Car Loan - Not HP question

richj

Hi,

we have just been to look at new cars. Whilst looking we got onto the subject of outstanding finance on our current car. We were under the impression that it was bought on HP, however from looking at the paperwork it seems it was done as a personal loan. Is there any action / recourse we can take? There is approx £3500 left to pay on the car and this obviously gives us negative equity on the new one???

thanks in advance
Rich

tom188

Im afraid not if you signed the agreement and hadnt read the terms properly.

Do you have the original agreement and is your name on the bottom?

thesaint

What is the recourse you are asking to correct.
Have you lost out?

richj

Tom - we have the original agreement and it is .

saint - we were hoping to hand the car back as we had paid more than 50% and start a new agreement.

rich

plane_boy2000

A handback will be on your credit file and will likely make other finance houses nervous about you buying a car on HP. The point of HP is not that you can buy something and just hand it back when you get fed up with it!

tom188

Looks like this is going to have to be a lesson in not reading what you agreeing to then.

directdebit_3

I think richj is confused with a PCP where you can hand the car back after a set number of years at a pre-agreed value?

DavidHM

A handback wouldn't hurt your credit record because you are using an implied term in the loan - implied by the CCA 1974 - to settle it. As a settlement in this way is done as of right,

As for whether the loan is HP for the terms of the CCA or simply a personal loan, it's a question of fact, not of terminology but the deal may still be structured so that it is in fact a loan as the s.99 right to cancel only applies to conditional sales and hire purchase agreements.

NB - don't get into HP agreements with a view to cancelling them once you're half way through. If the deal is a good one - i.e., you've paid the right price for the right product and got the right APR, it shouldn't be to your financial advantage to do this in the first place as even with no deposit, a good deal would always leave you with some equity by the halfway point of the repayments.