Conditional Sales Agreement

mitcho_uk

Hi all,

I have a Peugeot 206 that is now 4 years old. I have been told that as I have paid over half of the finance (£4000 remaining) I can hand the car back and owe nothing as it was bought under a conditional sale agreement which is regulated by the Consumer Credit Act 1974.

The terms in the contract state

"You have the right to cancel this agreement. If you wish to do so, you should write to the person authorised to recieve your payments. We will then be entitled to the return of the goods and half of the total amount payable under the agreement, that is £xxxx. If you have already paid atleast this amount plus any overdue instalments, you will not have to pay anymore, provided you have taken reasonable care of the goods".

This to me sounds like I just have to write to them and say that I no longer want the car, they will then collect it and I will owe nothing. Is this the correct interpretation of this ruling.

Also does it come with any negative impacts such as affecting my ability to gain credit or car finance in the future? Any help would be appreciated.

inmypocketnottheirs

Whilst I am not in a position to answer your query it may help others if you can inform us as to which finance company is involved here. I think you may find that the likely action will depend on which company you are with.

Also take a look here for more information http://forums.moneysavingexpert.com/showthread.html?t=254056

mitcho_uk

The loans company is Peugeot Finance and we are upto date with everything. I am only querying this as it seems to easy, but having read around it seems that I can just give it back.

ArchieB_2

Any means of settling the finance and selling the car privately? (CC with a decent limit?)

This way you may be able to pay off the finance, sell the car and still have a few quid left over. Have you done the maths (ie o/s finance vs market value of car??).

rchddap1

My BIL is in the car industry and told of this little known part of Ts&Cs a while back. He told us that if you have car finance you can return the car if you have paid more than half of it. Then he said that he didn't think there were any negatives, but that car finance companies are obviously reluctant to publicise this info.

mitcho_uk

ArchieB wrote:

Any means of settling the finance and selling the car privately? (CC with a decent limit?)

This way you may be able to pay off the finance, sell the car and still have a few quid left over. Have you done the maths (ie o/s finance vs market value of car??).

According to the valuations from What Car and Parkers we would not get enough to cover the outstanding payment, however I had considered doing that.

I have spoken to the Leicester Consumer Advice centre and they state

"Yes you are correct however if you have
arrears or if there are insurances that you have also purchased this may
make a difference to the amount you will need to pay as they may not be
included in the half figure. Having arrears should not prevent you from
returning the goods but you will still owe the arrears If you have taken
out payment protection type insurance these may not be calculated in the
in the termination figure but it should be clear on the agreement if
this is the case. As it is your legal right to terminate and return the
goods it should not affect your credit rating as you are not defaulting
but simply exercising your legal right to end the agreement early.
however i have come across cases where this has been misunderstood by
finance companies so it would be in your interest to check your credit
reference file to make sure there is nothing adverse entered agaisnt
you".

That has cleared it up in my mind that I can hand it back and owe nothing as I am not in arrears and I have paid over half of the agreement. I hope this helps someone.