Please Help I Cannot Afford My HPI

beckhamfan659

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Hi

We bought a VW Passat in Jan 06. Its a 52 plate with high mileage. However, considering its service history and that it is a diesel it should not have any problems. We bought the car from Car Giant and paid for a years warranty.

Since having the car it has gone wrong in many ways i.e Air Con Broken, coolant loss, car boot hinge broke, horn has stopped working, possibly exhaust? and smaller problems.

Anyway recently I had to go part-time due to family commitments and the drop in salary means I can not afford the repayments as easy as I once could.

I found on citazens advice bureau, if I gave the car back to the finance company. I would be liable for all repairs, arrears and half the finance. I am unable to afford this.

Can anyone point me in the right direction on how to end my HPI without incurring such huge costs?

System

Hi

Read this taken from this link http://uk.cars.yahoo.com/buy-cars/car-finance.html

Hire purchase
Hire purchase, commonly known as HP, is a tried and trusted way to buy a car on credit - especially if the value of the car is higher than most personal loan limits (typically £20,000).

HP is also a good alternative if you can't easily get the finance you need, perhaps because of a poor credit history.

Interest rates on HP agreements are usually higher than personal loans. And, most importantly, with an HP agreement, you don't own the car until you have paid back all the money owed. If you miss payments, the HP company can claim back the car. But if you've repaid one third or more of the value of the car, the company will have to take you to court to recover it.

You can cancel an HP agreement at any time but you will have to return the car and you must have paid enough to cover half the price of the car before you can cancel.

Hope it helps

Lenny

oscar52

I would consider also trading standards. A car only three years old (from your purchase date) should not have that kind of problems - this could easily be argued even given a high milage. You could also possibly add, that in hindsight, this is why you were told about the warranty, to cover their own backs so to speak (you dont actually say if the warranty was pushed or hard sold) Myself, i would possible even argue about the road worthiness of the car - if its had this amount of problems, there are likely to be others that wuill surface sooner or later.

Edit** I know this doesnt really answer the OP, but highlighting these facts could get them to lower or even forfiet any cancellation clause in the agreement **

kev84

I voluntary terminated my car in march 2006. Despite it having a long scratch down the side the finance company did not pursue me for the repair costs - but not all finance companies are like this. Have you checked actually how much is the settlement figure ? If you have paid over 50% you can hand it back as you said.

The finance company i was with said that an option would be to sell it and get the best price for it and pay off the finance - if it covers it, great, but if not your left with no car and the whatever is left of the finance to pay off (usually within 24 hours).

Is there a family friend you could sell it to and get a decent price for ? And then you could settle the remaining amount on a low interest or interest free credit card?

Kevin

beckhamfan659

Hi

Thanks for your help. The warranty was pushed and a hard sale of every single insurance you can think of, including if we crashed our car we would get full value of what we paid instead of parkers guide. Also the repairs are not covered by the warranty. So we can not even afford to get the car fixed. Apparently the condensor fan has gone and its not covered. The garages they recommend can not find a leak in the coolant system. Unless we want to pay £95.00 plus VAT to VW to find out why the car is losing coolant we will not know why. We again can not afford this on top of the car payments. We have not paid last month so we can get some other smaller repairs done, but just simply can not afford to get others done.

We cant afford the car and by looks of it if we give it back we will still be paying the car. I am getting so tired of the car and panicing each month about the finance. I am so surprised there is not much more a consumer can do. I will look into trading standards. Try to go that way round. Do you think if it went to court to get the money back we could argue it due to the faults of the car?

beckhamfan659

kev84 wrote:

I voluntary terminated my car in march 2006. Despite it having a long scratch down the side the finance company did not pursue me for the repair costs - but not all finance companies are like this. Have you checked actually how much is the settlement figure ? If you have paid over 50% you can hand it back as you said.

The finance company i was with said that an option would be to sell it and get the best price for it and pay off the finance - if it covers it, great, but if not your left with no car and the whatever is left of the finance to pay off (usually within 24 hours).

Is there a family friend you could sell it to and get a decent price for ? And then you could settle the remaining amount on a low interest or interest free credit card?

Kevin

To be honest I would not sell the car to anyone I know. Its unreliable and absolute dog of a car. I am so annoyed with the car and whats gone wrong with it. Paying for it is too hard and repair jobs to ensure its road worthy is way to much to give to a friend. I would also feel guilty selling it to someone else. I think they should have the car back considering its faults.

I have not even paid half. I have a ridiculous interest rate and we have only been paying for a year on a 4 year term. I think the car is worth £4,000 now and we bought it for £5,500. I could speak to them and ask about selling it. Thats if 1 we can get a decent price on it 2) sell the car in time as I am just paying small amounts to the car to show that I am trying.

Thanks.

kev84

I don't know whether this is the best recommendation but maybe you could consolidate the debt onto another affordable monthly bank loan? I dont know what your credit is like right now but it can't be getting any better missing payments. Maybe you can speak to your bank and plead to the underwriters (don't just accept the first answer of no!) so that you can keep the car. Then you can sell it and pay it off the loan and have whats left of that loan to pay off which will most likely not be as much as the ridiculous apr on your car finance.

Maybe you could just go straight to the finance company and renegotiate the payments i.e. lower the apr so that you can afford it? If they are decent enough they would rather you pay up than default on the agreement.

You should be able to cancel all Payment protection insurance etc.. just ring your finance company.

I think im out of ideas now !!! Good luck in getting rid of it !

Kev

oscar52

I think you would stand a good chance of winning within the courts. The small claims court only allows for claims under £5000. Now the car may well be worth more, and cost more, but that (i think) is irrelavent as your claim would be for the costs so far. I would log all problems with the car, its obviously had a few and I assume you will have dated reciepts for any work done.

What you say about crashing confuses me - they said they would pay the full value of what you paid rather than the parkers guide? Insurance companies gereally only pay for the value of the car and a few little extras (maybe) depending on the policy. They would use a guide such as parkers or glass' guide to obtain a value - this is what you would get (sounds like this polict was missold) Also if the warranty did not cover repairs, what was the point in it.

ON losing coolant - have you looked at your oil (look uner the filler cap on engine top is best) - if its whiteish coloured, this is your problem

And lastly, it would seem that the car has had other problems than those you list, I would also question the validity of the MOT - i would have thought some of these problems would be apparent then. (just out of curiosity was it a written MOT, or one of the new computer printed ones?)

moozie_2

Sorry to hear about your difficulties. HP are well known for being difficult to get out of This may help http://www.oft.gov.uk/Consumer/Hire+purchase/default.htm

Ending your contract early

If your HP agreement is for under £25,000, you have two ways of ending your contract early:

You can terminate an HP agreement and return the goods at any time by writing to the lender, as long as you bring your total payments up to half the price of the goods (the exact amount will be stated in a box on the front of your contract). But you will also have to pay off any credit you took out to pay for insurance. If you have already paid half, you only have to pay for any missed payments or damage to the goods. But if you have already paid more than this amount, you will not get a refund of the difference. You should not be charged to return the goods. If under the terms of your contract you must take the goods back, this should only be to premises within a reasonable distance of your home.

You can also pay off your loan early (including any credit for insurance) and keep the goods. Contact your lender and find out how much this will cost. You will be entitled to a rebate on future charges. There are rules on how this is calculated. Credit agreements should include examples of how much it will cost to pay early at different times.
If you are in doubt about which method is best for you, ask for help.

If you can't afford the repayments

Contact your lender as soon as possible, as it may be possible to renegotiate the deal. There are free, independent advisers you can talk to - see Further help for details.

Your lender has the right to take back the goods if you don't keep up your repayments. You'll be sent a notice first, giving you the chance to put things right. But you will have to act quickly - within seven days.

If you haven't got the money to put things right, explain this to the lender. If they won't agree to less than full payment, they may take you to court. You can ask the court to give you extra time to pay if you really want to carry on with the deal. Seek advice on this - see Further help for details.

If you've paid more than a third of the total cost of the HP or CS (not including any insurance), your lender will need a court order to take the goods back. If you've paid less than this, the lender still can't enter your property to take the goods without a court order, unless you give them your permission to.

If you are having problems keeping up with repayments it may be cheaper in the long run to hand the goods back (see Ending your contract early).

Bossyboots

oscar52 wrote:

What you say about crashing confuses me - they said they would pay the full value of what you paid rather than the parkers guide? Insurance companies gereally only pay for the value of the car and a few little extras (maybe) depending on the policy. They would use a guide such as parkers or glass' guide to obtain a value - this is what you would get (sounds like this polict was missold) Also if the warranty did not cover repairs, what was the point in it.

I believe the poster would be referring to GAP insurance which pays the difference between the value of the car at the time of write off (recoverable through your own insurance) and the price you paid. This is being hard sold in dealerships these days.