Voluntary Termination of HP

rikmj1965

I have a car that is financed by the Funding Corporation and next month i am halfway through my agreement, can i VT my car i have looked through the t&c's and cannot find anywhere that it states i can, my wife rang the Funding corp and they said that we cannot VT the car is this true.

Thanks

goingonholiday_2

I'm not sure I can answer everything and I'm no expert but hopefully the following is useful.

If you are up to date with your payments your credit reference record for the HP agreement will show as up to date. If you then arrange with the finance company to hand the car back as a voluntary termination (having paid more than 50% of the total amount payable under the HP agreement, Total Amount Payable should be quoted on the agreement) they will send information to the credit reference agencies to settle the record and apply a voluntary termination flag to that record. There are various flags e.g. deceased, insurance claim, temporary arrangement etc.

When a finance company undertakes a credit search they can use the information to determine if they are going to grant you credit - they do not have to grant credit even if you have a perfect credit history. Most large lenders will refer applications where there is a flag. Some lenders may not want to accept business from someone who has VT'd e.g. if you are applying for another HP agreement. High street banks probably won't consider the VT flag detremental if everything else is in order. The flag does mean your applications will likely be referred for manual underwriting. Flags stay on your file for 6 years.

Your HP agreement should state what the 50% amount is and therefore you need to check that you've paid at least that amount. If there are any terms & conditions they should be on the agreement, valid MOT is standard.

As someone has already said, check your agreements for PPI and GAP insurance, these can be separate to the HP agreement and wouldn't be cancelled by the VT.

Regarding the Funding Corporation, they supply HP, PCP and personal loans, you would need to check that your agreement is a Hire Purchase agreement or a Conditional Sale agreement (don't tend to get those any more). If they've said you can't do VT you may have a loan or may not have completed the 50%.

Hope that helps but do check your T&C's.

rikmj1965

Thank you for that response i understand most of it,what i am not clear about is whether its a hp agreement or a loan, it says on the front of the customer copy that its a credit agreement does this mean its a loan or a hp agreement.

Thanks

goingonholiday_2

If it's an HP agreement it will say 'Hire Purchase' on it and it will give details of the car, if it just says credit agreement and there is no mention of the car then it's a loan.

System

we handed a car back a few years ago and it did not affect our ability to buy again at a later date.

rikmj1965

It doesnt mention higher purchase but it does list the car details under Key Financial Information such as registration number make model and vin number, can i legally send this car back after 50% of the payment which is next month, they say i cant how do i stand on this matter.

And thanks for all the information and time taken.

System

my agreement stated that once just over half the amount was paid we could surrender the car ,if yours doesnt state this maybe itd a credit not hire purchase agreement . if this is the case then i dont think you can send it back .why not ring the finance company to clarify your t&c.

uncleiven

I will be arranging for the VT of my current HP agreement next week. I believe the general process to follow is to call the company who your agreement is with and advise them that you want to arrange for a VT then you send a official written request to them (via recorded delivery).

Is there a guide or can some advise as to what has to put in the letter. Maybe even a rough draft of one would be great.

Thanks

Adam.

fatbelly

Hi

Here's a factsheet.

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=16_how_to_deal_with_hire_purchase_debt

The letter you want is Appendix 3. No need to phone - just send the letter

uncleiven

Thanks alot