1/2 rule and car finance

ant1233

Dear All,

Im a bit confused. Can i hand my car back at the halfway point and owe nothing ?? I have a HP agreement with Santander formerly GE and the place i bought it from has gone bust i think.

Only problem is ive fallen behind with the payments and they are saying because ive broken the agreement i cant now enforce the 1/2 rule.

Please advise ?

Ant

~Brock~

You can hand the car back at any time, however the termination rules contained under s100 of the Consumer Credit Act determine what you will still owe at the point of handing back the car.

This will include the amount needed to pay up to half of the total amount payable (including original deposit if applicable) together with any outstanding arrears at the point of termination.

It is best to pay these sums at the point of handing back the car, but the lender cannot refuse termination on the grounds that they have not been paid although they will be entitled to pursue the borrower for any outstanding amounts - through court if necessary.

ant1233

So i owe roughly £18k still. The car is worth roughly £13k i think. Im guessing if they auction it off it will go even cheaper.

Im £1500 behind at mo, 1/2 point is in september. I can catch the £1500 up and pay up til september.

What i dont want to do is hand it back in september and then be told its going to auction and still owe thousands.

please clarify.

standupguy

ant1233 wrote: »

So i owe roughly £18k still. The car is worth roughly £13k i think. Im guessing if they auction it off it will go even cheaper.

Im £1500 behind at mo, 1/2 point is in september. I can catch the £1500 up and pay up til september.

What i dont want to do is hand it back in september and then be told its going to auction and still owe thousands.

please clarify.

If you terminate under the half rule and return the car then your liability ends there BUT the account should be up to date at the time of vt and be in a reasonable condition.

If you are in arrears at the time of vt then you canstill vt but you will have a remaining liablity equal to the amount of arrears at termination and they will chase you for this.

The sale price at auction has no bearing on your liability under the half rule