VT with Close Motor Finance

[woodbane]

Hello! Firstly I must start by saying what a fantastic forum with all the advice, letter templates and all round helpfulness.

I have created this thread mainly to record my journey as I have just initiated the VT process on my vehicle and would obviously welcome any and all advice during the process.

It's a 2011 Ford Focus with 79,000 miles on it on a standard HP agreement over 5 years, no annual mileage limitation that I'm aware of or documented in the agreement and no extra insurances etc. taken out. Didn't buy it new, had it 2.5 years.

Because I drive a lot of miles for my job (didn't know it would be as much as it has turned out to be when I bought the vehicle), the mileage has crept up - although it seems the average is 10-12k a year and working mine out for the age of the vehicle I'm averaging 13,250 a year, so not horribly over average.

Car is in all round extremely good condition, full service history etc. Only complaint I would ever see anyone having is that there are some stone chips/marks on the front bumper & bonnet due to all the motorway driving but I have maintained these with touch up to the best of my ability. I would certainly consider these to be reasonable given the age of the vehicle and the mileage.

So, I am at the halfway point time wise with the agreement and about £200-300 shy of the 50% total value figure stated on my agreement under the voluntary termination section. Got no issue paying that to get the balance where it needs to be.

The reason I am choosing the VT option is that the vehicle is worth so much less than what I can hope to get for it and I have decided to switch in to another vehicle on an unlimited mileage lease. This is already in place and I am using the new vehicle already. Financially, the VT makes the most sense as otherwise I'm likely over £2k in the hole with the Focus.

The Focus is no longer being used but is of course still insured taxed etc. I will be taking plenty of photographs as suggested and also copies of all documentation relating to servicing and the log book.

I called my finance company yesterday (19.4.17) and informed that I would be exercising my option to VT the vehicle. The customer rep I was speaking with immediately responded with "so you want to voluntary surrender the vehicle?" to which I emphatically replied "No, I am going to be VT'ing the vehicle which is something different, I am not voluntarily surrendering".

This was followed by some pushing from pillar to post while they tried to find me the correct person to speak with. I eventually landed with someone that informed me they would be sending a letter I needed to sign regarding condition of the vehicle and that I wished to VT and said the vehicle needed to be in reasonable condition, have service history etc. I'm guessing this is also the letter that will state I become liable for repairs to the vehicle if it's deemed to not be in 'reasonable' condition. I have no intention of signing this letter as I did read another thread where someone signed for the documentation bit and then crossed out and initialed the liability bit but got in to issues as lender and then Financial Ombudsman said they had defaced the document.

I confirmed with this person the mailing address and also an email address for me to send my VT letter to and then the call ended amicably.

I immediately used the template provided on the VT Termination-Your Rights thread and sent an email referencing that a letter would also be sent via signed for, and created a letter referencing the email already sent.

Email was sent immediately giving yesterdays date as the date of the VT being in effect (19.4.17) and the letter was printed last night and will go signed for first class today.

I have a couple of minor questions for clarity at this point:

1. The normal monthly direct debit was due today - which I can see from my bank transactions they have collected, again, no issue with that from my perspective. This will leave my outstanding balance to them around the £200-300 mark. At what point do I/should I then cancel the Direct Debit? I would much rather pay any outstanding balance to them via cheque or bank transfer so I am in control. I am, however, concerned that if I cancel the DD that they will attempt to say I am defaulting on the loan with the usual mark on the credit file shenanigans then taking place.
2. I have given 14 days from the date of the letter for them to contact regarding collection/drop off of the vehicle - is that calendar days or working days?
3. With the letter they are supposed to be sending me - is it generally best to not sign it and send it back with another copy of my VT letter with inclusion of details they ask for other than liability bits? i.e. confirming condition of the vehicle, service history etc. I don't want to put my signature on any documentation I receive from them for the obvious reasons.

I have to admit I'm quite nervous as I've never done anything like this before and it seems like the finance companies have a well documented history of messing people about when you read through the forums.

So I thought I'd keep a log of my journey here for moral support and any advice I may need.

Does it sound like I'm on the right track so far?

P.S REALLY sorry for the long winded post.

[R0b]

Re: VT with Close Motor Finance

Hello,

1. If you sent the email saying the agreement terminated effective immediately you can cancel the DD. If you put a specific date or number of days then the agreement will terminate on that day but if you have a payment due between that time then you must pay it. There is no harm in sending a cheque by post with a cover letter. It is difficult to really say what each lender will do as they are different. Some lenders will employ whatever underhand tactics they can including applying a default claiming you have defaulted but that can't be the case if the agreement is already terminated - I had issues with Santander on this and they eventually settled after I issued a claim against them. The remaining balance will be classed as a debt and although the CCA does not say that you must pay it before the agreement is terminated, it would be reasonable to think that following termination you pay it back either by instalments or in full within a reasonable period of time e.g. 14 days.

2. It is generally accepted that unless you specify working/business days, it will be 14 calendar days.

3. Why sign a letter confirming what you have already done? Again, the CCA does not impose any obligation to sign the lender's paperwork or documentation but to simply give notice to terminate. Lenders documents will normally say something along the lines of you agree to pay all damages, compensation etc. which are described in the damage report. If you sign it, they will use it against you and will no doubt create a whole bigger mess that you have to try and argue to get yourself out of - If you want the stress of all of that, feel free to sign their documents. Whilst the CCA says they can only recover compensation for goods returned in an unreasonable condition as opposed to all damages, it is simply not worth the hassle.

Again, some lenders will refuse to take the car if the documents are not signed and this is where people panic. The law is on your side and if they refuse to collect on that basis that is entirely up to them, you simply play them at their own game by sending a further letter (floating around on here somewhere) that if they don't collect within the next X days, you will sell the car yourself at auction less any reasonable costs incurred. I bet you after receiving that letter they will be out pronto and it has worked quite well previously. Other ways lenders might try and catch you out is by asking you to sign a PDA or some other electronic device which they will then subsequently use to put onto another document and claim you agreed to pay for the damages, so be careful.

[woodbane]

Re: VT with Close Motor Finance

Thanks Rob - I appreciate you taking the time to respond - again, sorry for my lengthy posting.

Brief update - wife just called me as a letter already arrived from CMF today following telephone call yesterday. I will have to look at it when I get home later but sounds like their stock letter they send out saying what will happen next. One thing that caught my ear was wife said although it states on top of letter 'Confirmation of Voluntary Termination' of agreement, in the body of the text in the letter it mentions voluntarily surrendering the vehicle.

This has obviously set my alarm bells ringing but could it just simply be the vernacular they are using to indicate I'm voluntarily giving the vehicle back rather than it being repossessed? Apologies I can't be clearer at this time but I'll have a look later and update further.

Q: If I look at the letter and it does not mention anywhere in any form about further charges, compensation for 'not reasonable condition' etc etc. i.e. is absolutely a straightforward letter outlining that I wish to VT and that we will arrange inspection collection on receipt of this signed letter along with logbook, keys, docs etc etc. - is there any harm in signing and sending beck to ensure procedure moves forward?

I don't want to stall process by them getting in to the whole 'we won't collect if you don't sign' malarkey, even though I know I'll win that argument.

Thanks - Andy

[R0b]

Re: VT with Close Motor Finance

voluntarily giving the vehicle back rather than it being repossessed?

Voluntary surrender has a whole different meaning to voluntary temination, it is sneaky of them but if you have already said your terminating under s.99 that will be deemed VT rather than VS. Nevertheless I'd be wary about signing something like that. VS means you hand the car back and they will sell the car, deduct the proceeds from the total amount remaining on the contract and you have to pay the remainder which is usually more than what you would pay under VT by some margin.

I can't see no reason why there would be an issue but you need to read the documents carefully. Because I am a sceptic and wouldn't trust lenders as far as I could throw them, I would be safe than sorry

[woodbane]

Re: VT with Close Motor Finance

Thanks Rob. I'm in total agreement with you but will reserve final judgement until I see the letter later.

If in doubt, I shan't sign.

Is it ok for me to call them to get a definitive sum to pay to achieve the 50% balance or should I just go on my own calculations and send them a check with covering letter?

[R0b]

Re: VT with Close Motor Finance

It should be fine to contact them but do your own maths too and if it doesn't match up then challenge them as to how they have calculated it - they may be adding extra fees like collection on there.

[woodbane]

Re: VT with Close Motor Finance

Hi Rob, I've attached the letter I received from CMF. It seems fairly benign on the surface of it, just that one sentence on the return acknowledgment they want me to sign about voluntary surrender. Seeing as they give the option on the first page for me to send my own letter and/or email and I've done both - I wont be signing their version.

VT Close Motor Finance (their version).pdf

[woodbane]

Re: VT with Close Motor Finance

Right - figured out how to get redacted PDF uploaded properly - technology!

[seduraed]

Re: VT with Close Motor Finance

Send the email confirmation that you are voluntarily terminating the agreement and then print it off and send it to them. Also keep that letter an hard copy of everything you have sent.

[woodbane]

Re: VT with Close Motor Finance

Send the email confirmation that you are voluntarily terminating the agreement and then print it off and send it to them. Also keep that letter an hard copy of everything you have sent.

Hi, thanks for your input - if you read my opening (and unfortunately, very long) post you'd have gathered I was straight in off the bat with an email and letter VT to CMF. I used the template from this site.

[woodbane]

Re: VT with Close Motor Finance

Quick update - spoke with the head of the collections department by telephone this afternoon.

She was very polite and professional and straight away confirmed I did NOT need to sign the copy of 'their version' of a VT as they already had both my email and hard copy versions.

I asked her to confirm how much balance I needed to pay to hit the 50% mark (I calculated I owed about £200) but she said I had hit the 50% mark and there was nothing left to pay. I asked her to confirm that in writing - and I'll keep chasing that until I get something confirming that either I've hit the 50%, or once the vehicle is returned that the account is closed.

She said my case had been passed to the agents that deal with inspecting and collecting the car and they would be in touch within the next 2-3 days. She asked if the vehicle was fully operational, had a valid MOT, service history and was in good overall condition. She seemed far more concerned that it was mechanically sound than anything - I wonder if they get a lot of people VT'ing trying to hand back cars that really are in shitty condition?

Anyway, I confirmed the vehicle is in all round excellent shape (which it is) and that was pretty much it. Very cordial and to the point.

Let's hope the next stage goes as smoothly!

[R0b]

Re: VT with Close Motor Finance

Well that's a start and even better that you do not owe any more monies, and good idea to get it confirmed in writing which they can't go back on after that.

The agents inspecting the car don't carry out an inspection into the mechanical soundness of the car, neither does Manheim (assuming it's them who do the final inspection) but more of a cosmetic inspection. The questions they ask are generic and will be a way to charge you if something is missing whether its the logbook or service manual or alleged missing spare tyre that was never there - of course whether the car is returned in a reasonable condition is always subjective hence the need to take photos both inside and out and not just close-ups which is what you will tend to see on the damage report as it may give a deceiving account of the car's overall look.

If you are worried about anything then why not create a one page acknowledgement of receipt form. Title the document in bold as "Acknowledgement of Receipt" and at the top you could state something like the undersigned hereby acknowledges receipt of the said vehicle as described below and, having carried out an inspection of the vehicle, agrees that the vehicle is considered to be in a reasonable condition. Set out the car's make, model and registration number along with a signature line, print name and date.

That way, if they say in the future that the car is not in a reasonable condition then you can refer them back and say the agent has signed the receipt form and confirmed that it was in a reasonable condition at the time - sneaky maybe, but play the lenders at their own game and you can explain to the agent you would like them to sign and print the receipt form for your records

[woodbane]

Re: VT with Close Motor Finance

Thanks Rob,

I'm now waiting for proof of my account standing and will send an email to them tonight reminding them of this as well as requesting the have the vehicle collection agents contact me ASAP to arrange for collection.

Q: I am already driving my replacement vehicle and am required to show my proof of NCD by 8 May. Obviously I cannot get this while the current vehicle is still insured awaiting collection. I am hoping that the collection will take place in time to allow me to cancel the insurance and obtain this evidence before the date the new insurers have requested it by. If however, CMF drags it heels on the collection front, am I on solid ground if I SORN the vehicle and keep it on my driveway until collection? I would also be looking at transferring V5 in to their name at this point I assume? I would obviously be notifying them I am doing this.

Many thanks.

[R0b]

Re: VT with Close Motor Finance

If it is on your driveway which is private land then you should be fine to SORN the car as long as it is not parked on a public highway.

I would suggest you perhaps write to them and notify them that you will be cancelling the insurance on X date which means if they do not come and collect it by then, they will need to arrange for their own insurance and tax and that the V5 is then changed into their name (although there is no harm in you doing it now as it may take a few days to transfer the name but also tell them you are doing this and use their address as listed on the agreement). You can notify the DVLA online at https://www.gov.uk/sold-bought-vehicle

If the DVLA do pick up the vehicle as not registered (and there are some dodgy people who will go and remove it from a drive claiming to be on a public highway) they will go after the registered keeper so you want to absolve any chance of you being liable or pursued by them.

Will the current insurer not verify your 7 years in writing? Could you not then pass that to your new insurer and then confirm that as soon as the insurance is cancelled you will forward confirmation of 8 years NCB?

[woodbane]

Re: VT with Close Motor Finance

Will the current insurer not verify your 7 years in writing? Could you not then pass that to your new insurer and then confirm that as soon as the insurance is cancelled you will forward confirmation of 8 years NCB?

Unfortunately not. I called them today and they said that a NCD cannot be used on two policies at the same time (which is quite correct) and so they would only provide me with the proof of NCD upon policy cancellation. The chap was very helpful and did say I could cancel by email and they would respond quickly via email with the cancellation letter and proof of NCD.

I'll be giving CMF until the beginning of next week to get the collection sorted otherwise I shall follow the outline above.

Thanks for your help and advice Rob, much appreciated.