Voluntary termination or not?

afcafc · 1 June 2017 at 10:49AM

Hey guys just need some advice on my car situation.
We have a family car and I have just bought another car to get to work and back.
Problem is that the family car is a diesel and it's not getting the mileage it needs hence the particle filter is playing up and management light is coming on. Therefore I'm thinking it would be better to get a family petrol car (must be an auto due to wife)
Current family car finance
To pay £9400 over 4 years
Half way point VT stage £3400

I called my finance company and they explained I can VT after that amount is paid.

I just need some advice weather that's the best way to go about it or not? Cars value is 5k last time I checked as well. Just trying to save the mode money either way.
Any help would be great

National_Debtline · 1 June 2017 at 1:04PM

Hi there,

You can voluntarily terminate a Hire Purchase agreement at any stage, as long as the lender has not defaulted the agreement. You will be liable for 50% of the agreement, minus the money paid to date, plus any excessive wear and tear on the vehicle.

If you terminate before you have paid the 50% then you will have to pay the 'shortfall' in a lump sum. You must work on the total amount repayable when calculating the 50% amount. If the total amount repayable is £9400 then 50% is £4700. If you are not in financial position to do this then you can negotiate instalments, but this can damage your credit file and the creditor does not have to accept your instalments and could chase with debt collectors or in the county court.

We do have a factsheet about this that may help - https://www.nationaldebtline.org/EW/factsheets/Pages/hire-purchase-debt/hire-purchase-and-conditional-sale.aspx and it may also help to post a SOA. Good luck,

Laura
@natdebtline

afcafc · 1 June 2017 at 2:33PM

Hi there

Thanks for your reply.

I am already aware of what you wrote. I only have 3400 left till the halfway point as i originally had the loan over 60 months.

I just wanted peoples advice in terms of what they would do in my situation.

I would have to get a family car and would be looking at around 4-5k if I terminated

help please!

Nearlyold · 1 June 2017 at 4:51PM

You could just take the current diesel car for a regular "Italian Tune Up". Unless you've got the £3,400 already stashed away its going to be another 17 months of loan repayments before you're in a position to VT.

Why not post the DPF issue on the motoring forum giving details of make model etc.

forgotmyname · 1 June 2017 at 5:04PM

Pay £3400 to the finance company not to have use of the car and then another £4000 or £5000 for another car. OUCH!

Or pay £200 to get the DPF cleaned or sorted and then take it to work occasionally or give it a good run once a week?

afcafc · 1 June 2017 at 5:17PM

Cheers for the replies guys

Think i will hold onto it for 17 payments, then change it for a petrol once i get to the halfway point. THerefore im using the car and paying for it.

Thanks for the advice

Voluntary termination or not?

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