Hire Purchase Small Print - Exercising My Rights, will it effect my credit score?

freddyfreddy123

Hi. I have just taken out a Hire Purchase Agreement on a new vehicle.

The total value of the finance for the purposes of this forum is £20k, including all payable interest and acceptance fees. (Which I personally think is disgusting!)

It was highlighted to me by the Finance man at VW, (despite him telling me VW Financial Services, do not like highlighted to their customers...) that after 50% is repaid to the finance company, I have to right to return the goods (providing they are in a good, working order) and walk away from the agreement.

My understanding is, when the time comes that £10,000 has been repaid to the Finance company, probably within 4 years time, I could have the vehicle valued, and if it's current value is less than £10,000 I can hand it back and 'cut my losses'.

This sounds great - But would this negatively effect my ability to get another vehicle on a hire purchase agreement? - Whilst one finance company may choose to not re-lend to me, based on this action, can this effect my ability to get credit elsewhere if I wanted to repeat this.

- It's just an idea that was put into my head....

Please help me by discussing the pros and cons below.

thank you.

dan.

BugsyBrowne

It shouldn't do but don't be surprised if VT will be marked on your credit report.

freddyfreddy123

BugsyBrowne wrote: »

It shouldn't do but don't be surprised if VT will be marked on your credit report.

VT? - Please elaborate.

CLAPTON

as you consider the interest is 'disgusting' maybe next time you should consider saving up and only buying things you can afford


VT= voluntary termination

freddyfreddy123

CLAPTON wrote: »

as you consider the interest is 'disgusting' maybe next time you should consider saving up and only buying things you can afford

Sorry, you misunderstood / I didn't make that bit clear. It's the acceptance fee which I believe is a disgusting charge, something that I wasn't made aware of until the last moment.

The interest on the finance is fairly reasonable, incorporates all the servicing for the first 36months, it's a VW BlueMotion, so I'm getting 3 times the mpg than my ageing sporty audi, insurance is cheaper, road tax is cheaper. I'm £370 a month better off, which I'm planning on using to pay off the loan a year early.

Thank you for clarifying VT.

Just out of interest, what would appear if a Loan was paid off in full a year/18 months early. (I have checked and there are no financial penalties for paying off early as the interest was calculated at beginning and added to the sum owed.)

CLAPTON

Does it say anything about early settlement; if so quote the exact details