voluntary termination

[GM071078]

Hi everyone

I really need some advice......

I purchased an Hyundai i10, finance company moneyway

I am currently 19 months into a 60 month agreement.
my monthly payments are 184 per month.

I am now struggling with repayments due to about to lose my job. I called them and asked for an early settlement fee and was told 5600.
I checked the value of the car and it is only now valued at 3500.

Please can anyone advise me what to do?
can I do a VT?

thank you for any assistance
George

[Amethyst]

Re: voluntary termination

From doing the maths on what you have given, is £5600 the amount you need to pay to VT the car ( so only need to pay a further £2k odd ) or the amount they have said you need to pay on top of what you have already paid ?

If you can give us the VT numbers off your agreement that would help.

Did you pay about £11200 for the vehicle finance (ie total credit +cost of credit_any advance payment ? (maybe car about 8k plus 60 months of interest ? )

[GM071078]

Re: voluntary termination

hi and thank you for your reply.

sorry I may have missed wrote it slightly.

I purchased the car with finance.

my agreement is 184 for 60 months total payable is 11,040.

I have currently payed 19 payments of 184 total 3496.
I called the finance company about part ex the car so I could buy something cheaper to get payments down.
they advised my the settlement figure is 5,600 up to 28th march.
I got the car valued for 3,500 which would have me in negative equity of 2,100.

so I feel the option to part ex is not an option
I feel the only option is to VT but have never done this and not sure what will happen and if it is actually an option?

[R0b]

Re: voluntary termination

Be aware an early settlement fee is not the same as voluntary termination, choose your words carefully as you might be liable for a lot more than you think. An early settlement fee is the amount that would be required to pay the remaining contract including any rebate you are entitled to as a result of settling early. So when you want to VT make sure you state you wish to voluntarily terminate the agreement and not settle.

You are entitled to VT at any time, however be aware that should you default and the lender terminate the agreement rather than yourself, you will be liable for the full amount of the agreement. Perhaps your best bet is to speak to them and see if you can take up a holiday repayment which will obviously extend your agreement but give you a bit of breathing space, usually up to 1 or 2 months to try get and find a job and get something in place. Alternatively see if that option is available in the agreement itself.

I wouldn't normally advise this but if you were likely to default after exhausting all other options, then you would be better off VT'ing and leaving yourself with a lesser sum outstanding to pay than the full price of the agreement.

[GM071078]

Re: voluntary termination

If I VT what would I roughly have to pay? I know the market value for my car is roughly£3,000.
Would the outstanding balance have interest ?
I believe 50% of the car loan would be £5,520.
I've payed so £3,496

[Amethyst]

Re: voluntary termination

Then £5520 less £3496 ( so about £2k )

Problem with VT'ing is you then are without a car.

Early Settlement - you get to keep the car, you just pay it off early.

What was the cash price of the car when you took out the finance ? ( If £8k it seems a bit of a big drop to £3500 in under 2 years - but then new cars tend to do that value wise - if it helps my car's just been valued at £50 by webuyanycar .... but then its 22 years old lol )

[GM071078]

Re: voluntary termination

what would be my options regarding the 2,000 difference after VT?

(thank you for your assistance)

[R0b]

Re: voluntary termination

It would be a debt, so you are liable for it and you would need to pay it usually within a reasonable timeframe e.g. 14 days from the date of termination or in agreement with the lender. At this point you could tell them that you cannot afford to make the payments due to losing your job and so an agreement to re-pay in a small amount which will increase upon a change of circumstance such as a new job would be in the interests of both parties than having to take it out to court at the expense of the lender and still not receive any more money - you could offer this by doing a budge sheet or income/expenditure sheet as evidence.

You would ideally want to keep it from going to court as you would get a judgment against you and then have a CCJ on file which would be harmful in obtaining further credit in the future for the next 6 years.

[GM071078]

Re: voluntary termination

What would be the scenario if I just let them repossess the car?

[R0b]

Re: voluntary termination

They would repossess the car, sell it at auction and take that away from the amount oustanding on the agreement then you would owe whatever is outstanding, which would still be more than what it would if you VT'd the agreement. They would still be able to take you to court just for a higher amount and interest and costs added on top and you wil lstill end up with a CCJ.