was told that I would have to pay £100 for them to pick the car up or drop it off which is 38 miles away. However, I am a wuss and suffer severe panic attacks when driving and I know that I can't manage just the 38 miles, I was wondering if I could state in the letter that I am amenable to a reasonable levy or am I just shooting myself in the foot. I hope that makes sense!

Any advice would be gratefully appreciated.