Car Termination Right on HP Agreement Advice Please.

Banana_Hammock

Hi to all , 1st time virgin poster here ,

Basically I am seeking advice on the Car Finance I have with Black Horse probably a case of confirming what I already think is correct but any advice would be muchly appreciated , I am self employed and currently have a Vauxhall Astra which I need to change to get a Commercial Vehicle (like a Nissan Navara) so I can put the payments through my books and claim VAT and TAX back on the payments as I cannot do this with my Astra , the question I would like answering is about the Termination Rights in the smallprint which say I am entitled to return my car to Black Horse providing I have met "x" amount of payments , well in Jan 2011 I will reach payment 30/60 which is halfway through the term of my agreement yet it I will need to wait until payment 34/60 to have reached the figure stated on my agreement before I can return the car. I would normally take the car and p/ex it for the Nissan Navara for example and no doubt incur slight negative equity to be added to my new finance deal but my "brainstorm" makes me think surely its easier to return the car in perfect condition on payment 34/60 and go as a free man to get the Nissan Navara , its seems to easy so if possible could these next few points be answered by the many good guys out there as I have heard many scare stories and do not want to do something until i know the pure facts.

1: If I return the car as the agreement states I can on payment 34/60 will this 100% release me from my agreement ties and not have my credit report affected , or is it a sign of admitting defeat to a finance company and even though you have done what they permit its deemed as a bad payer and will effect future credit ?

2: Various older posts and responses have stories that Credit reports can be tagged for 6 years as a Voluntary Termination which new creditors do not like , is this true in my case ?

3: I cannot afford to pay the car off then go trade it in as my own vehicle , which move would be best to do simply p/ex it and take the hit on negative equity or terminate it as I previously mentioned and accept that for nearly 3 years I have paid £240 p/month just to hire the car with nothing to show for it ?

Any good advice will be greatly appreciated I am not the most clued up on legal stuff and when I think that "Oh the print here says you can do this" then I presume its true without thinking of repercussions that could arise......

many thanks guys

Common_Sense_2

Banana_Hammock wrote: »

Hi to all , 1st time virgin poster here ,


1: If I return the car as the agreement states I can on payment 34/60 will this 100% release me from my agreement ties and not have my credit report affected , or is it a sign of admitting defeat to a finance company and even though you have done what they permit its deemed as a bad payer and will effect future credit ?

it will 'release' you from your agreement as you are terminating it. however they may ask you to cover any damage to the car etc if you haven't kept it in reasonable condition (some companies have a different understanding of reasonable - best to check with them)

2: Various older posts and responses have stories that Credit reports can be tagged for 6 years as a Voluntary Termination which new creditors do not like , is this true in my case ?

Yes it does show on your credit file as a VT - this is purely because lenders have to ensure that your credit file is a true reflection of the history of the account. Some creditors do not like it, some don't mind. Some lenders will only offer you a loan if you pay a larger deposit or borrow over a shorter period to reduce the chances of you VTing to them (after all if you do then it costs them!)

3: I cannot afford to pay the car off then go trade it in as my own vehicle , which move would be best to do simply p/ex it and take the hit on negative equity or terminate it as I previously mentioned and accept that for nearly 3 years I have paid £240 p/month just to hire the car with nothing to show for it ?

Yep - that's what happens when you buy a depreciating asset on finance! Have you actually been given a possible trade in value of your car?

See my answers above.

jonjamie1970

You can VT halfway through the financial amount borrowed in total including interest. so £3000 if you borrowed £6000.

I have VT'd many times and it has never shown on any credit report or affected my borrowing / credit rating.

Banana_Hammock

Thanks for the replies so far but I am confused , 1 post says a VT will go on my Credit File and 1 Post says many times VT'd yet no Credit marking , its a dark area to delve into because until I am sure nothing will go on my credit report I wont VT even though its the cheaper option , my car is worth probably £7200 now and p/ex a garage would likely try offer about £6000 knowing what they are like which would still leave around £2000 left on finance which would get added to my next vehicle , people mention that 1/2 way thru a HP agreement you can give the car back yet my figures if I add all my payments up to get to the figure that Black Horse say I can give it back on would take me partway between payments 33 n 34/60 when should it not be 30/60 ?

The car is in very good condition with way below average miles done in it in the past 2 years (5k p/year) it is no different cosmetically since I first bought it although a service I had done was a few months late thru lack of checking , I am most worried of VT'ing my car then once dropping it off going to get something else for work and not being able to get finance because I gave a car back although its thru personal choice and not one payment missed and Black Horse would still be better off than I would I would hate to think they can leave a sulky sting in the tail.

jonjamie1970

Ring the finance company or ask the CAB not a forum if you want a definitive answer.

I posted what was true in my situation.