Voluntary Termination of HP agreement

[trevor b]

I am looking to VT my HP agreement for my 21 month old car on a 41 month contract. Can someone absolutely clarify the difference between “total amount payable”, “amount of credit" and “total amount borrowed”? As the HP agreement is over 41 payments as I see it the total amount payable is my monthly payment x 41.

Therefore so long I have made 21 payments I have, under the formula in Section 100 of the Consumer Credit Act, made payments covering over 50% of the total amount therefore I can VT the HP agreement and have nothing more to pay. Is this the case?

My agreement however states “amount of credit” equalling the total value of the car I am assuming this is different to the “total amount payable”

My contract also confusingly states, in the section Termination: Your Rights, the finance company “are entitled to the return of the goods and to half the total amount payable under this agreement. It does not say half the amount of credit. Surely the “total amount payable” is not the same as “amount of credit”.

If the “amount of credit” is taken as the total amount, as stated in Section 100 of the Consumer Credit Act, the 41 payments I am due the make on the agreement at no point reach 50% of the amount therefore I will never have the opportunity of voluntarily terminating the agreement.

Can anyone help clarify this.

[R0b]

Re: Voluntary Termination of HP agreement

Total amount payable is the amount of the finance, plus interest and any additional costs agreed such as delivery costs etc.

total amount borrowed would likely be the financial amount borrowed (plus interest?).

Amount of credit will be the financial amount for the car.

You can write to them to VT at any point prior to the final amount payable under the agreement, that includes before you reach the 50% mark. If you are under the 50% mark you pay the difference to make up one half of the total amount payable. There should be a clause or section which states you can terminate and what half the total payable amount is, if there isn't you just calculate the total monthly payments made and see if it meets or exceeds half of the total amount payable. The fact that you have made 21 payments out of the 41 monthly payments under the agreement likely means you have met or passed the 50% mark.

[trevor b]

Re: Voluntary Termination of HP agreement

Rob

Thanks for responding so quickly

Under my current agreement it, surely wrongly, appears that it will take me 48.1 payments to pay off 50% of the vehicle cash price as stated on the agreement therefore longer that the total length of the agreement!!!!

[R0b]

Re: Voluntary Termination of HP agreement

Yes that doesn't sound right, If it clearly states the total amount payable, then you just half that amount and calculate your monthly payments by the number of months paid.

I wouldn't worry about where it says 48.1 payments if the agreement is only 41 months, probably an error.

[trevor b]

Re: Voluntary Termination of HP agreement

Thanks for persevering.

I may be being a bit dim but in the Termination: Your Rights section it gives the “half the total amount payable under this agreement” as a figure that equals 48.1 payments well over the total number of payments required therefore I will never reach the 50% point!

The agreement only ever states that 41 payments are required so by actually needing to have made 48 payments to reach 50% are they in effect removing my rights under the Consumer Credit Act?

[R0b]

Re: Voluntary Termination of HP agreement

The fact of the matter is that the total amount payable is X and you need only reach 50% of that. Forget about what everything else says, your agreement explicitly states the total amount payable so it does not matter whether or not the wording says 48.1 months. They cannot remove your right to VT having paid or to pay up to the 50% mark.

[trevor b]

Re: Voluntary Termination of HP agreement

ROb

The agreement has no wording saying 48 payments.

It does say Vehicle Cash price = £21,790 and that "half the total amount payable" = £10,895.00 which is 48 payments.

It also says Amount of credit = £18,588.00

[R0b]

Re: Voluntary Termination of HP agreement

So from what you have said, you need to pay £10,895.00 to meet the 50% mark, if the number of months paid already are equal or greater than this then you can VT, if they are not then you can still VT but pay the difference between what you have paid so far and what is required to make up the 50%.

Just out of curiosity, if the amount of credit is £18.5k, is the rest of that amount for the vehicle cash price made up of interest or something else?

[trevor b]

Re: Voluntary Termination of HP agreement

Rob

Thanks for response, again!

I never expected it to be easy!

The fact that I have to date paid just under 25% of the outstanding amount (with 21 payments) and will never actually reach the 50% point (with the total contracted 41 payments) means that I cannot VT. To me that is removing my rights don't you think.



On the agreement the different between the two figures is identified as an “advance payment”.

This is one of the reasons it’s so confusing if the down payment brings the total down to £18.5k why is the "half the total amount payable" not £9,294.00?

[R0b]

Re: Voluntary Termination of HP agreement

The contract terms do not sound right, is this a local dealer/lender or a well known one? Is there any way you could provide a copy to review, with all personal information removed?

If the vehicle cash price is £21k and you have made a deposit then that should have been taken into consideration. The total amount payable would be the cost including any interest after an advance payment, if there is no interest added then you would be correct in saying half the total amount is £9,294.00.

[trevor b]

Re: Voluntary Termination of HP agreement

Can I attach documents?

[trevor b]

Re: Voluntary Termination of HP agreement

Rob

It's from VW Finance. The actual figures quoted are all over the place as in the Payment section of the contract in that it says I need to make 41 payments followed by a final payment and this adds up to the £18.5 figure not the £21k figure.

The fact still remains that even if I make all 41 payments I will never actually pay 50% of whichever figure they use.

[Amethyst]

Re: Voluntary Termination of HP agreement

If they are classing the deposit as a payment off the agreement then you would be over 50% though - as you'd have paid around £9270 monthly plus £3201.92 = £12471 .... they do seem to be including it as the 'you must pay half' section states £10895 which is half of the full £21790 price. Plus ' the Total Amount Payable comprising Advance payment, amount of credit, acceptance fee, interest and option to purchase fee ' is stated in the first paragraph.

Soooo to have paid half ( £10895 ) you'd need to have paid the 'advance payment 3201.92 plus 34 months of payments ?

[Amethyst]

Re: Voluntary Termination of HP agreement

For ref

100 Liability of debtor on termination of hire-purchase etc. agreement.

(1)Where a regulated hire-purchase or regulated conditional sale agreement is terminated under section 99 the debtor shall be liable, unless the agreement provides for a smaller payment, or does not provide for any payment, to pay to the creditor the amount (if any) by which one-half of the total price exceeds the aggregate of the sums paid and the sums due in respect of the total price immediately before the termination.

[R0b]

Re: Voluntary Termination of HP agreement

[MENTION=79603]trevor b[/MENTION], I think I may agree with you to a certain extent and [MENTION=6]Amethyst[/MENTION] and I have a difference of opinion on this one although I probably need it to make sense so i'll try post something up later