HELP! - Voluntary Termination of Car Finance

steve.b83

Hi all,
My first time posting here and was wondering if anyone had a bit of advice. I recently went to buy a new car, as I still owed a bit of money on my current car I decided to trade mine in against the cost of the new car (the car dealer settling the finance). The dealership told me I would be better simply doing a voluntary termination and giving the car back to the finance company and they wrote me out a letter to do so.

I sent this letter to my finance company who agreed that I could terminate (I had to pay £266 there and then to pay the rest of the GAP insurance I owed) and that I would not have to pay anything else as I had the car 3 years out of the 4 year agreement. They told me to just take the car to a dealership they use about 10 miles away and give them the keys and log book.

I took the car to them and gave them the log book, they weren't very happy as they said the finance company I use aren't very nice (they used other words for this) they gave me the log book back and said I needed to send it off and that was it.

3-4 weeks later I received a letter to say they have inspected the car and they don't think it is in good enough condition for a car of its age. I told them (which I told them before I terminated) that there was 1 scratch on the rear bumper which was there before I got the car, other than that there was nothing wrong with the car. They informed me there was other scratches and chips in the windscreen (which again were there before I got the car, I did try to have these repaired when I got it but the windscreen company said they couldn't repair them as they look like they had been repaired previously and in any case they wouldn't crack due to the size and shape of them). They said I had to pay them £1539 for the cost of the "damage", again I told them the scratch and windscreen chips were there before I got the car and anything else would have happened after I dropped the car off at their dealer.
They said I need to prove that the car I bought 3 years ago had a scratch on its bumper and chipped windscreen, when I asked how I could do this they said speak to the dealer I bought it from, like they would still know about a car they sold 3 years ago, let alone have photos of it. They also told me I should have had an independent report done on the car before I took it back to them.

I then said if they send me the car back I will either sell the car myself or repair it myself, they said they cant as it has already been sold. My argument was then why was I not told about the cost of repairs before they sold the car?!?! I did not have an independent report done as the car was in as good, if not better condition than when I bought it.

After arguing with the finance company they said they will give me 30 days grace to seek legal advise and then they want paying.

Does anyone have any advice? I cant be expected to prove a scratch was there since before I got the car can I? Plus, they don't even have the car anymore so it couldn't have been that bad if they managed to sell it already. Should they have really sold the car before giving me the results of the survey?:mad:

Thanks in advance,
Steve

Bmwm3gt2

I'm sure someone will have the definite answer but I thought if you purchased a car on HP in England you could just hand it back to the finance company if you had paid atleast 2/3 of the balance?

steve.b83

Yeah which I have done, as it was a 4 year term and I paid for 3 years. But they are saying I need to pay for scratches to the car that were there when I bought the car, unless I can prove they happened before I bought the car, even though they have already sold the car on.

Nearlyold

You have to have paid 50% of the total amount payable for a voluntary termination and the finance company are allowed to charge if the vehicle condition is worse than would be expected for normal wear and tear.
£1539 sounds a lot. Did you take any photographs before returning the vehicle? Have the finance company provided any breakdown of the costs and photos of the allegedly damaged areas?

You need to tell the finance company you want to make a formal complaint if you do not agree the charges are justified. If you don't agree to their response to your complaint you can then escalate your complaint to the Financial Ombudsman Service - Google them if you are not familiar with their role.

National_Debtline

Hi Steve


I'm no car expert but £1539 seems like an awfully large bill for what sound like cosmetic defects rather than anything structural. Have they provided you with a copy of said inspection and was it done by an independent 3rd party?


I would start by asking what they actually sold the car for. Logically, it would have fetched approximately £1539 less than if it had been in "normal" condition". If the car sold for market value, they should be able to show they have spent that amount sprucing up the vehicle prior to its sale.


Ultimately this may boil down to a battle of wills between you and the finance company. If you can't reach an agreement and they are threatening to sue, you may wish to seek legal advice on your position.


Dennis
@natdebtline

National_Debtline

On a separate note, just to clarify an issue that seems to cause some confusion:


One can voluntarily terminate a hire purchase agreement at any stage of the term - it is not necessary to wait until 50% has been repaid before exercising this right. If one terminates any earlier than that, the lender can still seek the difference between the sums paid to date and that 50% figure. Not to mention costs for any "unreasonable" wear and tear, as Nearlyold points out.


Dennis
@natdebtline

steve.b83

I paid between 75 and 80% of the total finance over the years, so I was well over the 50%. I got a settlement figure of around £2000 a few months ago (just before I terminated). They told me the car was sold for around £1600. They said the £1500 is because the scratches on the car do not reflect the cars age. Bearing in mind this was a 2007 (56 reg) jaguar x type estate (with 140k miles on the clock), they said it had a scratch on the bumper (which was there when I got the car) and a couple of other scratches, as well as a few minor chips on the windscreen.

The finance company said they will send me a copy of the survey done to the car (only after I complained). Unfortunately I don't have any pictures of the car when I took it back. The only thing they have sent me is a letter saying how much they want me to pay. No idea who did the survey. Once I get the report I will let you guys know.

If they sold the car for £1600 ish and said I need to pay £1500 that would make the car £3100, looking on autotrader that is a lot for a car of that age & mileage

steve.b83

Just had the condition report back, again nothing with any signatures or anything, just a list of "damage" and a few small black and white pictures. any suggestions?

Ive tried to post pictures of the "report" but it says I cant as im a new user