Redundancy & Car HP

Surfer

We purchased a 2004 Toyota Avensis 1.8 car in August 2007 for £8999 from the Toyota dealer on HP with a monthly instalment of £194.32 which obviously we cannot afford to pay now. In addition, G Brown has recently increased the road tax on this car by nearly £100 which immediately knocked £2000 off the value of the car virtually overnight. At present the settlement amount is £7461.74 so paying it off is out of the question.

If we hand back the car, we will still be liable for the outstanding amount if they put it on auction and it gets sold for peanuts. If we sell it privately obviously we will get more for it but we still expect a deficit of £1500 - £2000 after the sale which would be better than a deficit of £3000 - £4000 if it is auctioned off although we would struggle to py off the £1500 - £2000 as the payments would be lower, we could manage.

Can any one advise on the best options here without us incurring a huge loss or the car being repossessed? I have not spoken to the finance company as yet.

standupguy

You need to check what your liability will be if you handed the car back under a voluntary termination.

What was the price of the car
What deposit paid
What was the term of the agreement?
What is the half hp price figure shown in a box on your agreement?

Surfer

Term is 60 months. Price of car after deposit was £8995 with interest charge incl acceptance charge £2664 with APR 11.3%. Total amount payable was £11660.
There is no half HP price on agreement. Is there supposed to be one? If so, is it based on the full amount incl interest of the value of the car. Is on value still means we have to pay out nearly £3000 to get to halfway mark. It would be better to sell the car and then pay in the difference.

standupguy

If it is a HP agreement you should see two boxes on your agreement detailing your rights on termination and there should be a half HP figure and a third HP figure.

If you cannot see these I am wondering if it is a loan agreement rather than HP?

What does it say right at the top of the agreement?

If it was a HP agreement then it looks like the half figure will be around £5800? and you will have paid around 14 payments? ie £2716 plus whatever the deposit was?

So, if it was HP your liability if you handed the car back under a vt would be about £3000?

If you find it is a loan agreement then you cannot return the car under the terms of the agreement

Next step may be to try and find out the current market valuation on the car

Cumbrian_Male

Speak to the finance company, you can't sell the car and give them the difference to reach the 50% mark as you don't own the car until it is paid in full.

You could ask to return the car and get reduced payments until you pay the difference or try trading it in on a older cheaper car to get finance at an affordable level.

To clarify you can pay the £3000 ish and return the car or complete the original contract. You can not sell the car until the agreement is settled in full.

Go get some trade in values to see what dealers would give you for it, also go to the debt free wannabe's board and get so advice to help you.

Surfer

I have checked the agreement and it appears to be a credit agreement as opposed to a loan. It states that the amount payable when you have reached a quarter of your agreement is £7233. When half lapses it is £5135 and three quarters £2738.
If this is not a HP agreement, can I sell the goods, pay the money into the account and then pay a reduce rate on the balance left for the remainder of the term? The credit agreement is with Toyota Finance and on other letters they refer to it as a Credit Agreement as opposed to a HP agreement.
I honestly thought I was signing a HP agreement and not a credit agreement as this is not made very clear on signing when collecting the car. Also on checking the documentation for the credit agreement although the registration is correct the VIN is a completely different number. Will this have any affect on the validity of the document bearing in mind I would like to hand back the vehicle?

standupguy

It looks like you have a type of loan agreement rather than HP.

These are used usually when you have a small deposit and want a longer term such as 5 years - if HP there is a strong chance you could vt the agreement when paid half resulting in the finance company losing a lot of money as your liability will always be more than the depreciating value of the car.

To stop this they use these type of loan/credit agreements where there is no right to terminate and hand the car back.

As you are the owner of the car rather than the Finance company, the mistake on the vin number may not be something that is relevant in this case?

Toyota Finance may still have registered an interest with HPI and you would need to get this lifted before you could sell it.

You could pay the proceeds into the account but you would not get any benefit from paying less interest as it would just put your account in credit - even if they allowed you to reduce the monthly payment you would still end up paying the full balance on the account.

You only gain and get a rebate of interest charges if you settle the agreement early.

As someone said, it may be best just to speak to the Finance company first and ask them what options you have - see what they say or propose?

Check back with their reply if you want and we can see if what they say is genuine or bull....

Surfer

The other concern here is the VIN on the car which is SB1DR56L00E08xxxx. It is stuck onto the inside bottom of the driver's door on a piece of tape. There is another one stuck on the inside of the left fender under the hood. I thought they were generally on a plate fixed onto your dashboard.
I have checked the VIN on a decoder and it does not seem right for a Toyota Avensis but then I may have read it wrong. Any one with any idea on how to decode the VIN? Thanks.