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

[R0b]

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

Hello,

Apologies for the delay, only briefly looked at your issue [MENTION=99769]adaw[/MENTION] so cannot comment in full (I will later today) but for the purpose of the total amount payable the deposit is included as part of it. A deposit essentially helps to reduce the monthly instalments rather than count towards 50% of the total amount when you choose to VT.

As for the insurance, GAP insurance is commonly added to the total amount payable so unless it is a separate agreement with a separate direct debit or payment method, I can't see how you can be liable.

Like I said, I will take a proper look around lunch time and get back to you on this.

[Nicad]

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

Hello, just found this site after looking around Google to try and find an answer to my situation regarding VT.

Basically, I took out the car (bought brand new at the time) on a 3 year ford credit agreement.. But my circumstances have now changed, and it looks like I will be taking early retirement, which means I will not be able to afford the monthly payments on this car anymore.. I have paid 1 years worth of payments, and am nowhere near the 50% figure that finance companies require people to reach before VT can be triggered...

My question is, is there any other method of getting them (either Ford, or the finance company) to take the car back now? I have had a conversation with some monkey on the phone at the finance company about this, but they flatly refuse to allow me to VT now.. There solution was for me to sell the car privately and then pay the loan off... I don't want to go down this route as selling cars privately is not that easy imo, and then probably wouldn't get back enough money to pay the loan off anyway... Anyone have any ideas?

Regards

[R0b]

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

[MENTION=99769]adaw[/MENTION],

I've had a look through the contract pages you have uploaded and I agree with Amethyst on what she has said.

As for the insurance, this may be a bit trickier and without seeing the full terms and conditions, I am only able to speculate on whether it is owed or not.

Were there two separate DD coming out of your account, one for the car and one for the insurance or was it one DD with one single payment covering both?

The information you have supplied doesn't say that you must pay the total amount payable under the insurance despite termination of the agreement. If somewhere in the terms says you must pay it regardless of terminating the agreement, that would be the starting position. However, it is arguable that such a term may be considered an unfair one especially if you VT because you are no longer in possession of the car after exercising your right and may be seen as a deterrent/penalty. Equally, there may be an entitlement to a rebate for the remaining months not used less an admin fee - you would need to check whether this payment would be made to you or Citroen.

On the other hand, if the contract is silent on what happens if you terminate early, particularly when you VT, then it is also arguable that the insurance payments would also terminate when the agreement itself terminates, without any further payments necessary. Arguably, this is because when you VT, you are handing the car back and are not in possession but also your liability is limited to 50% of the total amount payable, extending not only to the car but also any additional products included within the agreement.

Before you embark on any route, you might want to make further inquiries and read through your contract to understand what it does and doesn't say. The likelihood is that if you dispute the matter you will more likely than not end up in court whether it is you bringing a claim or whether it is Citroen. If you want to avoid any possible legal proceedings then all I can say is pay the insurance money or come to some agreement to repay in instalments but not before you check the position on any rebate, in case that rebate goes back to Citroen and then you can deduct such rebate from your repayment.

Hope that helps, but any questions feel free to ask.

[lee7]

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

Default Car finance help
Ok so I took out car finance in nov 15 and can not afford to keep it anymore as my partner is expecting and the bills just keep mounting up.

What are my options ? am I only liable for half the some ?

Really don't know were to start

[R0b]

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

Default Car finance help
Ok so I took out car finance in nov 15 and can not afford to keep it anymore as my partner is expecting and the bills just keep mounting up.

What are my options ? am I only liable for half the some ?

Really don't know were to start

Hello,

Have you received a default notice from the lender? Or are you saying that you have missed a payment (or more)?

If you are struggling to keep up with the repayments you could exercise your right to terminate the agreement which would limit your liability to 50% of the total amount payable. If you only took out the finance in November 2015 then I am going to assume you haven't reached 50% yet? That doesn't prevent you from terminating the agreement and coming to an arrangement to make the repayments by instalments until they have been paid off.

As soon as you provide more information, I can assist further.

[adaw]

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

many thanks [MENTION=71570]R0b[/MENTION] - I have just made a payment to the finance company and will soon be sending out the VT letter. Can I then cancel my next DD or will that cause problems? I'm worried that if I don't cancel it it will be taken out...

[Purpleparrotuk]

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

many thanks @R0b - I have just made a payment to the finance company and will soon be sending out the VT letter. Can I then cancel my next DD or will that cause problems? I'm worried that if I don't cancel it it will be taken out...

Hi. Hope you don't mind me butting in. I have just done the same thing. You should not cancel the direct debit until the car has been collected. If a payment comes out before the car is collected it gets refunded. That's what I was told today anyway.

[lee7]

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

Thanks for the reply [MENTION=71570]R0b[/MENTION]

I have missed one payment , which they agreed could be spread out over the next 3 months to catch up, so no default as of yet.

so I owe just over £10,000 on the agreement so would I only have to pay half of this back and would that be coverd by the sale of the car at auction ?

Thanks

Lee

[adaw]

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

Hi. Hope you don't mind me butting in. I have just done the same thing. You should not cancel the direct debit until the car has been collected. If a payment comes out before the car is collected it gets refunded. That's what I was told today anyway.

Don't mind at all! Many thanks for the advice.

[R0b]

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

Thanks for the reply @R0b

I have missed one payment , which they agreed could be spread out over the next 3 months to catch up, so no default as of yet.

so I owe just over £10,000 on the agreement so would I only have to pay half of this back and would that be coverd by the sale of the car at auction ?

Thanks

Lee

So just to clarify they have not sent you a default notice letter?

If the total amount payable is what you suggested being a little over £10k then yes you would only require to pay 50% of that.

In your contract there will be a heading called "Termination: Your Rights" which will tell you how much the 50% mark is. The lender has the right to have the car returned and sell it and keep whatever they make, it does not get deducted from the 50% of what you owe.

Your right to VT is lost if the lender terminates first so you should do this before they can terminate the agreement i.e. once they've sent you a default notice letter and you fail to make the payment within the specified time on the letter, however you can VT during the time period specified on the default notice.

- - - Updated - - -

Hi. Hope you don't mind me butting in. I have just done the same thing. You should not cancel the direct debit until the car has been collected. If a payment comes out before the car is collected it gets refunded. That's what I was told today anyway.

@adaw, @Purpleparrotuk If you have given written notice to the lender and specified when the contract will end e.g. immediately or 14 days etc then the contract will terminate according to the content of your letter or in any case a reasonable period of time which is more difficult to work out if its not been agreed.

Once the contract is terminated you can cancel you DD as you are under no obligation to make any further instalments, unless you have not yet paid the 50% which you will then need to come to an arrangement with the lender to repay the outstanding balance.

[AJC]

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

Hi,

We're considering a VT from a HP agreement with a private finance company.

The original total amount payable was £24,871.54 over a 4yr period. When calculating the 50% termination figure of £12,435.77 does it take into account the guaranteed future value of £7,607.50?

If it doesn't then by the time we will have repaid £12,435.77 we will only have a few months left to run and surely the point of VT is to end early?? We have looked into trading the car in but there is a shortfall of over £4.5k and selling privately has to date only brought trade enquiries offering a similar figure.

We've currently repaid over £7,500 in monthly payments, which adding the GFV is a total of over £15,000.

Are we within our rights to terminate now and hand the vehicle back with no further payments?

Thanks in advance.

[lee7]

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

Thanks again for the reply [MENTION=71570]R0b[/MENTION]

So to clarify I would still have to pay roughly 5k (50% off the amount left) and the sale of the car would not be deducted from this 5k ?

And I would need to do this before I get a default notice ? If I get a default and lose the right to VT would I have to pay all the 10k back and would the sale of the car not be deducted from that ?

Thanks

Lee

[R0b]

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

Lee you can VT even if you receive a default letter, but if you fail to pay up or VT before the date stated in your letter you will probably lose the right to VT. This is because once the lender has terminated the agreement, you cannot VT.

If the lender does terminate before you VT, then you will owe the full balance of the agreement less:

- the total sums paid to date
- the proceeds of sale from the car
- option to purchase price
- a discount for the acceleration of payment to the lender, usually represented by the statutory rebate of interest

[lee7]

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

Hi [MENTION=71570]R0b[/MENTION] I'm a bit confused so I will post all the figures and see what you can make off it if you wouldn't mind

Total amount - £14,632 (50% £7,316)
Amount paid - £3,558.75

So would that amount Iv already paid come off the half figure (£7,316) leaving me a shortfall off £3,757 ?

Can they and would they demand payments of this money even if I couldn't afford it ? Is there a minimum they would except on a monthly basis ?

Thanks

Lee

[R0b]

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

If you VT the agreement then you are correct in that is how much you would owe under the agreement. However if the lender terminated the agreement then the following is an example of how it would be calculated - the figures are examples only.

Total amount payable= £14,632
LESS

Total paid to date = £3,558.75
Proceeds of Sale = £3,000
Option to purchase price = £1,500
Interest rebate on remaining months left immediately before termination = £475.00

Total amount outstanding to pay = £6,098.25

As you can see, your liability is likely to be much less if you VT rather than allow them to terminate the agreement themselves. If you do VT then the lender should have an obligation under the FCA rules to assist you and allow you to come up with a reasonable repayment plan. You should offer a reasonable sum of money you can afford based on your income and expenditure and taking into account your living circumstances. If the lender refuses to accept the repayment plan, you could make a formal complaint to them and if they do not uphold your complaint you could take it further to the Financial Ombudsman. They will look at what is fair and reasonable taking into account the circumstances, if the Ombudsman then upholds your complaint and you accept it, then it's legally binding.