Car HP Question

[loulouxx]

Hi Everyone,

Long time since I’ve been here as my health has been so bad but I’m stump with this issue.

My Brother took out a car on HP. Unfortunately he got into money problems and cancelled it in Sept 2018. They didn’t come to collect the car until 6/12/18! Now they have written to my Brother saying that they have resold the car and the balance outstanding is now over £5000!

Am I correct in thinking that as it’s an HP as soon as he cancelled the agreement and the car collected the payments stop and he only owes to that date! They have re sold the car too.

[ostell]

No he owes the amount left on the agreement less what they got for the car.

[loulouxx]

Oh right. On the citizens advice it says that if the car or Hire purchase is sent back then payments should cease up until that point? I find the exact quote. It doesn’t seem right that the car has gone back they have re sold it and yet my brother still has over £5000 debt? I mean take brighthouse you pay for the time you have the item and if you get into difficulties they take the item back and end your agreement with them, I would’ve thought it’s the same principle. I understand that he will have to pay for the repairs and cleaning of the car plus fees for recovery which is expected. It’s just not sitting right with me at all I’ve been through other HP questions and it seems that with most agreements it stops as soon as the car/item is returned.

[loulouxx]

Sorry also just to add they have sold the car outright now the rest of the agreement still includes interest charges for the length of the agreement again shouldn’t this also reflect the fact that the car was given back before the end of contract?

[R0b]

Hi LouLou

When you say that he cancelled the agreement, how did he cancel it? If he surrendered the car back to the finance co. Then yes the instalments would end but he would be liable for the remainder of the instalments less the option to purchase price and the proceeds from the sale of the car.

What you seem to be describing is a process called voluntary termination which requires a specific way of terminating the agreement. If your brother didnt follow the correct process, then he cannot rely on it.

It's difficult to assist you unless you can be more specific about how he ended the agreement.

[loulouxx]

Hi thanks for the reply. He now ex partner terminated the agreement. Unfortunately they’re not on speaking terms so I cannot get the information. Taking your reply on board. I’ll speak to them today and see if there’s something I can do for him. His partner has left him with a mountain of debt and fines that haven’t been paid.