Car HP: Voluntary Termination Vs Surrender

dingobingo

Hi folks,

I recently became unemployed and as I'd paid off more than half of my car HP I requested to voluntarily terminate my contract and hand the car back.

I was told today that back in 2010 I was issued with a default notice. I don't recall this, my payments have been up to date for as long as I remember. I'm sure their information is correct though.

But they say because of this it becomes a surrender instead of a termination and that I need to cover any difference between the auction revenue and what's left on the agreement.

There's about 6k left on the agreement and I'm afraid it could go at a silly price at auction leaving me with a huge amount to pay off.

I'd like to ask, are they allowed to change the conditions like that after a default notice has been issued?

Finally, I've heard it's tough to sell a car with HP on it and to convince the buyer it will be paid off. Any experience in that area?

Thank you.

keithrgj

WHO IS THE FINANCE COMPANY

this is rbbbish

you can do a voluntary termination at any time, does not have to be 50 % of the agreement (but would be liable up to the 50% mark) if not all ready reached

as long as you have made more than half of the required payments then you can request a voluntary termination

i bet they mentioned about the default notice on the phone and not in writing

dingobingo

Are we allowed to name firms? :-)

They did mention it on the phone today, although strangely they didn't when I first called them about it. However, my account manager says it is in writing on my contract and will send me a copy.

I know from experience that whilst it might be legal to put something into a contract, this doesn't mean it's enforceable by law, so I was wondering if there was any over-arching HP termination law. Or is it a case of whatever I've signed up to? In which case it's my fault I guess.

It's just going to be tough to manage £300 a month payments for 20 months (time remaining) with no job

keithrgj

TO BE USED WHEN YOU WANT TO TERMINATE A HIRE PURCHASE AGREEMENT WITH YOUR CREDITOR

(Your home address)

The Date

To:

Dear Sir/Madam

Voluntary Termination of Agreement
Account No:
Car Make/Model/Registration No

I am/we are writing to notify you that I am/we are exercising my/our right to terminate the above agreement under Section 99 of the Consumer Credit Act 1974.
I/we understand that I shall/we will be liable to you for the amount calculated under the formula in Section 100 of the Consumer Credit Act 1974.

Please send me/us details of how the vehicle can be returned to you.
Please confirm receipt of this request in writing by return.

Yours faithfully
Your Name

send the above by recorded delivery, they have no excuse then, and to your answer your question, a companies own t&c does not over ride the cca 1974

keithrgj

Section 100 says that the debtor is only due to pay on termination the sum equal to half the total price less the agregate of amount paid and any amouts due under the agreement.

To me this means that any arears have to be invoced after the termination. In other words payment of the arrears is not needed on termination.

poppasmurf_bewdley

I think if you check other threads on this forum, you will find that if you have broken any of the conditions of the agreement, ie missed payments, then the loan company is within its rights not to accept a Voluntary Termination.

Basically, it means if you have broken the agreement, then so can the loan company.

keithrgj

poppasmurf_bewdley wrote: »

I think if you check other threads on this forum, you will find that if you have broken any of the conditions of the agreement, ie missed payments, then the loan company is within its rights not to accept a Voluntary Termination.

Basically, it means if you have broken the agreement, then so can the loan company.

i agree with the reasoning of the above but the cca 1974 states different

i realise this is a gray area and the FOS may get involved but the cca is the statutory instrament

if the agreement had been breached then the creditor is entitled to end the agreement.

I WOULD ADVISE CHECKING THEIR CREDIT FILE TO SEE IF A DEFAULT HAS BEEN REGISTERED BY THE FINANCE COMPANY

its well know these car finance companies come out with this crap over missed payment etc as it happened to me by a telephone drone

getting them to put the breach in writing is a whole new ball game

molerat

poppasmurf_bewdley wrote: »

I think if you check other threads on this forum, you will find that if you have broken any of the conditions of the agreement, ie missed payments, then the loan company is within its rights not to accept a Voluntary Termination.

Basically, it means if you have broken the agreement, then so can the loan company.

I believe that unenforceable clause was kicked into touch a while back.

BugsyBrowne

1) Contrary to popular belief, the debtor is fully entitled to terminate the agreement at any time. It does not matter if he is in arrears or if he has paid half of the total amount on the contract.

SeanG79

http://paulatwatsonssolicitors.wordpress.com/2012/08/22/hire-purchase-agreements-and-s90-92-consumer-credit-act-1974/

Over the past few months i have dealt with a number of hire purchase cases whereby the creditor has taken possession of protected goods upon a debtor breaching the terms of the agreement regulated by the Consumer Credit Act 1974.
Protected goods are goods that more than one third of the repayments due under the agreement have been paid. Where the debtor has paid more than the one third of the total repayments before repossession the creditor would need an order of the Court to be entitled to repossess the goods. It is worth visiting the relevant sections of the Consumer Credit Act
90 Retaking of protected hire-purchase etc. goods.
(1)At any time when—
(a)the debtor is in breach of a regulated hire-purchase or a regulated conditional sale agreement relating to goods, and
(b)the debtor has paid to the creditor one-third or more of the total price of the goods, and
(c)the property in the goods remains in the creditor,
the creditor is not entitled to recover possession of the goods from the debtor except on an order of the court.
(2)Where under a hire-purchase or conditional sale agreement the creditor is required to carry out any installation and the agreement specifies, as part of the total price, the amount to be paid in respect of the installation (the “installation charge ”) the reference in subsection (1)(b) to one-third of the total price shall be construed as a reference to the aggregate of the installation charge and one-third of the remainder of the total price.
(3)In a case where—
(a)subsection (1)(a) is satisfied, but not subsection (1)(b), and
(b)subsection (1)(b) was satisfied on a previous occasion in relation to an earlier agreement, being a regulated hire-purchase or regulated conditional sale agreement, between the same parties, and relating to any of the goods comprised in the later agreement (whether or not other goods were also included),
subsection (1) shall apply to the later agreement with the omission of paragraph (b).
(4)If the later agreement is a modifying agreement, subsection (3) shall apply with the substitution, for the second reference to the later agreement, of a reference to the modifying agreement.
(5)Subsection (1) shall not apply, or shall cease to apply, to an agreement if the debtor has terminated, or terminates, the agreement.
(6)Where subsection (1) applies to an agreement at the death of the debtor, it shall continue to apply (in relation to the possessor of the goods) until the grant of probate or administration, or (in Scotland) confirmation (on which the personal representative would fall to be treated as the debtor).
(7)Goods falling within this section are in this Act referred to as “protected goods ”.
91 Consequences of breach of s. 90.
If goods are recovered by the creditor in contravention of section 90—
(a)the regulated agreement, if not previous terminated, shall terminate, and
(b)the debtor shall be released from all liability under the agreement, and shall be entitled to recover from the creditor all sums paid by the debtor under the agreement.
92 Recovery of possession of goods or land.
(1)Except under an order of the court, the creditor or owner shall not be entitled to enter any premises to take possession of goods subject to a regulated hire-purchase agreement, regulated conditional sale agreement or regulated consumer hire agreement.
(2)At any time when the debtor is in breach of a regulated conditional sale agreement relating to land, the creditor is entitled to recover possession of the land from the debtor, or any person claiming under him, on an order of the court only.
(3)An entry in contravention of subsection (1) or (2) is actionable as a breach of statutory duty.
The above is pretty clear yes? so why do creditors get themselves caught out? well the difficulty Mr Creditor seems to have is, in the cases ive dealt with, they have tried to argue that the debtor returned the keys, thus consented to the repossession and therefore the one third rule et al is irrelevant.
However, while a debtor can indeed consent to enforcement under the act, when it comes to repossession of protected goods the consent must be “informed consent” and in the cases which i have dealt with, the consent was clearly not informed consent.
The Court of Appeal case of Chartered Trust v Pritcher makes it very clear that recovery of protected goods must be by informed consent. So what does this mean? In Pritcher, the debtor had not been made fully aware of his statutory rights before the vehicle was repossessed. Such as the right to keep the goods after more than one third of the repayments had been made and seek a time order from the Court. This right was not explained to Mr Pritcher and therefore his consent was not informed consent. While the Pritcher case was relevant to the Hire Purchase Act, the editors of Goode agreed that the case would apply to the provisions of s90 Consumer Credit Act .
Given the amount of defective Default notices that we see, there is no doubt that some lenders will face a real difficulty if they repo protected goods after one third of the repayments have been made without securing informed consent of the debtor. It is my view that a materially bad default which does not provide the debtor with statutory information required by the Consumer Credit Act could invalidate any consent that the debtor may have given, if he did so not fully aware of his rights.
I have already dealt with such a case where the client was entitled to a refund of all monies paid under the agreement because informed consent was not achieved.

keithrgj

BugsyBrowne wrote: »

1) Contrary to popular belief, the debtor is fully entitled to terminate the agreement at any time. It does not matter if he is in arrears or if he has paid half of the total amount on the contract.

TOTALLY AGREE ON THE ABOVE STATEMENT

use the CCA 1974, or i should say 2006 now