Returning a car on finance.

MR-B_3

Hi everyone.

I recently got a car on finance through startline on a 4 year term, however just today iv got a new job with company van and personal use so dont need 2 cars (my partner also owns vehicle) so i was wondering if i can return the vehicle end the contract early,terminate the agreement early or what my options are if any.

Thanks everyone.
MR-B

bearcat16

I think it depends on the exact type of finance agreement, but tread carefully. Depending on what you say to the finance company they interpret your situation incorrectly, and think you are asking them to repossess the car. They will probably do that if you ask them to, but that may register as a default on your credit file, and this situation is not a 'can't afford to pay' one.

EDIT: I found this on another thread re HP:
"If the agreement is HP (please double check your contract) then you have the right to Voluntarily Terminate the agreement at any point. You will be liable for 50% of the total amount repayable, minus any money paid to date plus any excessive wear and tear. This is where the engine may be an issue.

You need to send a termination letter, recorded delivery, before you return the car. You can return it even if you haven't paid 50% but the 'shortfall' would be due immediately and if you can't afford to pay it there and then, it may have an impact on your credit file."

You can, of course, end any finance agreement at any time by simply paying off any money owing. So say the balance you have on the agreement is £5,000, you simply pay that and then the agreement is ended and you can do what you want with the car.

Therefore probably the simplest way would be to request a settlement figure (which is just the balance currently owing), then pay it off and end the agreement. Then sell the car yourself. You may well find that the sale value of the car is not quite enough to cover the settlement amount - unfortunately you just have to eat this shortfall. (Try a site like webuyanycar.com to see how much the car is worth, though you'll probably get more if you sell it privately. More hassle though)

If you don't have the money available to pay the settlement amount then you could use an overdraft, 0% credit card(s) or even an unsecured loan. Just be sure to pay it off with the proceeds of the car sale.

sourcrates

Hi,


How recently did you take out the finance, are you still within the cooling off period ?
If not, then you should check your agreement carefully, it will state on it exactly what you will be liable for if you return the vehicle early.


Be warned, you may have to pay a substantial amount for ending the agreement so early, there may also be a separate "early termination charge".


Check your paperwork before you do anything.

National_Debtline

Hi Mr-B


If this car agreement is indeed hire purchase (HP), then you may find our fact sheet of use:


https://www.nationaldebtline.org/EW/factsheets/Pages/16%20EW%20Hire%20purchase%20and%20conditional%20sale/Default.aspx


If it is something else altogether ("finance" is a very general term and can mean all sorts of things) you're best off coming back for further advice and/or contacting one of the usual free services.


Dennis
@natdebtline

poppasmurf_bewdley

Would you not be better selling off your partner's car, as presumably that hasn't been bought so recently?

Returning a car you have only just got could prove extremely expensive for you.