Cant afford car finance, can i hand car back?

nikkikitch

Hi

I have a car on finance which ive paid over two years of a 4 year deal.

Ive just been made redundant and cant afford the car anymore, it costs me over £500 per month all in!

Ive paid over two years worth of payments but because its NOT hire purchase, im not sure i can just hand it back?

The company have offered me a settlement figure, which i cant afford BUT the other point worth mentioning is that ive had doubts as to the validity of the credit agreement and bill of sale that the car was secured on. As theres no concrete law on this its hard to be able to pursue it, but the general concensus from consumer forums is that if the bill of sale is void, then the credit agreement is void.
Ive tried to use this to bargain with them and suggested half of the settlement figure as a 'goodwill gesture' and so i dont sue them!
They obviously didnt accept that and have demanded the full settlement figure or a payment (im behind by two payments).
Ive gone back today and said im happy for them to take the car back as full and final settlement of the account, again, i doubt they'll go for that!

So couple of questions, if they wont accept the car back as settlement, will they come after me for the full remaining finance on the car or the settlement figure?
The car is worth about £3.5k and the settlement is £4300, if they dont accept my offer, i could go back with 'have the car and ill pay the other £800?

My understanding is that if they take the car, the finance essentially becomes an unsecured loan, meaning i only have to pay whatever i can afford, which at the moment is nothing! Which again im sure theyd rather have something off me than nothing!

If it went to court, how valid would my argument be that the whole agreement is void?

Sorry for long winded post, just trying to work out whats the best thing to do!

I understand i took the finance out and im not trying to shirk that, which is why im offering to just give them the car back and potentially pay the difference between that and the settlement figure.

Thanks a lot.

chalkie99

OK - if it's not Hire Purchase then what is it? What does it actually say at the head of the agreement?

Who is the finance with?

It's unlikely the credit agreement is illegal and, if it is, then a bit convenient you haven't noticed until you cannot make the payments.

What we need to establish primarily is what sort of agreement it is. If the car is somehow secured against the loan but not HP then it is not yours to sell and you cannot automatically terminate the agreement.

You may, however, be able to come to an arrangement where a dealer can buy the car from you ansd settle the finance on your behalf if you can find a way of coming up with the shortfall.

As you have missed payments you are now defaulting on the agreement so unless you can pay the settlement figure in full now then you will owe the full amount of the loan.

An unsecured loan doesn't give you the freedom to pay as little as you like. You are already harming your credit record by missing payments and if the loan company get a CCJ against you then your chance of credit in the next six years are trashed.

glasgowsaver2011

I had similar (check previous posts)

I was named on a loan with Suzuki finance (it was not hp with a termination clause) it was essentially a loan over a car (though the car was not security).

When my ex died I wanted to Hand the car back, (2 years left out of 5)

They would not accept this so I sold it privately - never told the finance company

I got 3200 there was 4k left.

I just paid the money into the Loan.

And paid what was left when I could month through month.

Also I had to make sure there was no HP marker on the car (even though it was not on HP)

So sell it and pay every penny to the finance company and then pay the rest monthly when you can

nikkikitch

hi

Its a very archaic type of finance , in that its secured on a bill of sale with Cygnet finance/funding corporation. I got the car through ACF who, after researching are renowned for their mis -selling and potentially void agreements.

I actually knew very soon in to the agreement after reading various other peoples doubts on other consumer forums about the same company, but as i took the finance out , i had every intention of keeping repayments up so as not to damage my credit and knew that it would be a lengthy battle to try and prove as much.
I genuinely cant afford to pay any more, im not trying to get out of this for any other reason. Ive always made my payments on time and in full up until now.

Im not suggesting i sell it, i couldnt anyway as it has finance registered against it.

These types of agreements are very confusing as whilst it isnt a HP agreement , it still acts as though it is by registering finance against it!

Im not suggesting i can pay as little as i like, just that i cannot be forced to pay what i havent got right now! And surely if i hand the car back and offer to pay the remaining, then thats better than me paying small monthly payments in their eyes?

Thanks

Apples2

Crikey, to think the only reason you signed up to this 500 per month deal was to improve your credit score

https://forums.moneysavingexpert.com/discussion/comment/41531708#Comment_41531708

DCFC79

Apples2 wrote: »

Crikey, to think the only reason you signed up to this 500 per month deal was to improve your credit score

https://forums.moneysavingexpert.com/discussion/comment/41531708#Comment_41531708

You yourself said " Surely to goodness you could have thought of better ways of improving your credit rating than buying an overpriced car on a massively overpriced finance deal"

and its not worked out as the OP is stuck with a car thats costing them £500 a month.

sharpy2010

People trying to get out of paying their loans on technicalities are the cancer of modern society.

PAY YOUR BILLS.

nikkikitch

as ive already said, i am not trying to 'get out of' anything. I have been made redundant and can genuinely no longer afford the car, believe me id rather not be in the position i am. I have always paid on time and in full and this site is meant to be about advice and guidance, not chastising.

plum44_2

No I would say its a bit of both.. otherwise how did we all finally get sense....

polka_dot_rock_and_roll

sorry this is a bit disjointed

bill ofsale = stamped by the court so if it went to court i would say there not much chance they will agree the whole agreement is void as they were the ones whovalidated it. Unless you can prove its invalid you can actually get that from the finance company, they have an obligation to tell you if you ask, also ifthey repossess a car and the bill of sale is invalid then that’s where it gets serious & they may need to pay you money back for doing an illegal repossession.

They don’t often take people to court so it would have to be at your cost, generally they sell you debt on to other people, e.g door step collectors or look into litigationaction.

ask for acopy of your contract showing the court stamp – they need to provide you of this,

If they repossess the car then they sell the car and the value the car gets is taking off yourremaining balance, but you still owe the remainder. So still left in debt with nothing to show.

They cant sell the car in a local auto trader so the value you are probably getting is more than they will get for the car i would suggest asking what average price they would get for the car so then at least you know what you outstanding debt is??

Once thecar is gone the loan is secured on nothing so your right you can offer them what is in your means , but they would rather have the car back as they don’t want to work with you.they may as well take the car now and sell it rather than further down the line when the car has lost value. You will find with the outstanding balance you can actually make an offer to settle what ever is left over in a one off payment & they will probably send out letters offering you to pay 75% of whats left over &cal it a day.

If you are not happy & getting no response or need some one higher up to look at thingsfor you then why not e-mail the managing director [EMAIL="davidchallinor@thefundingcorporation.com"]davidchallinor@thefundingcorporation.com[/EMAIL]you may as well go to some one who can make a decision& the things you are requesting are not unreasonable.

Being 2payments down i suggest you may want to look into timing orders ASAP this can help you pay something – a court agreement so you can keep the car until yoursituation improves.

DCFC79

nikkikitch wrote: »

as ive already said, i am not trying to 'get out of' anything. I have been made redundant and can genuinely no longer afford the car, believe me id rather not be in the position i am. I have always paid on time and in full and this site is meant to be about advice and guidance, not chastising.

So did you leave it 2 years to bring up your doubts as to the validity of the credit agreement and bill of sale that the car was secured on ?