Voluntary termination car finance

scooby75

I'm so glad I've come across this site!

I'm just over half way through a finance agreement on my 9 year old car with Santander. The outstanding amount due is nearly twice as much as the car's worth. There's no point in my flogging it as I can't sell it for the amount due, nor can I make the difference up to settle.

My reason is that the interest is awful - nearly 25% and it's a very expensive agreement. So I want to end it and get a new deal for a newer car. I've done research and got quotes that will save me £70 a month for a newer car so it makes sense. I'm not at risk of suddenly being unable to afford repayments - I just want to save money.

I've not missed any payments or fell behind at all with payments, and my credit isn't too bad (it would be near perfect where it not for a dispute on an overdraft - The FOS are looking into my appeal against their initial decision, but that's another story).

So what should I do or be wary of? I'm going to get the scrapes, dents and scratches sorted myself, clean the car inside and out, and I've got all documentation. The car has recently been serviced and had new parts (tyres, brakepads etc) so it's in good nick.

There are however some problems that existed since I bought the car - for example the rubber seal on the FPS window is damaged, there are some welding flaws on the interior and the fan belt has always been loose.

So I know I need to send my letter recorded and make it clear it's a VT (not surrender), ask for a delivery location or pickup point and to take photos of the car. But how do I stop them screwing me over? Have I missed anything?

System

Firstly what type of finance do you have ? if its a hp agreement you can vt but im not sure you can if its a finance [bank loan] type arrangment.

finally_solvent_2

My son is going through the vt process himself at the moment. What he has discovered to his cost is that you are obligated to have the car professionally serviced at all the correct service intervals , if you miss any or are late the finance company will charge you £200 each for these.
Secondly, the inspector who comes round to inspect your car will write down every single tiny fault he can find. You will be asked to sign his report . This confirms you agree the condition of the car at that moment. I understand these inspectors are from an independent inspection company.
As far as scratches are concerned, my son contacted a smart repair bloke who lives on our street. This bloke advised my son to save his money as he had done repairs for people in the past and the finance company had not accepted these repairs. In my sons case we did have the scratches seen to but my son is still been asked to cough up £113 per scratch. (It is impossible to do an entirely invisible repair on some pearlescent finishes)
The finance company will expect all repairs and maintenance including welding and mechanical repairs to have been done to main dealer standards. My son was sent a bill for £1100 seven days after they collected the car payable within 10 days. My son argued that the car was 7 years old and that some minor paint imperfections were to be expected and the company have now reduced their demand to £550.

KingElvis

Yep, they will attempt to cover their costs (of you terminating early) by finding every little tiny fault with the car and charging you through the nose for it.

secureone

voluntary termination

secureone

i have recently applied for VT on my vehicle through Suzuki finance a figure has been agreed when payment has been made and vehicle returned is that it??

scooby75

I can Vt- it says so on the contact - does anyone have any advice on this? What kind of damage / wear is acceptable? I was also late on the MOT and a service - is that likely to affect it?

standupguy

scooby75 wrote: »

I can Vt- it says so on the contact - does anyone have any advice on this? What kind of damage / wear is acceptable? I was also late on the MOT and a service - is that likely to affect it?

You will be returning a 9 year old car, not a new car and its condition should be commensurate with its age and mileage - so you should not unduly worry about minor issues of wear and tear.

If the Finance company try it on, and many will to try and mitigate their losses you should make it clear to them that
"any request for unreasonable charges will be met with an immediate complaint to them for you being treated unfairly and if that complaint cannot be resolved by them you will take the matter to the Financial Ombudsman service"

That will then tell them you will not be hoodwinked and it will cost them if you take the matter to FOS.

rustington_b

Here is my experience of voluntary termination, that happened earlier on this year with Santander Consumer Finance:

I had reached the payments half way point, rang Santander Consumer Finance who told me I was eligible for VT. I sent them a letter via recorded delivery using the template you can find on various consumer debt websites and waited for a reply.

Within a week I had a letter back, confirming that my VT had been accepted and that a local collection agent would be in touch to arrange collection and inspection of the car, at a cost of £50 to me.

Then within 2 days I had a call from the agent who was really friendly and easy to deal with, and we arranged for him to come round. I was expecting him to pick up on a few things however he barely looked at the car, said that it looked fine to him, gave me the paperwork to sign saying that we together agreed to the damage report (i.e. no damage) sorted the V5, loaded the car onto a truck and told me to cancel my direct debit and that was the end of it!! As far as I am concerned now I have a signed document saying that the condition is fine - they cant come back to me with anything so I am totally free of it.

Maybe I am one of the lucky ones, but Santander seemed fine and didnt cause any issues.

As far as I can see it, as long as the car is reasonable and in line with its age, then as long as payments are up to date, its mot'd and you have the v5 then theres nothing to worry about. Sounds like some finance companies really try it on and make people's life difficult, but for anyone with Santander then it seems a really fair process.

System

Hi rustington_b

I did a VT around two years ago and it went without a hitch. Luckily for me the bloke who came to inspect the car clearly didn't give a monkeys! That said, the car was in reasonable condition for its age (some minor scratches and paintwork flaws) and I had all the paperwork in order (i.e. servicing, MOT, tax).

The only minor problem I had was the finance company ringing me over a year on saying I still owed £130, I easily refuted this as I had insisted they send me written confirmation that the VT was complete at the time, once I told them I had this proof they said 'Oh, well we'll get that written off then'. So I would say make absolutely sure they send you written confirmation the agreement is officially terminated.

Check out this link for an excellent factsheet and template letter:

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=16_hire_purchase_debt

Best of luck, let us know how you get on.

UNDERGROUND

rustington_b

Hi Underground

Thanks for the tip. I have a letter from the finance company saying:

"thanks for executing your legal right to voluntary terminate under the consumer credit act.....etc. We can confirm that your agreement is now terminated and the balance remaining is £0.00... You must return the goods at once and a collection agent will be in touch to arrange this" - the collection / inspection happened a few days after this letter and the damage report was nil.

I think I will keep the letter and damage report, make a load of copies, and also frame them!
Power to the people :beer: