Hire Purchase Voluntary Termination

muffle_2

Hi guys,

This is a technical question regarding interpretation of a hire purchase agreement.

I purchased a car on a hire purchase agreement and paid a deposit just over £5400 with the remainder to be paid over 48 months at £602 a month.

I have written to the lender to cancel the agreement as, with the deposit and my payments to date, I will have reached 50% of the agreement paid with £270 to pay. I am in month 17 of the hire agreement (ie. 7 months prior to the halfway point).

The lender is saying that I must hand back the vehicle within two weeks; however I dispute this time scale.

Surely as this agreement is to hire the vehicle, and I have paid half of the agreement (including the deposit, which is noted as an 'advance payment' on the agreement), I should be entitled to keep the vehicle for half of the hire period. I have paid in advance to hire the vehicle for 24 months but they want it back after 17.

If I'm wrong, I would have been better off paying no deposit - I would have paid the same but been able to keep the vehicle longer.

The Consumer Credit Act doesn't seem to cover this but it seems like common sense to me?

Steve

standupguy

From what you say it sounds like a regulated agreement - so the amount financed was £25000 or less?

That being the case you are confusing the 50% rule with half the repayment period - the two are not the same

You can return the car after you have paid half the Hire Purchase price and as you had paid a large front payment you have reached the 50% of the HP price at month 17.

You can keep the car longer and continue to make the monthly payment and vt at a later date if that's what you want to do

Malky

So you want to stop paying and keep the car for another 7 months?
No payments = no car.
I agree with standupguy's reply

ylesia

muffle wrote: »

If I'm wrong, I would have been better off paying no deposit - I would have paid the same but been able to keep the vehicle longer.

I'm not an expert on this but I would have thought that if you hadn't paid the deposit then the monthly repayment would have been much higher and the interest component much higher so after 2 years you would have probably paid more than after 2 years in your current agreement.

I agree with the others that you should return the vehicle now if stopping the payments.

The_Banker_5

I had to look twice there. I thought you said you were paying £602 per month for a car.:D:o

cyril82

What has been said previously is correct. The 50% rule for VT of an agreement relates to the amount paid not the terms of the loan in months/years as the two do not always mirror each other.

Therefore if you have paid 50% of the total repayable and wish to end the agreement you may do so but must return the car now.

muffle_2

The_Banker wrote: »

I had to look twice there. I thought you said you were paying £602 per month for a car.:D:o

Haha, yes, that was fine when I was single and living with my Dad but now I'm getting married and have a child and a mortgage the VT became oddly attractive

Thanks for your responses, I just thought that as it was a HIRE purchase, and they note on the agreement an ADVANCE payment of £5400, that I had in effect paid in advance for those 7 months. The option to purchase only came at the end. I guess I must be wrong. Just means I will have to be skint for the rest of the year to buy another car.