Early termination of car loan

burbri1581

Good Morning, I have a car loan taken out in March 2007 for a 4 year period. It was taken out in the name of a partnership business I own. I want to terminate early and hand the car back as it's now worth a lot less than whats still due to be paid although I have paid back more than 50% of the balance. The finance company say I can't do this as the loan was taken out with the consumer credit act. can anyone advise me for sure?

redpete

It's not unusual that the interest paid on a car loan and the depreciating value of the car mean that you owe more than it is worth (probably true as soon as you sign the paper). This in itself is not a reason to terminate the agreement.

The Volutary Termination after paying 50% rule applies to HP agreements - the original documentation will make it clear if you have an HP agreement. The original documentation you have will also confirm if the lender is right when they say it is a staight loan.

It sounds like you are stuck with it.

Common_Sense_2

if you took it out in your business name then the CCA does not cover you (its called the consumer credit act) therefore you don't have the right to voluntarily terminate the agreement

standupguy

Common_Sense_2 wrote: »

if you took it out in your business name then the CCA does not cover you (its called the consumer credit act) therefore you don't have the right to voluntarily terminate the agreement

Not quite correct.

When this loan was taken out 2 years ago the cca covered partnerships providing the balance financed was not more than £25000. It did not cover limited companies which are outside the scope of the Consumer Credit Act.

In this case, it seems, as red pete says, that the agreement is a loan rather than a hp agreement and therefore there is no termination clause here.

ilovebanksMCMLXXXI

If you've paid back MORE than 50% look up the 'halves and thirds' rule.

It won't do your credit rating much good but that depends on how desperate you are to throw the car back.

standupguy is 100% correct in what has been posted - Not all business are Limited so there is and can be CCA cover.

Best of luck

toffe

sole trader businesses including partnerships can still be covered by the consumer credit act.

finance companies do not like VT it is only in the agreement because it's a legal requirement for regulated agreements so it's not out of the question that the finance company has lied to you.

to find out where you stand send a cca with £1 to cover the fee and when you get the full agreement back it was say whether it is a hp agreement or a fixed sum loan agreement and it will also tell you if the agreement is regulated by the consumer credit act.

basically, for you to be able to return the vehicle the agreement has to be a hp agreement and it has to be regulated by the consumer credit act 1974.

duggie1982

Would this affect the credit file if handed back? Always wondered if it did.