New HP - can we back out?

moneypit2014 · 24 March 2014 at 2:46PM

Hi, My husband bought a new car last week using a HP agreement. Since then I have looked at our finances and we are massively overstretched. We both were unaware that things are as bad as what they are and we are considering a DMP. The payment for the new car is significant - £220 a month for 5 years. This is something we simply cannot afford. My question is as it's just been a little over a week since my husband signed the agreement can we just back out and hand the car back?

heartbreak_star · 24 March 2014 at 2:50PM

Check the paperwork - that should have any cooling-off period specified.

HBS x

~Brock~ · 24 March 2014 at 2:51PM

In a word , No.

You can back out of the HP agreement, but you cannot back out of the purchase of the vehicle, which means you will need to repay the amount you borrowed using other means if you to back out of it.

The dealer has, I assume, done nothing wrong and therefore has no obligation to take the vehicle back.

He has been paid by the finance company and that is the end of it as far as he is concerned, plus you have probably already signed an order form which protects the dealer against losses caused by this type of scenario.

It was not a distance contract so there is no automatic right of cancellation.

Unless you can appeal to his goodwill in agreeing to take the vehicle back there isn't much you can do.

NVRAM · 24 March 2014 at 4:42PM

Surely this should have been done BEFORE getting a new car

As it's only been a week you may get somewhere with goodwill, but with surch a large purchase I'd be doubtfull.

moneypit2014 · 24 March 2014 at 5:43PM

NVRAM wrote: »

Surely this should have been done BEFORE getting a new car
As it's only been a week you may get somewhere with goodwill, but with surch a large purchase I'd be doubtfull.

Of course! But we all make mistakes. I can here for advice on what to do, not to be told of mistakes already made.

poppasmurf_bewdley · 24 March 2014 at 5:44PM

If you signed up for the HP at the dealer's showroom, then you don't have the right to cancel. In addition, the dealer is under no obligation to take the car back. Both the dealer and the finance company have fulfilled their parts in the deal.

If you are now, after a week, realising you can't afford the car, you have two alternatives:

1). Ask the dealer to take the car back, but even if he agrees there will be a price to pay. Or
2). Put the car up for sale, but this will almost certainly result in selling at less than you paid for the car, and maybe not enough to pay off the finance company.

Did you pay a deposit?

moneypit2014 · 24 March 2014 at 5:54PM

Yes we paid a small deposit.

poppasmurf_bewdley · 24 March 2014 at 5:58PM

moneypit2014 wrote: »

Yes we paid a small deposit.

Oh, dear. That means you have little or no equity in the car.

How much was the car? How much deposit did you make? What is the price of your car compared to similar ones on Autotrader?

That will tell you what sort of a gap you are looking at between what the car is worth and what you owe the finance company.

AMILLIONDOLLARS · 24 March 2014 at 6:13PM

Did you pass the credit check? Have you been given a date for collection. If you are over stretched maybe this will show up on your credit report and the deal will be cancelled by the dealership.

The worse to happen, in this scenario is that you lose your deposit.

Good luck

AMD

molerat · 24 March 2014 at 6:27PM

You can terminate the HP agreement and hand the car back at any time ......... but you will have to pay the amount stated on the agreement which will be 50% of the total price.

SavingPennies_2 · 25 March 2014 at 10:01AM

Id speak to the dealer they may let you return the car but forfeit the deposit, you say its small, Im assuming a few hundred pounds, so may be worth taking the hit now rather than paying so much more in the long run. But go in and speak to them now, the sooner you do the more chance you have of them taking it back, good luck.