VT problem on car finance

dazahunter

Hi,I have just recieved a letter(notice of sums in arrears) from close motor finance even though I have returned the car as volantary termination.I had paid off nearly 3/4 of the finance before requesting the VT.They arranged collection and I agreed to pay the collection charge of 100 plus vat.The car was collected over 6 weeks ago and I still made the payments,As I didnt hear anything after the car was collected I contacted them last week and was told its in the final stages,the last payment made this month was applied for nearly a week early by DD which promted my phone call to them.They advised this was a mistake and a credit was made back to my bank.
Now today I recieved this letter "notice of sums inarrears" stating the following.
Amount Due Payment Made
S-IR interest rebate 87.37
S-IP1 PPP Insurance Profit 160.00
S-RFR reverse future rentals 1604.25
S-WO write off amount 16.64
S-ACCWO clear down accep fee 10.39
S-VPFWO clear down vpf fee 2.62
Sale of vehicle 1130.00
Refund Cheque Issued 106.95

Totals 1871.20 1247.02

Current balance C/fwd 624.18
Arrears balance C/fwd 624.18


Why are they trying to charge me? and why think I am in arrears.
Do I have to pay this?
thanks

gb12345

dazahunter wrote: »

Hi,I have just recieved a letter(notice of sums in arrears) from close motor finance even though I have returned the car as volantary termination.I had paid off nearly 3/4 of the finance before requesting the VT.They arranged collection and I agreed to pay the collection charge of 100 plus vat.The car was collected over 6 weeks ago and I still made the payments,As I didnt hear anything after the car was collected I contacted them last week and was told its in the final stages,the last payment made this month was applied for nearly a week early by DD which promted my phone call to them.They advised this was a mistake and a credit was made back to my bank.
Now today I recieved this letter "notice of sums inarrears" stating the following.
Amount Due Payment Made
S-IR interest rebate 87.37
S-IP1 PPP Insurance Profit 160.00
S-RFR reverse future rentals 1604.25
S-WO write off amount 16.64
S-ACCWO clear down accep fee 10.39
S-VPFWO clear down vpf fee 2.62
Sale of vehicle 1130.00
Refund Cheque Issued 106.95

Totals 1871.20 1247.02

Current balance C/fwd 624.18
Arrears balance C/fwd 624.18


Why are they trying to charge me? and why think I am in arrears.
Do I have to pay this?
thanks

I can't make the figures add up to the totals, but what they are basically saying is that you owe them £1871.20 to clear the finance and that the car is only worth £1,130.00 so you owe them the balance (less the £106.95 refund they owe you).

dazahunter

Hi,I thought that i could cancel the agreement under as a vt and not have to pay any more,I have not missed any payments.
The reason behind my completing a vt is the cars value was way below what i would have had to pay over the next year(neg equity).
I had beed advised by close finance that this would be the case. the letter seems to be making me pay the difference to what the car was sold for and what i had left on the finance plus other charges?

gb12345

dazahunter wrote: »

Hi,I thought that i could cancel the agreement under as a vt and not have to pay any more,I have not missed any payments.
The reason behind my completing a vt is the cars value was way below what i would have had to pay over the next year(neg equity).
I had beed advised by close finance that this would be the case. the letter seems to be making me pay the difference to what the car was sold for and what i had left on the finance plus other charges?

That is correct - why would you expect the finance company to take a hit on the fact that the car is worth less than what you owe them?

You would have to ask them what exactly the other charges are and how they justify them.

Each month, you would have been paying them capital and interest on the outstanding capital. They are saying that there is still £1604.25 capital outstanding at the time you have handed the car back.

pheonixrising21

gb12345 wrote: »

That is correct - why would you expect the finance company to take a hit on the fact that the car is worth less than what you owe them?

I may be wrong on this, but isn't the point of VT that the finance company do take the hit on the car being worth less than you owe?. that's why it can only be done when a certain amount of the loan has been repaid.

I mean, what would be the point of VT'ing a car that's worth more than you owe? Wouldn't it be better to sell the car and pocket the difference?

jellie

dazahunter wrote: »

Hi,I thought that i could cancel the agreement under as a vt and not have to pay any more,I have not missed any payments.
The reason behind my completing a vt is the cars value was way below what i would have had to pay over the next year(neg equity).
I had beed advised by close finance that this would be the case. the letter seems to be making me pay the difference to what the car was sold for and what i had left on the finance plus other charges?

Was this an HP loan because if so, the amount the vehicle was sold for is irrelevant. It's the figure you've repaid against the total cost of the vehicle which is the relevant amount.

Did you check with the finance company before you VTd what, if anything, would be left to pay? You should have received the amount you would owe (if anything) before you went ahead.

Have you checked your loan agreement to see what it says about being able to VT?