Voluntary Termination of HP

Janicemg

I have a 2 year old car which is not worth the money I owe by a long way. I have been trying to sell it for 3 months with no luck. I have reached the point on the agreement where I can Voluntary Terminate the HP agreement and hand back the car to the Finance Company. I am being told so many different things regarding my credit status after doing this I am now really confused. The HP company say they will mark my credit file as having VT'd a car. The garage I bought it from from have threatened me that if I do this I will never ever get another loan / mortgage again. has anyone any idea of the truth of this matter. Thanks in advance

Cumbrian_Male

I assume that VTing your file would mean stating that the HP agreement was voluntarily terminated. I would think this perfectly reasonable. If the car was just wildly overpriced when you bought it or you simply can't afford it any longer then why not just add a notice of correction to your file to state this. IE car purchased at excessive interest rate contract terminated or due to change of circumstances unable to maintain repayments so voluntarily surrendered.

I would have though a future lender would look at this more favourably than you getting it repossessed for instance. (Not saying this is the case)

I would think you may not get automatically passed for future lending as it probably wouldn't fit the scorecards, and some will reject automatically, but you can appeal and are entitled to have your application manually processed.

Whether it will prevent you getting further credit will depend solely on that lenders acceptable customer profile.

scottiejambo

remember that you are doing nothing wrong in handing your car back. It is your legal right to do so.

Ruth_&_Ian67

This is how it happens

Please read your T&C'S first

You have to make sure that the vehicle is still in a good condition and have a current MOT and I think taxed as well, you then phone the finance company and tell them you wish to terminate the agreement under the halves and thirds rule ( you have paid more than half) in the T&C'S, (you may have to write to them as well) Explain to them where to pick the car up from.

Dont listen to the garage 'cos its your rights as a consumer to terminate the agreement as stated in THEIR T&C's.

The reason they dont want you to cancel is they will lose vast amounts of interest,

As for other finance companies, they cannot refuse you credit purely on the basis you VT'd (I think its against the law) but they might look at your history to see why it happened as they wouldn't want you as a customer if you get to that stage again then VT'd with them.

Just make sure its what you want to do

Hope this helps

trainee_expert

I did a VT on a car 6 years ago - only now has it dropped off my credit file. It will cause you some bother getting credit in the short to medium term I can say that for sure. If you do go down this route, make sure you check your credit report to see what they enter about you. My report said 'Settled' since 2000, but when I checked the other month to see that it had actually gone it had changed to a £28 default! Fortunately after a bit of chasing of the finance company they have updated my file properly now and it says 'Settled' with no mention of the VT.

bobbones

Ther is no proble with VT, it is in there terms on your finance contract, you can do it without any credit rating problems, they try to scare you off as they will loose money, it is common place to do this, I did it 2 years ago on a car and have had no problems getting credit for anything, even a new £28K car, your agreement says you pay them every month X amount which you do and if you pay a total of X amount you can had it back which you can do, its part of the agreement and you will have not broken the terms of agreement.

uncleiven

I am coming upto the half way mark of my HP agreement. I was just wondering once the halfway mark (2.5 Year) has past can you arrange VT at anytime after that.

Thanks

bunnygirl007

Just in case it did harm your credit and you were wanting to take out a loan for a newer car could you possibly get the new car before you hand back the old one? That way if they do mark your file negatively at least you've already got the loan for your new car. Just a thought.

apf666

hi

you can self terminate a hp agreement at any time and limit liability to 50% of the agreement so long as a default notice has not been issued and expired

if over 50% of agreement already paid then no further liability unless excessive wear/tear or damage, no impact on credit rating

if under then remainder of 50% can either be paid by termination date (no impact on rating) or treated as non priority debt and payments offered on affordability, this will impact credit rating

ppi loans associated remain in place, normally second cca loan agreement on hp agreement documentation, ppi should be optional, always worth looking for grounds for complaint as largely mis-sold

send any self termination by recorded delivery and keep copy,

people are not advised of their rights for obvious reasons PROFIT!!!!!! creditors sometimes push voluntary termination when customers in difficulty and this, if done will leave 100% liability in place

regards

af

Jo_2k

Hi, just wondered if anyone knows if the half rule is half of the cost of the car or half of the amount due including interest?

Many Thanks in Advance.

taff007

Jo_2k wrote: »

Hi, just wondered if anyone knows if the half rule is half of the cost of the car or half of the amount due including interest?

Many Thanks in Advance.

I believe it's 50% of the total payments due, so it would include interest.