The Halves & Thirds rule for returning a financed car?

Zebedee69

Cant see it affecting credit rating. There is no way on Experian to record such a thing.

Alexandria

mjt222 wrote: »

Does using VT affect your credit rating in anyway, I realise that finance companies might not "like" it, but does it add a black mark to your rating ?

For info mine is with Black Horse and I have paid more than half, however the car is now in ngative equity and so this seems the cheapest way out of the agreement.

I had an agreement with black horse last year and I returned the car under the halves rule. They were perfectly ok, did try to see if they could offer me additional financing for the bigger car I was getting but I explained I was getting an interest free loan from gramps. They gave me option to return to a local point or have it collected, collection was charged so I chose to take it in on a saturday morning. They gave me a receipt and that was that!

mjt222

Excellent, just what I am going to do then

mjt222

Wrote off to Black Horse advising that I was terminating the agreement under 99 of the Consumer Credit Act 1974. I got a letter back today stating that yes I could terminate, but I wuld have to pay £145 in order to do this ? Is that correct ?

I also would have to pay for collection, or I can deliver to an auction house, I understand that bit, however they are also telling me that the car will have to be taxed, which it was not when i bought it, is that correct as well ?

Any advice would be appreciated.
Thanks

DjDanny32

I think most finance agreements are paid in arrears, so this £145 payment might just be a pro-rata payment for the number of days since your last payment, to bring you up to date. But they should have explained that to you!

fivefootfive

Sorry to be the bearer of bad news but it does show up on your credit report somehow; I have the credit expert service with Experian and it didnt show on what I printed out. But, when we were searched recently for a mortgage (and they used Experian) they came back and declined us as I had done this seven years ago when we had two cars and a company van so didnt need two cars. We went back and explained the situation as it came up as a termination of credit agreement and return of goods; that it wasn't a repossession etc but it made no difference.

RedFire

I'm sorry fivefottfive but you are incorrect. I used to work for Experian and have handed five cars back to the same company over the last twelve years, all without reducing my ability to get credit or indeed 'blackening' my good name.

The Consumer Credit Act is enshrined in British law and therefore it is totally legal and is designed to protect the consumer from falling prey to negative equty.

As detailed in this thread already, once you have paid one third of the total amount owing, the lender has to go through the courts to reclaim their goods should you fail to keep up relayments, however once you have paid half of the total amount owing, you are able to return the goods, so long as they are in 'reasonable condition', and this is based on 'fair wear and tear'.

These finance companies will inevitably send the car back to auction and they quite rightly want as much for the car as possible, hence they want the car to be damage free and all alloy wheels in good condition. Mileage is exempt and this is why people like me, who do an extraordinary amount of miles and see their vehicle depreciate rapidly, are aware of and use this rule regularly to our advantage.

Generally speaking, most car finance companies will provide you with a 'fair wear and tear' guide which details (in picture form) what is reasonable when considering this option. Indeed, most of them also 'voluntary termination', or 'VT' as it's known in the trade, as an option to press on the telephone keypad when making a call to them, yet another indication that the practice is far more common place than one might initally presume.

Dazza6

Does lease purchase work in the same way. I have a car with Volkswagon Audi Finance and I need to get rid as the payments are becoming very difficult. Problem is the purchase agreement states " Unregulated"
I am considering a DMP so if there is a payment to make it will just have to join the pot

kikster

I'm thinking of using the 'halves' legislation to return my car which I bought on PCP in December 2005. By now I've certainly paid more than the 50% cut-off mentioned in the thread above and so I'm encouraged the approach might work for me. However, elsewhere I have heard that there is a £25K limit to the value of finance to which this legislation applies. Can anyone confirm/deny this?

nomoneytoday

Dazza6 wrote: »

Does lease purchase work in the same way. I have a car with Volkswagon Audi Finance and I need to get rid as the payments are becoming very difficult. Problem is the purchase agreement states " Unregulated"
I am considering a DMP so if there is a payment to make it will just have to join the pot

Probably not. It will be on your key facts document if applicable.