Welcome Finance car loan - advice?

elizabeth01

I'm hoping someone can help me out here, I'm not very good at all things money...

In July 2008 I took out a Hire Purchase car loan with Welcome Finance. It was a 4-year-loan so I only have another 10 months outstanding. The monthly cost is £375.

I am self-employed but have recently suffered badly. I carried on making the payments out of a small amount of savings I had (thinking that I would get another job) but, months down the line, I still have not been able to get a job and my savings have run out. I am now in the position where I just don't have enough money to make even one more payment to Welcome.

The original agreement states:

£13,669.38 for the goods
£4,699.62 for the 'insurances' (Payment Protection, Mechanical Breakdown, Shortfall Extra)
£18,369 total.

The car is a 2004 plate Mazda.

My question is this: can I return the car to them and, if I do, will that mean an end to the payments? Or am I still liable for the payments until the end of the term? My main worry is that the car has some bodywork damage (bumps and scrapes), so they probably won't get that much for it if they sell it. But my financial situation means I can't afford the repairs now anyway.

If anyone has been in a similar situation, can you offer any advice? Thank you.

Tubbss

By the sounds of it you are in a position to voluntarily terminate the agreement with nothing more to pay (possibly with the exception of make good costs for the damaged bodywork).

You could also look into the PPI with a view to mis-selling, in which case you would be entitled to a refund + interest. As Welcome are in default, their PPI refunds are been done by the FSCS - well worth the cost of a phonecall to get a claim started!

CHR15

Go for VT but whatever you do DO NOT MISS THE NEXT PAYMENT.

Being able to VT a car under a HP Agremeent is a contract term you can exploit, as Tubbss aludes to, you can give it back with nothing else to pay (aside from an adjustment if you have trashed it). The day you miss a payment the Contract is void so the option to VT is removed. You will then be stuck with it for the remainder of the term.

If you miss a payment now, you wil not be able to VT and therefore your remaining 10 months @ £375 will cost you dearly (and I mean DEARLY), much more than £3,750.

Do whatever you can to make the next payment and get applying for a VT today, every hour counts.

BenL

If you are self employed they would never have paid out on the PPI. Have a look at reclaiming for that as it looks to have been mis-sold.

iolanthe07

Nearly 14 grand for a four year old Mazda (in 2008)? Then a load of spurious 'insurances?' You've been well shafted, I'm afraid. What model Mazda was it?

chanz4

Just say the damage was already there when you had it, make them prove different.

elizabeth01

iolanthe07 wrote: »

Nearly 14 grand for a four year old Mazda (in 2008)? Then a load of spurious 'insurances?' You've been well shafted, I'm afraid. What model Mazda was it?

Hi - it's a Mazda 6 - and yes, you're right, I have been shafted. I've already easily paid for the car, and then some

Thank you to those who suggested I might have a claim for the PPI - I've just checked my paperwork and the PPI (with interest) amounts to around £3,200! So I am going to put a claim in for mis-selling and, with a bit of luck, I might get that money back/put it towards the cost of paying the loan off.

Thanks again.

elizabeth01

CHR15 wrote: »

Go for VT but whatever you do DO NOT MISS THE NEXT PAYMENT.

Being able to VT a car under a HP Agremeent is a contract term you can exploit, as Tubbss aludes to, you can give it back with nothing else to pay (aside from an adjustment if you have trashed it). The day you miss a payment the Contract is void so the option to VT is removed. You will then be stuck with it for the remainder of the term.

If you miss a payment now, you wil not be able to VT and therefore your remaining 10 months @ £375 will cost you dearly (and I mean DEARLY), much more than £3,750.

Do whatever you can to make the next payment and get applying for a VT today, every hour counts.

Thank you for this good advice. I've now managed to get together enough to make this month's payment. If my claim for mis-selling of the PPI isn't successful, I'll look to VT.

Dabooka

I'd look at VTing it first, I bet if your PPI claim was upheld they'd "offset" against the money owed.

pipz_2

i looked into a VT when i had a car with WFS which was in need of a lot of things doing to it ( i too got well and truely shafted by them, its just what they do!), anyway, i found out that WFS are very difficult when trying to do a VT, no surprise there really eh? They will take into account every knock, scratch, untidy part of the car and charge you for it & they will make it very difficult for you and im not sure what you should do first because if you VT the car you wont pay back all of the loan anyway so would they refund you ppi? Its a difficult one so i would make sure you really know your facts before you decide what you are going to do but if they do take the ppi from the money owed it would greatly reduce the amount you owe. Just remember that the FSCS only refund 90% of the ppi. I have had two lots of ppi from welcome one post 2005 and one pre 2005. The post one i got about 2400 on a car that cost 11,000 with WFS (before interest ect, that was just the cost of the car), the pre 2005 loan they are offering me over 4000 on a car that was about 9000. Im not much use with all the legal stuff but i hope that helps somehow? good luck

skintandscared_2

Dabooka wrote: »

I'd look at VTing it first, I bet if your PPI claim was upheld they'd "offset" against the money owed.

But if they offset the PPI against the amount still outstanding, the OP would probably then own the car outright - problem solved, surely?!