Ending a Hire Purchase agreement

[charlie.pask1]

Hi All,

New here so this topic may be elsewhere.

I have a car on HP ive defaulted on it, but the HP company are allowing me to keep the car providing i bring the account up to date.

As i understand it-
If i bring the account up to date and continue to make payments then i may be able to keep the car but this is at there discretion and isn't legally binding.- Which is what they agreed.

The only way to get rid of the car is to arrange for me to return it to them. I will still be liable for the money remaining on the agreement minus the resale of the car at auction. Any money still owed can be paid at a rate that I can afford.

Is there any way in which i can still voluntarily terminate, bear in mind they are allowing me to keep the car and take no further action (although im not sure that this is relevant), and they have issued a default notice which expired on the 13th.

Thanks in advance
Char

[R0b]

Re: Ending a Hire Purchase agreement

Afternoon,

It depends on what the Default Notice letter says, have they actually written to you to terminate the agreement yet, and then said you can keep the car if you make the payments?

Until the agreement is officially terminated then you still have the right to VT. If the finance company have actually terminated the agreement, then your options may be different.

[charlie.pask1]

Re: Ending a Hire Purchase agreement

Hi R0b,

Thanks for you quick reply, unfortunately i don't have the letter in front on me. I will post back on here what it says a little later when im home.

[R0b]

Re: Ending a Hire Purchase agreement

Once you've posted it up (personal info removed) then just tag me using [MENTION=71570]R0b[/MENTION] and I'll pick it up

[charlie.pask1]

Re: Ending a Hire Purchase agreement

Hi @R0b,

Heres a copy of the defult notice, as metioned i intend to pay the arrears and they've said if i do so no further action will be taken and i can keep the car.

I wasnt sure how the image upload button here worked so you should be able to view it using this link.

https://s24.postimg.org/vs4aworo5/Full_Size_Render.jpg

Thanks
Char

[charlie.pask1]

Re: Ending a Hire Purchase agreement

Anybody?

[R0b]

Re: Ending a Hire Purchase agreement

Anybody?

Morning, so from looking at the default notice it would seem than unless the £615.40 is not paid before December 13 then the agreement will be terminated on 13 December. If you failed to bring the account up to date by the prescribed time, then the agreement is terminated and any right to VT is lost.

However, you say that you have been told that if by bringing the account up to date and keep making the payments then they will allow you to continue using the car. That in effect, would create a new agreement between both parties, which would be a regulated agreement and so they would need to comply with the relevant provisions such as pre-contract information, new agreement etc. If they don't then they would be in breach of their statutory duties.

Arguably, if the arrangements stay the same then it is likely that the new agreement would also be a hire purchase, at which point you could VT, but this is where it may get complicated.

If it was found that there was a new agreement in place under the same arrangements, then you would need to pay 50% of the remaining balance under your previous agreement (hope that makes sense?), meaning you have to pay more money to extinguish further liability.

That being said, the new agreement would be regulated under the Financial Services and Markets Act (if the previous HP wasn't already) as the FCA has taken over consumer credit since 1 April 2014, which I would say is more stringent than it used to be under the Consumer Credit Act.

You could perhaps make a case to the Financial Ombudsman and ask that due to their breaches of not providing new documentation in line with their duties, you want to hand the car back immediately without penalty.

Have you now paid the £615.40?

[charlie.pask1]

Re: Ending a Hire Purchase agreement

Morning @R0b, Thanks for this information. I haven't paid it yet i've agreed to pay it on the 23rd December, i told them i could pay on the 23rd on the 13th which was when is was due by but apparently that i was too late and it had "exited default" it then when to the directors of the company to decide what happens next, and they decided that if i make the payment on the 23rd then no further action would be taken. I thought the same that a new agreement would have to be put in place but i was told that i may be able to keep the car but this is at there discretion and isn't legally binding?

[R0b]

Re: Ending a Hire Purchase agreement

Well it is at their discretion yes, because the agreement is now terminated so at present you are now a bailee of the car - someone who is in possession of the goods not owned by you.

The new agreement would only begin if they accept your payment on 23 December and you continue to make payments thereafter.