Early Termination on Finance Car.

eddie864

So I understand that I can hand the car back after paying 50% of the payments. Does this mean just the car or does it include the GAP insurance and Breakdown Cover that is included in the overall finance? The car with all the charges is £4580 over three years, the GAP insurance is £584 over three years and the breakdown cover £320 over two years.

I've already paid 15 payments of £153.38 (I think the car is £104 of this) and up to date. Will I have to pay the GAP insurance and breakdown cover or can I cancel these first? They were part of the finance and I don't know if by paying it this way means I have to pay the whole lot or if I return the car these extras can be cancelled.

Thanks for any advice.

OddballJamie

£584 of GAP cover on a £4k car! Carcraft by any chance?

Rain_Shadow

Ring the finance company and ask them. Only they can tell you if you have paid the required amount or, if you haven't, how much more you need to pay.

forgotmyname

Is it HP or a personal loan though?

motorguy

eddie864 wrote: »

So I understand that I can hand the car back after paying 50% of the payments. Does this mean just the car or does it include the GAP insurance and Breakdown Cover that is included in the overall finance? The car with all the charges is £4580 over three years, the GAP insurance is £584 over three years and the breakdown cover £320 over two years.

I've already paid 15 payments of £153.38 (I think the car is £104 of this) and up to date. Will I have to pay the GAP insurance and breakdown cover or can I cancel these first? They were part of the finance and I don't know if by paying it this way means I have to pay the whole lot or if I return the car these extras can be cancelled.

Thanks for any advice.

For future reference, you were seriously robbed blind on the GAP insurance and the breakdown cover. You could have been paying £250 for three years GAP and £59 per year fully comprehensive breakdown cover.

For info, its not 50% of the payments, its 50% of the total amount of the transaction. You would need to check the finance agreement that you signed, or phone the finance company. Unless you bought a particularly old car it sounds like you might have a PCP type deal whereby there is a balloon payment? If thats the case, you will be around 30-33 months in before you typically reach the halfway point.

eddie864

Thanks for your replies.

The car, GAP and Breakdown cover came via First Response finance and to get the credit we had to provide a lot of income details and get references. I'm disabled on DLA and needed a car very quickly after my last one ended up scrapped.

The car is a 54 reg Vauxhall Zafira Life with 74K miles and to be honest I didn't think I would get the credit to buy a car when the last one died on me. I bought it from a small, local Vauxhall dealer and I realise the car was overpriced (£2995) and the credit was expensive but to be honest we were desperate as I'm disabled and my last car went expensively wrong and was scrapped. My disability needs now require a modified car and motability will provide a new car when this is given back.

The car is on HP and having found the credit agreement it appears I can voluntarily terminate and hand the car back when I've paid £2390. I've paid 15 payments of £125.14 (£1877.10 total) so I've just over 4 months to pay. Still not sure if I will be able to just cancel the GAP insurance and/or the breakdown cover but both are only £28 a month.

OddballJamie

Reading this is making me angry at the dealer.

Not sure if it will help but you could write a letter to the Dealer Principal stating that you were mis sold the GAP insurance and were taking advantage of due to the position you were in. Send it recorded.
If you don't hear anything within 14 days, post the text of the letter to their Facebook wall.

£584 on a £3k car. Grrrrrrr!

picky123

OddballJamie wrote: »

Reading this is making me angry at the dealer.

Not sure if it will help but you could write a letter to the Dealer Principal stating that you were mis sold the GAP insurance and were taking advantage of due to the position you were in. Send it recorded.
If you don't hear anything within 14 days, post the text of the letter to their Facebook wall.

£584 on a £3k car. Grrrrrrr!

That is an outrageous suggestion, not a single item posted has suggested that it was mis sold, expensive I grant you, but there is a big difference. Maybe OP was more in need of gap, as they do not seem to have much money

OddballJamie

picky123 wrote: »

That is an outrageous suggestion, not a single item posted has suggested that it was mis sold, expensive I grant you, but there is a big difference. Maybe OP was more in need of gap, as they do not seem to have much money

Why is it an outrageous suggestion?
£584 of GAP insurance is not necessary on a car that has already lost over 80% of it's value in depreciation.

Either you are the kind of person that agrees with scamming people in desperate situations or you don't understand what GAP insurance is for.

eddie864

Thanks for your replies, I guess I was so worried about even getting a car on credit (I've not got a good credit rating yet) that I was relieved to find a company that would finance a car for me. The car is a reasonable condition 54 reg Vauxhall Zafira "Life" (base model) with 67K on purchase (£2995).

Dealer just sold me the car, all the finance, gap and breakdown cover was arranged by First Response Finance.

My take on GAP is that the car cost £3000 from a dealer that car is worth only £2000 to an insurance assessor. So if I total the car and my comprehensive insurance pays me the cars value I still owe £1000. To be honest I don't have £1000 so I thought it necessary. Same with the breakdown cover as I'm !!!!!!ed if something expensive goes wrong (like the engine management which is quite common I understand).

The car was £2995 + a document fee of £250, GAP was £395 and the Vehicle Warranty was £292. On top of these was a credit charge. For the car this was £1785 and for the insurances £330. So I pay back a total of For both car and insurances I pay £153 a month for three years plus a £228 option to purchase fee. So my £3000 car will cost me £5585 to buy over three years!