Voluntary Termination of HP agreement

DOBERMAN_3

I am nearly at the half way point of a car HP agreement and under the terms of the agreement I can hand the car back with nothing else to pay as long as half the payments have been made.

I am considering this as the value of the car is approx £9000 and I still owe £13000.

Has anyone ever gone through this process and if so did it effect your credit score.

Cheers

Karma67

Just spoke to my hubby about this and he's in the car trade (mechanic)

He said that if you're going to buy another car on finance to replace this car, you need to have that finance deal approved in principal first b4 handing your existing car back, because alot of the car dealerships use the same car finance houses and they communicate with each other, and even though it will not affect your credit history record, it may affect your ability with car finance, even though in theory it shouldn't!

HTH

Turning_into_scrooge

DOBERMAN wrote:

I am nearly at the half way point of a car HP agreement and under the terms of the agreement I can hand the car back with nothing else to pay as long as half the payments have been made.

I am considering this as the value of the car is approx £9000 and I still owe £13000.

Has anyone ever gone through this process and if so did it effect your credit score.

Cheers

I handed the keys back in on my car approx. 2 1/2 years ago now. No problems at all. They sent out someone to collect and asses the car for any damage which there wasn't any so nothing more to pay. I did terminate the agreement by letter so i made sure it was official and no it didn't affect my credit rating, it only affects it if you have payments outstanding which in any case you can't hand the keys back if you owe money. HTH

matthewrayner

Go for it. If you can hot them where it hurts why not. I had a VW golf took out a really bad deal with VW finance. car was worth 7000 had 11000 outstanding. But had paid exactly 50% so I handed it back no penalties and no dammage to my credit rating. Even better still currently VW do not apply the excess mileage charge when terminating. This was a massive saving. Had I if kept the car for the full term it would ave cost me 3000 extra do to excess mileage. Oh boy dd i feel better when the car was driven off!

Xbigman

The thing for everyone to realise is that buying cars on HP is a very expensive way of going about it. Anyone who is concerned about negative equity at the half way point of the HP agreement should never go down this route because negative equity is the rule rather than the exception.

If the OP is going to get another car on HP then there is no point handing this one back because the same will happen again. Keep this one instead, the big financial hit has already happened and can't get much worse. Another car will just cost even more.
Hopefully the OP will buy something cheap they can afford and build up over time to a better car.
Regards




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