Voluntary Termination of HP agreement

[R0b]

Re: Voluntary Termination of HP agreement

Here's my view of the agreement.

In its simplistic form, the total amount payable is the total amount of the monthly repayments + any option to purchase. Here the total amount of the two sums under this agreement is £18,588.08 (41 x 226.48 + 9302.40).

Now the problem I see with the agreement is that the "Total Amount Payable" is determined as £21,790.00 and this is simply incorrect. There is no interest nor is there any option fees so this is a straightforward calculation: 21,790 - 3,201.92 = £18,588.08. It cannot equate to £21,790.00.

@Amethyst, this is where I think I differ from our discussions as the advance payment must be taken off from the cash price which will leave the total amount of credit (including any interest, options, fees etc.) and that is the true cost of the amount borrowed by the debtor. You can't add together the advance payment plus your monthly repayments to work out the 50% mark for VT. Therefore £21,790.00 is not the total sum payable because an advance payment has been made and it seems like VW have not taken the advance payment into account when calculating the "Total Amount Payable" even though it is acknowledged as forming part of the total amount.


What is the 50% mark?
Usually under an agreement you will be able to VT at the halfway point of the length of the contract however this is not the case with yours.

18588.08 / 2 = £9,292.04 = 50% mark

226.48 x 41 = £9,285.68 = less than the required 50% mark

So as you can see the monthly repayments totalled together does not meet the 50% mark, however s.100 does state 50% of the total amount payable, or any sum less as stated in the Agreement. Unfortunately, the sum stated in the agreement is more than it should be based on incorrect calculations and so your argument will be that you can hand the vehicle back once you have paid £9,285.68. To VT however, you need to give notice before the final payment is made.

You are actually better off because you are not actually paying the half of the amount of the agreement by about £7. Other than that, the contractual information and probably the pre-contract information is not accurate and in terms of remedies for that maybe someone else can help? @Amethyst

[trevor b]

Re: Voluntary Termination of HP agreement

Thanks

Very comprehensive.

So the contract seems to be structured in such a way that a VT cannot be activated or at least there is no benefit in doing so as the total number of payments = the 50% point (give or take £7.00). Therefore VW is surely not sticking to the "spirit" of the law

Given that the Consumer Credit Act is there to help in circumstances where the debtor has perhaps difficulty paying this doesn't really help as he will have to pay the full contract amount (give or take £7.00) come what may!

Very clever and probably almost impossible to argue against in court!

[R0b]

Re: Voluntary Termination of HP agreement

Well, my initial thoughts was that you may be able to argue mistake as to the terms and the contract is void or illegality by virtue of the CCA and the fact its provisions therefore making the contract void (essentially contracting out the VT rights).

I am however not overly convinced that they apply in your case and would probably require further research into it.

[Amethyst]

Re: Voluntary Termination of HP agreement

As [MENTION=71570]R0b[/MENTION] says, I disagree with him.

The VT is based on 50% of the total amount payable. The total amount payable is £21790. Therefore 50% is £10895.

You have already paid £3201 so need to pay a further £7693.08

Your payments are 1 of £226.48 then monthly at £226.48 - therefore you'd need to pay for 34 months to achieve the 50% for VT purposes.

So...... the CAR costs £21790.

You can VT when you've paid 50% - that is £10895.

You pay a lump of £3201 then you have £7693.08 left to pay before you can VT.


your contract is easier to deipher than many because there's no interest/option to purchase fees in the mix. The VT is based on the price ( INCLUDING ANY COST OF CREDIT*), not on the credit.


*that's just for contracts where there is interest etc and not just overpriced car to begin with.

[Amethyst]

Re: Voluntary Termination of HP agreement

Just trying to figure out how to convince R0b...

so if you go with his version you'd have to pay half of 18,588.08 to VT.

That's 9294.04.

So ignoring the fact that in R0b's version your contract doesn't have room for ever reaching 50% without making the purchase option payment at the end, when you have paid the £9294.04 - you have still paid the advance payment of £3201 - so overall you have paid £12495 on a car which cost £21790 - so you'd have paid 57% losing yourself that £3201 completely ( and the car) as you don't get a refund for paying more than 50% - which would be a bit galling.

Though in my mind having paid £10985 to borrow a car for 34 months would be quite galling as well.

[R0b]

Re: Voluntary Termination of HP agreement

I understand how you've reached that, however for some reason I am just not able to agree - I just think it's not calculated correctly, but I'll concede on this - maybe I'm just not having a good day
[MENTION=79603]trevor b[/MENTION], to settle it once and for all is it possible to call them up and ask them how much you would need to pay to VT? At least that way we will be able to understand how VW have calculated it.

[trevor b]

Re: Voluntary Termination of HP agreement

Yup I was planning on doing that and thanks to the discussion I think I know the right sort of questions to ask. I'll let you know what they say.

It will be interesting to see how customer service reacts, heavy handed letter of the law attitude or helpful, we'll see.