Ending polo finance please help

cxj

Hi

I've got a VW polo 2012 1.2l match on finance hire purchase agreement.

I'm paying £240 a month for 36 months. I have paid 1 years worth now. But I would like to get rid of it as it is costing me too much and my financial circumstances have changed. I also do not want to be tied into anything financial.

I have just got a settlement figure of £9780.
I'm not really sure what this means if anyone can help?

There is something about termination that says I can write to terminate my agreement and they will then be entitled to the return of the goods and to half the total amount payable under this agreement which is £7,232. Again I am not really sure what this means? Do I have to have paid that amount in monthly finance payments before I can get rid of it? Which then means I would have to pay around 30 months off before I can give it back. Which seems completely ridiculous.

I might be asking a lot of stupid questions, please could somebody help as you are probably aware I'm not very clued up on this sort of thing.

Many thanks

redpete

cxj wrote: »

But I would like to get rid of it as it is costing me too much and my financial circumstances have changed.

Do you mean get rid of the car or the loan?

I have just got a settlement figure of £9780.
I'm not really sure what this means if anyone can help?

It means that if you pay them £9780 then the car is yours and you owe no more money on it.

There is something about termination that says I can write to terminate my agreement and they will then be entitled to the return of the goods and to half the total amount payable under this agreement which is £7,232. Again I am not really sure what this means?

I think that means that you pay them a lump sum of £7232 and give them back the car and you owe them no more money (and don't have a car!).

Another option is to keep paying the monthly amounts until you have paid half the total then hand them back the car with no further liability for you.

flashg67

cxj wrote: »

There is something about termination that says I can write to terminate my agreement and they will then be entitled to the return of the goods and to half the total amount payable under this agreement which is £7,232. Again I am not really sure what this means? Do I have to have paid that amount in monthly finance payments before I can get rid of it? Which then means I would have to pay around 30 months off before I can give it back. Which seems completely ridiculous.

You are on the right lines - the problem is that the 50% rule applies to the loan + interest. There is normally a time limit too where you can return the car after a certain time (if all payments are up to date) and you can just return the car. Read the small print carefully in the agreement or give them a call - normally you can give the goods back after you have paid 50% of the total (eg loan+interest minus any deposit) - this includes payments made so far. So you have paid so far £240x12= £2880. So, as I see it, pay them another £4352 (£7232-£2880) + give the car back and walk away. Or as said above, pay the full amount outstanding and keep the car.

I've done a Voluntary termination ( VT) and it's quite straightforward but please check your paperwork as every agreement may vary - don't just base a decision on replies on here (including mine!)

BTW - it might seem tough, but it's not ridiculous - you agreed at the start to pay £240 x36 - if you can't or don't want to do this, you will have to pay the price unfortunately

motorguy

cxj wrote: »

Hi

I've got a VW polo 2012 1.2l match on finance hire purchase agreement.

I'm paying £240 a month for 36 months. I have paid 1 years worth now. But I would like to get rid of it as it is costing me too much and my financial circumstances have changed. I also do not want to be tied into anything financial.

I have just got a settlement figure of £9780.
I'm not really sure what this means if anyone can help?

There is something about termination that says I can write to terminate my agreement and they will then be entitled to the return of the goods and to half the total amount payable under this agreement which is £7,232. Again I am not really sure what this means? Do I have to have paid that amount in monthly finance payments before I can get rid of it? Which then means I would have to pay around 30 months off before I can give it back. Which seems completely ridiculous.

I might be asking a lot of stupid questions, please could somebody help as you are probably aware I'm not very clued up on this sort of thing.

Many thanks

Those figures dont stack up. Is this a PCP deal, ie, after 3 years you pay a lump sum or hand the car back?

motorguy

flashg67 wrote: »

You are on the right lines - the problem is that the 50% rule applies to the loan + interest. There is normally a time limit too where you can return the car after a certain time (if all payments are up to date) and you can just return the car. Read the small print carefully in the agreement or give them a call - normally you can give the goods back after you have paid 50% of the total (eg loan+interest minus any deposit) - this includes payments made so far. So you have paid so far £240x12= £2880. So, as I see it, pay them another £4352 (£7232-£2880) + give the car back and walk away. Or as said above, pay the full amount outstanding and keep the car.

I've done a Voluntary termination ( VT) and it's quite straightforward but please check your paperwork as every agreement may vary - don't just base a decision on replies on here (including mine!)

BTW - it might seem tough, but it's not ridiculous - you agreed at the start to pay £240 x36 - if you can't or don't want to do this, you will have to pay the price unfortunately

From memory, the 50% includes any deposit, ie, its the total transaction value including interest charges.

tasticz

looks like the free insurance on polo didn't work out cheap afterall...

anyways if i were you i'd just keep going until the 50% mark and let the car go

jerrynbbt

I have worked in the finance sector within the motor trade for many years and pretty much what has been put previously is correct.

The settlement figure is what is required to clear the total amount outstanding on the car including any rebate of interest charges for settling early. Anything above this figure that the car is worth is your money and anything below is negative equity (What you will have to find to clear the agreement). So you will need to obviously obtain some figures for your car, maybe try we buy any car or a car buying comparison site like dealerbid to see what you are offered.

Now the termination right figure of "£7,232" works like this.
At any point in the agreement have you paid this amount you are entitled to hand the car back and walk away from the vehicle you can also at any point choose to pay up to this amount and walk away. This figure includes both what you have paid as a deposit and installments so far so in your case £2880 + any deposit you may have paid. As someone else has mentioned the figures don't really stack up as your settlement figure is higher than 36 x £240 so it may well be you have a PCP contract or a HP agreement with a baloon payment at the end. This wont really affect anything at this stage however as its simply a case of you having to settle what is outstanding.

pay them another £4352 (£7232-£2880) + give the car back and walk away

... you would only do this if the car is £4252 in negative equity and its a Volkswagen so I doubt you are going to have to go that route, so the first step is to find out how much you can get for the deduct this from the settlement figure and that is what you will owe. It may well be a case of you having to try and sell privately to get as close to the settlement figure as possible but you will have to declare the outstanding finance and usually ask for one payment to be made to the finance company for the settlement amount and the remainder to you (if equity) or payment direct to the finance company with your additional payment if negative equity.

Selling to a dealer will be much more easier as they will obviously be knowledgeable on how this all works and deal with things.

If I can help you in any further way please message me.

Jerry