Northridge Finance unregulated car finance agreement - please help!

rensters

Hi, I'm after a bit of friendly advise please indeed!

My husband and I have gotten ourselves into something very stupid indeed and feel like complete fools!

2 years ago we took out a 48 month finance agreement with Northridge Finance for my husband's car. It was for a total repayable amount of £35,848.47 (stupid, I know).

The monthly repayments are £579, which was fine at the time as my husband's job came with a car allowance that covered this amount, but now he has lost his job and we have no way of keeping up the repayments.

My husband spoke to Northridge today to discuss our options and they told him that the agreement was unregulated as it was for more than £25,000 (although we had no idea at the time that this was the case - the agreement doesn't state it isn't regulated and no-one told us this or what it meant). I understand that if it was regulated, once we had paid half the amount, we could return the car and end the agreement, but because it isn't we have no such option.

They told us we could pay half the monthly amount this month and half next month and then go back to paying the full monthly amount in August and the 'missed' amount would be added on at the end. The other option was to settle the agreement, but the settlement figure is £19041 and the car is worth £11000 if we're lucky!

My husband has no hope of finding a job any time soon in this climate and certainly not one that will pay enough for us to carry on paying monthly for the car. I'd much rather not have the car and settle the agreement some how, but have no way of raising the cash.

I'm in real need of some constructive advice - I know we've been really stupid taking this on and we will have to pay through the nose for it but I'm just not sure what we should do for the best. Any help would be very much appreciated

ILW

Can you sell the car?

epsilondraconis

Was the loan secured?

rensters

Hi, thanks for the replies. We can sell the car - they have suggested this, but we will only get £11000 max for it - leaving a shortfall of just over £8000.

The loan wasn't secured, using our home or anything, but obviously the car is theirs - think it's a HP agreement.

Any suggestions would be very much appreciated!

standupguy

As the agreement is unregulated you have very little rights.

You could re-iterate your position and ask for a lower full and final settlement - unregulated settlement figures are loaded with lots of profit as there are no controls over rebate of charges that you would get with a regulated agreement.

You could ask them for a capital outstanding figure and ask if they would accept that amount given your circumstances - you would still have to sell the car for the best price and then add to it to settle the agreement - you may get say up to another £1500 off the settlement figure?

Your other option might be for your husband to contact his employer and explain the financial diffficulty you are in to see if they are prepared to assist - you need to look at exactly what their policy was when it came to purchasing the car etc, for example if it was a requirement to have such an expensive car then that may be considered unreasonable?

I would be going through the company car policy with a fine toothcomb to look to see if you have recourse?

rensters

Thanks so much for your advice.

We have already looked at the company car situation, but the fact is, it wasn't a requirement by his company for him to have such a car. He was perfectly within his rights to choose a lower value car and, to be perfectly honest, he was just greedy! We could afford it at the time so it didn't seam to matter. We just fell into that 'bottomless pit of credit' trap, like so many others... oh how things have changed. We've certainly learned a valuable life lesson, but wish it wasn't so expensive!

Will definately try offering less than the settlement figure as you've suggested. Would you recommend calling them to discuss this or writing to them?

Many thanks again.

rensters

Just another thought, probably not a goer, but do you think we have any case against the finance company or the car dealer for not making clear that the agreement is unregulated? Although it does say in v small writing in the T&Cs 'the agreement is regulated where you are not a corporate body and the amount of credit is £25000 or less' - shouldn't the car finance company (who were obviously wooping with joy that two stupid people were about to sign this) have pointed out that this agreement wasn't covered by the consumer credit act?

I know the answer is no, but I can't help feeling like we've been stitched up!

standupguy

There would be no requirement to explain at point of sale that the agreement was unregulated.

Finance companies are happier lending on unregulated agreements as it means the car can not be handed back as a voluntary termination when half the HP price is paid - plus they make more money if the agreement is settled early.

To do a deal is best over the phone and speaking to someone who has a level of authority to negotiate in such cases.

Make sure that as the car allowance is a benefit in kind that your husband still receives the allowance for the notice period - even if he is not working notice.

Did you husband take any payment protection insurance on the deal - if so he could claim?

rensters

I'm afraid he didn't take any PPI - always thought they were a rip off - what do we know!

I will get my husband to speak to the finance company again this afternoon.

Many thanks for your advice :A