Handing my car back

cureforsanity

Hello all,

As I'm an utter green newbie here I must apologise beforehand if this topic should be posted elsewhere. Anyway, I'll attempt to explain my situation as clearly and precisely as possible:

My wife 'bought' a car 4 years ago from carcraft over a 5 year term. Recently she has started working for my company and we approached our contract hire car supplier to see if they could do anything to upgrade the vehicle as it had started to become rather expensive to maintain (it's now 6 years old), and we still have 14 months payments to make.

The contract hire car will work out much cheaper to 'own' and run over the 3 years and we get free road tax, can put it through the business etc.....

We were advised that under the CCA 1974 if she had paid more than 50% of the total sum then she could hand the car back. We faxed the paperwork to the contract hire company so they could do their deliberations before we went ahead and they agreed that we could indeed hand the car back, and as there are no arrears and the car is in reasonably good condition we shouldn't have any comeback.

Duly she posted the standard letter off to 'the funding corporation' and today we have had quite threatening phone calls to say she can't do this. FIrstly they said it 'wasn't that kind of loan', shifting afterwards to 'it's a motorloan so it doesn't apply' finally deciding that it's a personal loan and not an HP agreement.

We've contacted the contract hire company before she takes delivery of her new car and their legal advisor tells us that according to the HPI check they did, there is money outstanding against the car so it has to be secured on the car, therefore it must be an HP agreement and not a personal loan!!!

Anyway, I don't really know where to do next, there is nowhere on the agreement which actually states what kind of agreement it is, but the funding corporation are adamant and say if we don't pay the next DD instalment then they will charge us against the house and if we still don't pay then they will reposess our house!

Bear in mind that the agreement was taken out 2 years BEFORE we took out our mortgage and were living in rented accommodation.

Has anyone else gone through this, and what could anyone advise??

Thanks all!

lawrie28

your agreement should give you some idea of the type of finance. does it specifically mention the car on the agreement, is there a final option to purchase payment etc.

just out of interest, why not sell the car and settle the finance early? I think that handing the car back can have an effect on your credit rating, but not 100% sure.

if you are putting the contract hire through the business then the tax benefits have just changed in your favour, so well done.

cureforsanity

Cheers Lawrie,

It does specifically mention the car on the agreement, and there is also a statement to say there is an option to pay the debt off early for a rebate.

Problem is, we reckon the car is worth £2K tops, and with 14 payments of £278 to go PLUS a final payment of just over £400 we hardly reckon it's a viable option.

We've also worked out that they've had so far about £3K in interest from the agreement which is no mean feat, so I can't really understand why they are being so bullish about it except for the end to trying to squeeze every penny they can from us!

BTW there is nowhere on the agreement with a reference number, agreement number, or even a statement referring to quarters, thirds and halves!

The legal advisor at the contract hire place thinks there is a good case for us being mis-sold this item and may have a good case for a compensation claim.

It's all put very simply but like I said, there is nowhere on any of the documentation where it states exactly what kind of agreement it is, just that it's an agreement!

cyril82

Finance companies hate getting given back cars, they are in the money business not the car business so to them it's just a headache they don't want, but that is not your problem.

If the debt is showing on the hpi check then you have got an hire purchase agreement, if that agreement is regulated by the consumer credit act, which it should be, then you will be entitled to hand the car back, known as a voluntary termination.

the h.p company can not repossess the vehicle without a court order once you have paid over one third so you are well past that marker. And, given the amount paid, i.e the fact you're 4 years into a 5 year agreement with no arrears, they would be lucky to get a repo order on the car if you were 3 or 4 months in arrears. They definitely have not got a cat in hells chance of getting a charging order on your house as if the court gave them anything it would be the car, but again, only if you were severely behind on payments.

Do you have a copy of the original agreement? if you do it will say somewhere, usually at the top of the first page, that the agreement is regulated by the consumer credit act ant it should detail your right to V.T after half is paid.

cureforsanity

Thanks for that Cyril,

We have the original agreement and it does indeed say that it's regulated by the CCA, although the two young ladies I spoke to at the funding corporation reckoned that it didn't matter!

As I said earlier, they can't make up their minds what kind of agreement it is, nor does it say anywhere on it except that it's regulated by the CCA! There is nowhere where it details the VT, indeed the only mention of anything remotely like that is regarding our right to pay off the balance early.

Th tax runs out at the end of the month so I've put it on a SORN, cancelled the insurance (though effectively it's merely being switched to the new vehicle) and informed them that the direct debit has been cancelled so not to bother trying to take the money then charging us £75 when it's not there to be taken!!

It will be put on the driveway until they decide what to do with it, though the funding corp !!!!on it's been my wifes from day one and is ours to do what we want, just so long as we keep repaying the money!!

My head hurts.............

cyril82

if the agreement is not drawn up right then it is probably unenforceable anyway, just send them a V.T notice stating that you have a H.P agreement with them that is regulated by the cca and as such you understand that you are entitled to V.T when 50% or more is paid and would therefore like them to arrange to pick up the vehicle or arrange for you to drop it off within fair distance, (usually defined as the same distance as where you bought it from). Send the letter recorded and keep a copy youreself.

If the agreement is regulated by the cca then all the provisions of the cca apply, even if they don't tell you in the agreement, that just means they didn't fully inform you of your rights under the agreement, which is worse for them than it is for you.

cureforsanity

Sorry about the pun, but 'Nice one Cyril'! :T

Yep, done all that, said I'd drop it off within 25 miles and its in good nick with wear and tear expected of a 6 year old car.

I need to know that I'm right and within my rights as they seem intent on trying to wriggle out of the agreement.

I'll be on first thing in the morning to see if it's possible to get the agreement nullified if it is unenforceable which everyone who knows about these things seems to think, except for our fiends at the funding corporation!!

~Brock~

Caution.

The advice by Cyril is flawed. It is wrong to assume that just because the finance shows up on HPI then it must be an HP agreement. It could be that the finance company is simply noting an interest in the vehicle even though the finance is not actually secured on it. Black Horse do this a lot for example.

The fact that you state your agreement does not mention termination rights leads me to suspect it is not HP, however, the heading of the agreement will say what type of agreement it is. What does it say?

PS: Only consider starting an unenforcibility challenge if you are 100% sure of your facts and are prepared to have your credit rating trashed. DO NOT pay fees to anyone in connection with this.

cyril82

~Brock~ wrote: »

Caution.

The advice by Cyril is flawed. It is wrong to assume that just because the finance shows up on HPI then it must be an HP agreement. It could be that the finance company is simply noting an interest in the vehicle even though the finance is not actually secured on it. Black Horse do this a lot for example.

The fact that you state your agreement does not mention termination rights leads me to suspect it is not HP, however, the heading of the agreement will say what type of agreement it is. What does it say?

PS: Only consider starting an unenforcibility challenge if you are 100% sure of your facts and are prepared to have your credit rating trashed. DO NOT pay fees to anyone in connection with this.

Sorry, but that's wrong. The chances that the loan is showing up on an hpi check and the agreement is not hp are as slim as a ciggarette paper. The only other way of securing the loan against the car is by bill of sale, but these often don't show up on HPI checks. The agreement is governed by the consumer credit act therefore the provisions of the act apply, whether the lender informs the client of those provisions or not.

Also, requesting a copy of the cca, is the first step in any unenforceability challange, which is not what we are discussing, we are discussing voluntary termination, and there is no risk to anyone's credit rating by requesting a copy of the cca, also, if a client disputes their agreement through the proper channels, even if they are wrong it can not relfect on their credit file, they have the right to question an agreement if they feel it is flawed.

Terrible advise.

angelicmary85

Cyril,

I thought I had an HP agreement but it actually turned out to be a personal loan. I went to a dealership and they arranged it through Barclays and the car isn't secured on the loan...now I'm stuck with a loan I don't want as I tried to give the car back aswel!

cyril82

angelicmary85 wrote: »

Cyril,

I thought I had an HP agreement but it actually turned out to be a personal loan. I went to a dealership and they arranged it through Barclays and the car isn't secured on the loan...now I'm stuck with a loan I don't want as I tried to give the car back aswel!

yes but this loan is secured on the car as there is finance showing as outstanding on the hpi, unsecured personal loans do not show up on hpi checks.