Voluntary termination on car loan

vixsta7

Afternoon all,

I have a question around voluntary termination of car finance and wondered if anyone could help.

My boyfriend bought a used Ford fiesta on an option deal which he took out in September 2010. He has paid approx 18 months worth of payments. Due to finances he had hoped to sell the car and pay off the finance but wasn't getting much interest. He went to the Polar Ford garage where he bought the vehicle from on Monday 14th May to see if it would be possible to sell the car back to the company.

At the dealership he explained the situation and the car sales person went off to speak with his colleagues. He came back and advised that the remaining finance remaining would not cover the cars worth and advised my boyfriend to take out a voluntary termination. He expained that there would be around £800 worth of negative equity but that under the VT he could just hand the car back with nothing left to pay.

My boyfriend asked if there was anything to sign and he said not, he handed us the portion of the log book which was sent off the very next day and insurance was cancelled...

Fast forward to today, he has received a call from the finance company advising that a VT is not an option as in the small print it states that he must have paid off over half of the outstanding balance.

The finance company have advised my OH that he is still Responsible for the vehicle and that he should pick it up from the dealership and arrange to sell it privately.

On contacting the dealership they have advised that they would not be willing to buy the car as they are currently overstocked. Hey then went on to reconfirm the value of the vehicle as £4500 (it's gone up in value as it was only worth £4000 on Monday)

The dealership have been extremely unhelpful and have said that it isn't their problem. I wondered if anyone could offer any advise. We didn't ask for the VT, we didn't even know it was an option until it was offered. It seems someone has made a mistake in offering it and now won't take accountability .

Gareth19

I had a major problem with a VT last year whereby we had to go to court to settle in in the end as I had VT'd but the finance compnay thought I had voluntary surrendered. One small word but a whole lot of difference apparantly. In the end the court decided that I had indeed done a VT and told the finance company where to go after almost 4 years of harrassing me for nearly £9000! Anyway yes in order to have VT as an option I believe you must have paid off at least 50% of the finance otherwise it is a voluntary surrender whereby your left to pay off ALL the remaining finance! All very complicated.

chalkie99

The dealer sounds like an idiot.

They should definitely know that 50% has to be paid for VT to be applicable and the agreement is with the finance company so it is with them that your boyfriend should have arranged any termination. He cannot just leave it somewhere without their agreement and that agreement should be obtained in writing to guard against future problems.

Sounds as though someone at the dealer has made a mistake and they now want to wash their hands of it to avoid expense.

How long was the agreement for?

vixsta7

It is indeed! My boyf was happy to pay the negative equity amount but was advised that he "qualified for VT" since he was halfway through his agreement and that this would be the better option. He's now being advised that the car garage won't even buy the car back since they are over stocked. We've already sent the log book slip off which details polar ford as the owner so I'm confused as to where we can go from here.

vixsta7

Yeah I think this too chalkie, it's 48 month agreement. They've also stamped the log book too!

KingElvis

You need to talk to the finance comapny about the VT, not the garage.

I'm not suprised the dealer has been poor as it's not their job.

vscar

vt cars I had paid half of my car payments and due to financial difficulty I contacted the finance company whom told me that I could vt my car and owe nothing. I took my car to the stated place and surrendered it but now they say that they want nearly £1500 for general wear and tear. ( mostly small scratches ) the car was in excellent condition and mileage below average. The car has not even went through auction yet so Im confused as to how they can ask for this money. please advise

plane_boy2000

1500 is a lot of wear and tear. Everybody has an idea of what is good and poor condition.

I've leased my last few cars so have had to go through this upon return, and so far have never been charged for anything upon return. My last car had a couple of small things wrong that I expected to be charged for, but they said as it was so small it had no detrimental effect on the value of the car, so they waived the charges of £160

Condition is not just based upon scratches. Were all the tyres legal and in good condition? Service history stamped and up to date? Car returned really clean?

If they are asking for £1500 then they should be giving you a breakdown of how they arrived at this cost

CrazyAngel_3

NO NO AND NO! In this case the Finance company are WRONG! In order for your boyfriend to be able to voluntarily terminate he has to be able to pay up to 50% he doesnt already have to have paid it.

Call the finance company, tell them that although 50% has not yet been paid he still wants to terminate under the half rule. He will then be able to come to a payment arrangement with the finance company for the shortfall up to the 50%, which will not affect his credit rating.

If they do not accept this COMPLAIN in writing.

One thing that absolutely must be done is surrender IN WRITING to the finance company, not the dealer. Then there can be no issues as to whether it was surrendered by your boyfriend or terminated.

I manage the legal department for a car finance company and can tell you that the finance company are handling this the wrong way. Dont bother with any communication with the dealer as they have nothing to do with the finance on the vehicle - remember the finance company own the vehicle, the garage just had the vehicle for sale.

DCFC79

CrazyAngel were you replying to the reply by vscar ?

If so they dragged up a thread from back in march which was started by vixsta7 whose bf was happy to pay the negative equity amount, its over 5 months now so I hope vixsta has got it sorted.

CrazyAngel_3

Doh !!

Didnt see that the thread was started back in May and that vscar has made a recent post on a new issue.

Note to self made to pay more attention! :-)