car finance

spearsy29

Hi Guys,

I would really appreciate any good advice....my girlfriend got a car in November 2008 on a three year lease type deal. In June 2010 she began to default on the repayments and the finance company would not accept her offer to repay the outstanding amount. They said she had to clear the outstanding amount in full or hand back the car. In December 2010 she handed over the car and we thought that would be the end of it. We even recieved a statement stating: late payment fee £0.00, reposession costs £0.00, Auction costs £0.00, solicitors costs £0.00 fines £0.00 Damages £0.00! However, we have today received a letter stating their is an outstanding balance of £2,187.97. We were never made aware that we would still owe any money, but reading the small print of the original finance agreement it would seem she agreed to it.
We simply cant afford to repay this debt or even afford to make an offer as all our cash is accounted for repaying other creditors! Is this debt still enforceable? thanks in advance for any help.

lvm

What was the monthly payment?

Are you saying she kept the car from June to December and didn't pay anything, not when she handed the car back?

Of course she would need to pay whatever the payments were for this period. If you took out a hire car from Hertz and kept it for an extra few months without telling them, you wouldn't expect to just give it back and them to say "that's ok, we have our car back so it's fine".

What you said about the statement you received and everything saying £0, that looks fine to me as it doesn't mention anything about arrears or lease payments. Those statements are given to everyone when a car is handed back and is more about damages than what the contractual payments were for.

I'm sure someone will come along and tell you to ask for a copy of CCA and it seems like you're looking for a get out clause but in all honesty it appears that your girlfriend owes the money and should be aiming to set up a repayment plan.

Sorry.

mdr86

How much was the cost per month?

spearsy29

Her monthly repayments were £151.19
she did not pay these from June until Dec. Thankyou

lvm

So what does the small print say? Half of that outstanding balance would be for the missed payments. Did she do a lot of mileage? If she told them she'd only do something like 3000 miles a year but actually did 15k a year and they charge something like 9p per excess mile, this could add a lot extra on.

I'd write to them asking for breakdown of costs but she'll almost certainly have to pay it.

holidayaholic

I think it may depend on the type of finance the car was done under - ie PCP or HP.

On hire purchase (HP) you don't own the car until you have finished paying for it. If you have paid more than 1/2 the total (this should be shown on the contract) you can hand the car back & walk away. But you are still liable for any missed payments up to this point.

PCP deals are more complicated & the above right to return does not apply. Normally, you are liable for the outstanding finance at the point of early termination & would have to sell the car & hope to recoup enough to settle the finance from the proceeds.

On the basis you handed the car back before receiving a bill (assuming you didn't ask them to sell the car for you & the bill you've received is for the shortfall), it sounds like you had a CH finance.

Therefore, I would have thought you would only be liable for any missed payments up until December 2010. (subject to having paid 1/2 the total as per above)