Voluntary Terminaate a loan agreement for a car.

[huw53]

Hi don't know if anyone can help with this. I have today spoken to Santander wishing to terminate my agreement for my car as far as I'm aware its a PCP with a balloon payment at the end and an excess mileage charge. Anyway they told me that I can hand the car back but they will sell it in a car auction and I will then be liable for the difference. Not a good idea I thought!

The heading on the document states " Fixed sum loan agreement regulated by the Consumer Credit Act 1974" and further on in the document it states PCP, but I cannot find any information stating that if i have paid 50% of the total value of the car that I can hand it back.

I'm lost as to what I can do. Any advice please

[R0b]

Re: Voluntary Terminaate a loan agreement for a car.

Hello,

if you are able to upload the documents, removing your personal info I would need to see them to be able to comment any further.

You can either go to www.postimage.org and provide the thumbnail link or if you click the 'go advanced' button, there is a paperclip icon in the textbox, you can upload that way.

[huw53]

Re: Voluntary Terminaate a loan agreement for a car.

Thanks for you're prompt response R0B.
I enclose the info you requested. I'm really annoyed because I had a Mercedes prior to this volvo which was on a PCP. I had 3 months to go on that contract, the Volvo salesman made a big play that i should hand the car back and avoid making these final three payments, he also stated that I could do the same with this car........I think he has made sure I can't, in any event I believe I would have great difficulty in proving the conversation.

[R0b]

Re: Voluntary Terminaate a loan agreement for a car.

Any conversation such as that would be a misrepresentation and as you say, proving things that were said verbally is more difficult than in writing. whilst it is easy to get carried away with new cars and such, always bear in mind that any key information that was said should ideally be in writing or if not, take someone with you to verify what was said.

Having looked at the agreement, there do appear to be some anomalies on this fixed sum loan. As you quite rightly state, there seems to be a balloon payment at the end of the term. My understanding is that a fixed sum loan is a sum of money which is at a fixed rate for a fixed period of time - that seems to go against those principles.

It also states in the box that they "may also take legal action to take back the goods" which would indicate ownership of the car remains with Santander. In fixed sum loan agreements, ownership would pass immediately to you and you can do as you please with it. This is also confirmed by Santander on their website https://www.santanderconsumer.co.uk/...ixed-sum-loan/ or it may be a fixed sum loan with guaranteed final payment as mentioned here https://www.santanderconsumer.co.uk/...final-payment/ (although it doesn't seem to mention your three options). There is also no clause which specifies who owns the car, which you would normally see in a fixed sum loan agreement.

I couldn't see an excess mileage charge could you point me to the relevant section?

Overall I think the terms would appear to be more akin to a conditional sale agreement than a fixed sum loan. I doubt you would get very far with the Financial Ombudsman if you followed through your complaint but you could potentially get somewhere if it went to court, though it could be a 50/50 chance and the risk would be up to you as to whether you went down that route. There is a general principle that the courts look at the substance over form i.e. they will not just look at the title of the agreement but look at the contents of the terms and what the parties intended at the time of entering into th agreement.

[huw53]

Re: Voluntary Terminaate a loan agreement for a car.

Thanks for you're prompt reply. having looked on the Santander links you have included I think mine must be the second option, although it doesn't state that at the top of the first page of my agreement.
I forgot to enclose the mileage charges which are now enclosed