Hire Purchase - Early Termination

RoloMe

Heyas everyone,

First of all i hope i have the right forum for this, if not im sorry

Anyway, i am currently looking to get rid of my car to trade it in for something a little more economical and easier on the petrol. I contacted my finance company who i have the car with and asked them for details on terminating the contract early...this is what they sent me:

"Under the terms and conditions of your agreement if you wish to terminate the hiring then you would need to pay the sum of £2092.03 in order to do so. I would imagine that you are not in a position to do this."

First of all, the payment figure is fine and i am happy to pay this and return the car, there comment about not being in a position is a bit flippant and i am not too impressed with that, but not much i can really do.

However they have also stated in the letter:

"If you wish to take this option [load of rubbish about form filling]...we will then make arrangement with you to either drop the vehicle off or for us to arrange collection. The Vehicle will then be sold and you will be liable to pay back any shortfall".

Now, hold on a minute...*gets up on his high-horse!*.

So, i am filling in paper work and signing to agree early termination, i am paying a fee (and not a small one) to do this as well. But yet, i am still liable for the car!? So in 3, 6, 12 or 18+ months i could have a bill land on my door stop for say £1,000+ for any shortfall? I mean this cant be right, that they have no obligation or liability to sell the car for the best price. As a consumer is it fair that we live like this?

If i am going mad or insane please kick me back off my horse and tell me so. But i just cant believe this is right under any stretch of the imagination...

Look forward to any thoughts/options or rants on this

Many Thanks,

Rolo

welshnoonoo

Isn't there another get out clause with HP whereby if you have paid for over a certain amount (I am not 100% of the fig it could be 50%), you can hand it back and walk away. A neighbour of mine did this recently much to my surprise! I can remember thinking, blimey - I didn't know you could do that!

I have found this:

http://www.consumerdirect.gov.uk/after_you_buy/money_and_credit/hire-purchase/#named3

HTH!

RoloMe

Yeah you can! And i would love to do that...but as the car is only 18 months into the agreement i cant unfortuantly.

Thats what i was told the £2,092 was for, to pay the interest to bring it to that halfway mark.

But i just cant get over them wanting me to be liable for the car still, even after paying them and signing a termination agreement O_o

welshnoonoo

Ah righty - not much help then really was I? Sorry! lol!

RoloMe

Oh no you where!

That link you sent just re-enforced what i was thinking, i have fired off an email to consumer direct and trading standards to see what comes back.

But if you have any more (or anyone else) advice or comments please let me know

Thanks!

CLAPTON

You haven't said clearly what the financials are

how much do you need to pay to be able to hand the car back according to the HP regulations i.e. until you pay half the the total amount?
and how many more payments is that?

brightonman123

what would car fetch on open market? if more than this figure, get dealer to settle direct, and pay YOU any left over!

RoloMe

Thanks for the comments so far everyone, really appreciate it

Clapton - All the information i have from the finance company i put in my first post, im afraid i do have very limited information. However what i do know is that the £2,096 is pay the car to the "Half Way" mark.

Brightonman - Its an idea i toyed with, however shes a bit of a petrol drinker and as shes a Coupe people are avoiding it these days. Although i was at car craft the other day (NOT to buy, just to see what cars where on the market to give me ideas, im buying my new one privately) and they had it listed for £10,000 Cash Price. Now we all know that they are over-priced at car-craft but a search on autotrader suggests around the 5/6K Mark, which is about what i paid for her to start with.

Cheers,

Rolo

brightonman123

quids in then!

milliemonster

Don't you have your original credit agreement?, if not you need to ask the finance company for a copy before you sign anything, it will state on there the total amount payable over the term of the contract and from this you can calculate how much you have already paid aganst how much you need to pay to hand the car back WITH NO PENALTY. This will also give you the opportunity to read the terms and conditions of the agreement carefully.

We did the same thing with a car a couple of months ago, albeit we had paid 30 months into a 3 year HP agreement. I checked on the finance agreement we had paid more than half of what the total amount of credit was for and read the small print to check there would be no further penalty if we handed the car back. When we phoned them we had the option of someone collecting the car (for a £45 fee) or taking it to a local auction house for free, which we did. I checked with them there would be no further financial penalty to us which they agreed and sent written confirmation about.