Voluntary Termination - HP

Mr.J_2

Hi all,

Recently I put out a thread about my options on handing back our car due to our financial situation changing and needing to hand the car back - I am new to this site and have started a new thread as Im not sure if my old one has gone stale

I am currently 16 months in to a 60 month HP agreement and I was wondering if I could Voluntary Terminate the contract?

Looking at the agreement, it is a HP agreement which means the funds are secured on the car - I was in BMW recently and we got a settlement figure of £20k (from blackhorse), BMW have offered me £18500 on trade in IF I was to buy another car through them. Honestly, I would just like to get rid of the agreement on a whole and not take out another.

Am I able to Voluntary Terminate the agreement? What would happen? Would they send the car to auction (car is in A1 condition) and then just ask me for what is left of the early settlement figure? Could I pay this over say 3 months. As it stands, If I was to get £18500 for the car, it would only have £1500 outstanding on the finance settlement figure?!

Any advice would be BRILLIANT..

Thank you

[Deleted User]

AFAIK you have to have paid 50% of all payments due before you can VT

Mr.J_2

Yes, I thought that, that may have been the case, but I have heard different and have been told that I may VT at any time under some act? Is this right does anyone know?

PeacefulWaters

Mr.J wrote: »

Yes, I thought that, that may have been the case, but I have heard different and have been told that I may VT at any time under some act? Is this right does anyone know?

Not that I'm aware of.

antrobus

Mr.J wrote: »

Yes, I thought that, that may have been the case, but I have heard different and have been told that I may VT at any time under some act? Is this right does anyone know?

Correct.

At any time before the final payment by the debtor under a regulated hire-purchase or regulated conditional sale agreement falls due, the debtor shall be entitled to terminate the agreement by giving notice to any person entitled or authorised to receive the sums payable under the agreement. s99 (1) CCA 1974

However,

Where a regulated hire-purchase or regulated conditional sale agreement is terminated under section 99 the debtor shall be liable, unless the agreement provides for a smaller payment, or does not provide for any payment, to pay to the creditor the amount (if any) by which one-half of the total price exceeds the aggregate of the sums paid and the sums due in respect of the total price immediately before the termination. s100(1) CCA 1974

So basically, the law states that you can indeed VT at any time, but that your maximum liability would be half the total sum due under the HP agreement. As a result, people tend not to VT a HP agreement until they have paid the 50%.

CLAPTON

Mr.J wrote: »

Yes, I thought that, that may have been the case, but I have heard different and have been told that I may VT at any time under some act? Is this right does anyone know?

you can VT at any time as long as you pay 50% of the finance

you are unlikely to get 18,500 at auction

molerat

What is the 50% figure as shown on your agreement and how much have you paid so far ?

You have 3 options
1) Settle the agreement - pay £20K and keep the car. (or sell / part ex etc)
2) Early termination - hand the car back, it goes to auction and you are liable for the difference between auction price and £20K + costs.
3) Voluntary termination - you pay the difference between the 50% mark and what you have paid so far.

Mr.J_2

I believe the 50% figure is around 15k, so far we have paid £8496.00 I think.. So a long way off. Will that mean I am liable for £6504.00? Can I arrange installments on this or..?

Would it not be easier to try and get 18k for the car and then pay the 2k difference between this and the 20k settlement figure?

Could I try and sell it? I didnt think I was allowed because it is a HP agreement and I do not own the goods?

Thank you for all your help

molerat

All sums will be immediately due. If you sell, even to a dealer, the charge will not be released until the finance is cleared making the car unsellable. The lender may be able to finance the difference by way of a loan. If you are in true financial hardship they may agree this.

Brock_and_Roll

Almost certainly the least painful option is likely to be to plead your situation to BMW, explaining that much as you love their cars you can't afford another one AT THE MOMENT and try and get them to offer you on or near the £18.5k without taking another car. Any other option such as allowing them to take it to auction is likely to be much more expensive.

antrobus

Mr.J wrote: »

I believe the 50% figure is around 15k, so far we have paid £8496.00 I think.. So a long way off. Will that mean I am liable for £6504.00?

That's the maximum you would be liable for. It could be less, depending on what the car is sold for.

Mr.J wrote: »

...Can I arrange installments on this or..?

You are already paying installments. You might as well have use of the car in the meantime.