A car finance question

h1r3z

Hi everyone,

I apologise in advance if this is in the wrong place or whatever. I had a quick look around & found a few threads with a promising title, but not answering my question.

I have a car on finance and have paid more than half the total. I seem to have some idea in my head that I heard from someone's brother's friend's cousin that if you have paid more than half the finance company can't repossess the car (or whatever).

Quick story:

I recently became somewhat more financially unstable than I had previously been and fell behind with a payment or two on the finance. Not being the sort of person to ignore things and hope they go away and also being aware of the age-old 'talk to the company' thing, I rang them & explained my situation.
The chap I spoke to seemed quite understanding & helpful and agreed that I could pay half of the monthly amount for a few months while I tried to get myself sorted a bit, but did point out that I would have to make up the shortfall when I DID get sorted. Fair enough. I was told to make the payment before the 15th of October 2009.

I recently went away for a week and upon my return found the usual mountain of snailmail & the delightful surprise of finding that the company had started legal proceedings against me and suggested that I 'Voluntary hand over the car' rather than them (the company) taking it through court to get a court order 'making me hand over the car' and gaining for costs along the way.

I would like to know where I stand in this matter and have considered legal advice, though I don't know if I would get that free.

Is it possible that they could actually repossess the car even though I own more than half of it?

The main thing here is that I made an arrangement to pay them & they seem to have forgotten about that.
I intend to ring them tomorrow and see what they have to say, but I will find it hard to believe whatever it is.

Thanks in advance.

Rez

rainman31

Good idea to give them a ring tomorrow. You may find that he has put the details of your "difficulties" on your file and you have received an automatic computer generated letter. This has happened to me before but with credit card finance. They'll probably be able to sort it when you ring.

h1r3z

Thank you for the reply, rainman.

I rang them again this morning and I have to pay an amount today, but they are still asking 'when will you be getting a job again?' & such. What a ridiculous question.

Anyway, I am still unsure where I stand legally with the repossession of the car etc.
Any advice greatly appreciated.

CLAPTON

read this excellent summary about HP debts
and you can phone them and get free advice.

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

CHR15

I think the idea in your head is a little skewed.

You can pay Half the amount AND HAND THE CAR BACK owing nothing more, but if you think you can take a car on HP, only pay half the amount, then keep the car for yourself, I believe you are mistaken.

If it were true, we would all be driving £40,000 cars but paying £20,000 for them.

You should have asked for the reduced payment offer be sent to you in writing.
As it was only a phonecall, you may struggle if they deny any such offer.

standupguy

Firstly you need to be sure of the type of agreement as different rules apply

Is it HP or loan?

Assuming it is a hp agreement then they cannot take back the car without a court order once you have paid one third of the total hp price.

What they are trying to do is to persuade you to hand the car back voluntarily - if you do , they will sell it, bank the proceeds to your account and chase you then for any balance left owing.

If you do not, they are threatening to take the matter to court to get a court order - but they know that if you offer a reasonable amount from your income then all they will get is a suspended order pending you making the payments.

It is in their interests to get the car back voluntarily if they can as they will get money back in quickly and save further costs.

If the car has real value then they may well proceed to court but if there is not much value in the car then they may consider write off or sell the account to a debt collector - the threaten court letter being a last throw of the dice for them?

have they sent you a notice of default and if so what is the expiry date on the notice?

There may be an oppurtunity for you to offer the car back in full and final settlement of the account - if this is something you want to consider if you are in negative equity - you will need to get them to confirm in writing before you release the car

Otherwise if you want to keep the car and keep the account with the Finance company rather than a debt collector you need to offer an amount on arrangement that is acceptable to them and give them some comfort that you are able to pay regularly without being chased

h1r3z

CHR15 wrote: »

I think the idea in your head is a little skewed.

You can pay Half the amount AND HAND THE CAR BACK owing nothing more, but if you think you can take a car on HP, only pay half the amount, then keep the car for yourself, I believe you are mistaken.

If it were true, we would all be driving £40,000 cars but paying £20,000 for them.

You should have asked for the reduced payment offer be sent to you in writing.
As it was only a phonecall, you may struggle if they deny any such offer.

Funny. I like people with a sense of humour.

I'm not that green & neither am I some wet behind the ears teenager trying to pull a fast one.
I know very well that I can't pay half the amount & own the car. That isn't what I said. What I asked was if they had a legal right to repossess the car when I had paid more than half. I know that paying more than half doesn't make the car mine.
I realise I still have to pay the remaining balance and I am quite prepared to do so.

Thank you for your help.

h1r3z

Clapton - Thank you. A helpful link. Much obliged.

Standupguy - Many thanks for your reply. The car is not a high-value car, in fact it is very low-value in terms of real money. I suspected what you said about the 'last throw of the dice for them' & I have made as reasonable offer of payment as I can, but they don't seem happy with that. I made a payment today (half the original agreed amount) & am obviously not trying to avoid my debt to them.
I think I will have to see how this goes & play it a bit by ear.

I will let you know how it turns out (if anyone's interested).

Thank you again to those with helpful replies.

CHR15

In that case I apologise, I simply didn't understand the original post.

It seems ludicrous that they would repossess if you are still paying for it so I discounted that thought.

The alternative is that you stop paying the money and are of the understanding that they may not be legally able to repossess.

If they can't repossess after you stop paying, then the car must be yours to keep (because they cannot take it back from you)

If neither of you can possibly own it, because you accept that even paying more than half the car does not make the car yours,...... who's is it??

My own opinion, and it is just my opinion so please disregard it...
Is that you are behind on payments but feel that paying more than half should make the car legally yours to keep, or at least give you a stronger position to negotiate paying less... I don't know of any contract where this would apply.......sorry.

Good luck with catching up with repayments and completing your contract with them.

h1r3z

CHR15 - Thank you.

As to who owns the car... that is part of the problem. After reading from other sources (some supplied by members here) there is indeed some (though somewhat shade of grey) area of partial ownership depending upon the amount paid.
The car was bought from a local garage & the way it works (I assume) is that the finance company paid the garage for the car and I pay the finance company for the car, plus whatever extras they add for allowing me to do so.
According to that situation the car would at first belong to the finance company as they paid for it. I have now paid more than half the amount of the car and by my reckoning I am entitled to more of the car than they are. I agree that sounds odd, but the laws created for these type of situations must be based around something basic along the lines of share. I really don't know, that's why I asked here.

So if a company pays for something with the sole purpose of making money by selling it on to another party at a higher price for the priviledge of allowing you to pay by terms then surely there must come apoint where it belongs more to the other party than the original purchaser. If not then it seems bizarre that they own the car right up to the last penny.

I don't believe that my position of having paid more than half entitles me to any specific rights to pay less, but I do believe it should give me some protection from losing the car to repossession & leaving me £xxxx lighter & still without a car when I am still trying to pay for it despite the universal economic downturn & not just bury my head in the sand & hope it goes away, which seems quite common these days.

Anyway, no matter. Thank you again for your reply. I will resolve this one way or another & hopefully sooner rather than later get back up to date.

CLAPTON

the car is owned by the HP company until the last payment is made
you are only hiring the car with the right to buy at the end.

you have some rights as you have paid more than 1/3rd ... basically they can only repossess the car with a court order.