Terminating Car Loan Agreement

rocket1977

I have heard that you can terminate a car loan agreement and I would like to do this in order to get rid of negative equity.
I am 2 years into a 5 year agreement (FIXED-SUM LOAN AGREEMENT REGULATED BY THE CONSUMER CREDIT ACT 1974) with Black Horse. Can any provide any detail if this is the case and how I go about dealing with it?

standupguy

You can terminate a Hire Purchase agreement once you have paid half the HP price.

Unfortunately yours is a loan agreement and therefore there is no right to terminate and return the goods.

rocket1977

Are there any ways of dealing with this negative equity. I want to change my car but neg eq is causing a problem!

scotsgirl_3

if it is a loan agreement then you do not have rights to voluntary termination - this only exists with Hire Purchase and the sentence above would normally say " this is a Hire Purchase agreement regulated by......"
The only option you will be offered by Blackhorse is a voluntary surrender where they take the car, sell it at auction and you would be left owing the difference - this is unlikely to eliminate negative equity i'm afraid

tictax

You have a loan agreement. The top of the agreement would state that it was hire purchase if it was.

As scotsgirl said you could voluntary surrender and they pay them the difference but with the used car market the way it is at the moment they won't get much for it at auction which will leave you a large amount to repay. This would be similar to part ex'ing the car at a garage.

How much is the balance? What is the settlement figure? What is the car? When did you take out the loan? How much was the original loan?

If you have negative equity the only thing you can do is keep repaying. Do you want to change the car or need to change the car? there is a big difference between the two.

rocket1977

The original loan was for £11600, the settlement figure is £5100, I took it out in Sept 06. I really could do with changing car before it is worth nothing, I have been offered £2300 part exchange.