PcP finance

[Klr]

Hi all,

just after some some legal advice regarding my Hire purchase finance, unfortunately when I took out the finance I was far too excited about the car and wasn't really paying attention to the financial aspect.
So, in November 2014 I got a Audi A3 on hire purchse, I thought it was a 36 months deal ending in November 2017, turns out that's not the case and it's January 2019 according to the finance company.
Anyway, my lovely little Audi is a 3 door and I have twins on the way so, can I just give the car back? If I can how do i do it?
Its got full service history and is well under the mileage. Obviously it's deprecated in value but I feel slightly annoyed I will be paying for a car that's not going to work for me until 2019 and I'm probably not going to be able to afford on maternity leave.

Also going through the paperwork I found I have a little thing called cosmetic cover....nice!

Any help would be appreciated as the legal jargon is baffling.

[HelenaTroy]

Re: PcP finance

I'm unable to give you legal advice, others on here are qualified to do that, thankfully.

What I do know though, is if your pcp deal is with Audi Finance, it'll tell you on your agreement exactly how much you should have paid in repayments before you can hand your car back without any financial penalties and without it affecting your credit reference file.

The amount you should have paid is 50% of the amount that's been financed (including the interest).

I don't know if there's any other way to get out of your agreement, other than try and sell it privately (although it's likely your car's value may be less than the amount owed) or perhaps take out another finance deal to
pcp (or lease) a new car! Audi may already have offered a new deal, they often do that when your current car is in for a service.

[pt2537]

Re: PcP finance

Hi all,

just after some some legal advice regarding my Hire purchase finance, unfortunately when I took out the finance I was far too excited about the car and wasn't really paying attention to the financial aspect.
So, in November 2014 I got a Audi A3 on hire purchse, I thought it was a 36 months deal ending in November 2017, turns out that's not the case and it's January 2019 according to the finance company.
Anyway, my lovely little Audi is a 3 door and I have twins on the way so, can I just give the car back? If I can how do i do it?
Its got full service history and is well under the mileage. Obviously it's deprecated in value but I feel slightly annoyed I will be paying for a car that's not going to work for me until 2019 and I'm probably not going to be able to afford on maternity leave.

Also going through the paperwork I found I have a little thing called cosmetic cover....nice!

Any help would be appreciated as the legal jargon is baffling.

Do you have a copy of the credit agreement? if so, could you redact the personal info and post a copy ? under the consumer credit act you do have the right to voluntary terminate the agreement and hand the car back, but there are certain conditions that must be met first if you are to be able to hand the car back and walk away without paying anything further

[Klr]

Re: PcP finance

I shall get the info and post again.
thanks for your help.

[Klr]

Re: PcP finance

I have found the pre contract credit information. I don't appear to know how to upload a photo on this site on my iPad.

[Klr]

Re: PcP finance

This is what the Pre contract credit information says:
key features of the credit product:
the type of credit-hire purchase
the total amount of credit £20,800
this means the amount of credit to be provided under the proposed credit agreement or the credit limit.
How and when the credit would be provided- credit will be treated as provided and drawn down when the agreement comes into effect. This agreement will come into affect when you have signed it.

The duration of the credit agreement- From when you sign the credit agreement until the date specified below in repayments on which the final payment is to be paid.

Repayments- You must make
one payment of £289.64 (which includes the acceptance fee of £125.00) on a date set by us (which will be at least one month after the start of this agreement) followed by -
47 monthly repayments of £289.64 on the same date of each successive month followed by
- a final payment of £11, 518.75 payable 48 months after the date set for the first repayment.
To exercise the option to purchase the vehicle you must add the option to purchase fee of £60.00 to the amount of the final monthly payment.

The total amount you will have to pay -this means the amount you have borrowed plus interest and other costs. The proposed credit will be linked to the supply of specific goods or the provisions of a service- £28,281.47
cash price- £23,600.00

[R0b]

Re: PcP finance

Given your circumstances you have two options.

First, you can VT the agreement and repay the 50% in accordance with the terms of the agreement and the VT rights and obligations. I won't explain this as its set out on here already with detailed threads and posts.

The other option, which is more unusual and I've never done before, is to VT the agreement but then make an application to the Court for an order that you pay a lesser sum than the 50%. This is under section 100(3) of the CCA which says

If in any action the court is satisfied that a sum less than the amount specified in subsection (1) would be equal to the loss sustained by the creditor in consequence of the termination of the agreement by the debtor, the court may make an order for the payment of that sum in lieu of the amount specified in subsection (1).

This type of argument is usually of benefit for example where someone has purchased a brand new car but only had it for a couple of months before returning it. For example, if you purchase a brand new car for £20,000 and the interest is £2,000 then the total price being £22,000 over 4 years. You've had the car for 2 months and paid £500 already before you want to return it. Let's say the car is valued around £18,000 at the time after taking into account the depreciation plus your £500 you've paid already, you would say that the lender's loss would be £3,500 which is the difference between the car's value, the amount you have paid and the balance outstanding on the contract.

This is in stark contrast if you say, VT the agreement and pay 50% which would be £11,000. Not only have you paid £11,000 but if the car's value is £18,000 thats a total of £29,000 which is a £7,000 gain for the lender.

Does that make sense?

In your case, you've had the vehicle for some time now so if you are going down the route of section 100(3) then you would be best to get the car appraised as to its value, perhaps by looking online to free valuation sites such as WhatCar and also getting a value from several dealerships and take the average from those quotes. You could then argue that if the value of the car in its current condition, plus what you have paid means that their loss under the contract is much smaller than the 50% amount you have to pay under section 100(1).

As said above, I've never used section 100(3) before but I'd imagine you would have to instigate proceedings yourself, or if the lender didn't agree and issued proceedings against you, then you would counterclaim by saying they should be owed less. There is a risk but you have to weigh up your options.

[Klr]

Re: PcP finance

Thanks so much, so helpful.
I have received an email today from Audi that confirms that I can VT once I have paid 50% which will be in march 2018 roughly, if I continue with monthly payments rather than paying the shortfall of £1700 now.
they also set out some other terms and conditions such as the vehicle must be
Taxed
· MOT’d
· Fully comprehensively insured

The vehicle will also need to have –

· The V5 document
· The service book history
· Both sets of car keys
· The original registration back on the vehicle (if a personalised plate has been placed on the vehicle.

i can do all of this, so I am not too worried.

i have just found a wonderful bit of paper for cosmetic cover so hopefully can get s few sctraxhes out as I am sure they will try and charge for Minor damage under the fair wear and tear...audi do have a handbook which is quite detailed luckily.
I am well under the milage so not worried about that.

i have just asked how long the processs takes as I obviously don't want to start it until Feb time but I am mindful these things take a while to proses and I don't want to pay Aprils instalment unnecessarily.

can you think of anything else I need to cover!?
thanks again for help.

[R0b]

Re: PcP finance

If you have some kind of insurance cover that will help you with the cosmetics then certainly use that to your advantage. There is numerous other types of cover available that you can find online which may also be suitable although it wil ladd extra cost to you but you can also usually transfer the policy to the new car when you sell it.

For example, you can get alloy wheel insurance over one year for around £100 and the excess for any alloy repairs is either free or as little as £10 and they will refurbish them for you - they can assist especially when there is disputes around the damage to the vehicle and alloys are one of the common issues. Obviously these are additional expenses so you have to decide if they are worth it to you.

Wouldn't worry too much about the tax and insurance because once the agreement has terminated, your obligations under it fall away. For namesake though you might want to keep the tax and insurance for a reasonable period of time after termination so they can collect but if they don't then you have grounds to cancel.

I would follow the VT Guide in terms of the checklist, photographs are important but I would also take a photograph of all of the documentation and keys etc. so if they say something wasn't included, you have evidence to say it was.