Hire Purchase company gone into Administration: Advice??

leonjah90

Hello,

In April 2014 I took out a hire purchase agreement with a company called 'Credit4Cars Ltd' who offer vehicle finance for those who would struggle to get finance elsewhere by charging a 'higher' premium. I got a 2007 Volkswagen Golf which was about £7,000 from the dealer however I would have to pay Credit4Cars Ltd £327 per month for 4 years to finance it (Oh, and it has a tracking immobiliser fitted meaning my car can be switched off remotely should I not keep up my payments).

Obviously, I'm fully aware I'm paying a ridiculous amount of money however at the time I was sold on the car and didn't really have other options to shop around with.

I still have the car, still maintained payments (also had the odd late payments and struggles) however I have seen/heard they have gone into administration as from December 2015. Usually a missed payment is quickly followed up with an 'your account is in arrears' email, closely followed up with the vehicle being switched off however from December, 3 weeks had passed and no contact from them and still had use of the car.

Eventually I received an email (not the normal automated email) informing me to sort out the arrears which I did. I've tried to read up about what is happening to the company and more importantly.. Where do I stand?

I've seen a few comments from other people on other forums, some people have said they have not paid them and nothing has happened, a number of people have also claimed to have had their payments lowered (which would be handy for me). From a legal point of view however, I want to know what I can expect from this? The company or administrators of the company have not sent me anything to explain the situation so I'm not sure what to do.

My current situation = Low income, temporary job and struggling to maintain the high payments. As I'm almost half way through the agreement, I could technically hand the car back under the 'halves and thirds' rule however I do like the car and I would have paid the value of the car off at this point (based on the cost of the vehicle pre-finance). So, I have a couple of questions...

Q1: Would/could the administrators allow me to end my agreement and keep the car based on the fact I've paid more to the firm than they would have paid acquiring the vehicle to finance for me?

If Not...

Q2: Would it be possible to have the monthly payments lowered? Obviously I have a financial contract and made an agreement to pay a monthly premium however does the fact the company is in administration throw out that agreement?

And if so..

Q3: As the company is no longer operating (but is under administrators), do I have a right to cancel my agreement early without penalty?

My thinking is, the contract made between Credit4Cars and myself would have a number of terms which may no longer be honoured such as warranties etc, therefore I feel this would be a breach of contract by them and surely an altered contract without notice or agreement by myself means I shouldn't be liable to continue it.

Basically, what options have I got and can I benefit in any way from this?

molerat

leonjah90 wrote: »

Hello,

In April 2014 I took out a hire purchase agreement with a company called 'Credit4Cars Ltd' who offer vehicle finance for those who would struggle to get finance elsewhere by charging a 'higher' premium. I got a 2007 Volkswagen Golf which was about £7,000 from the dealer however I would have to pay Credit4Cars Ltd £327 per month for 4 years to finance it (Oh, and it has a tracking immobiliser fitted meaning my car can be switched off remotely should I not keep up my payments).

Obviously, I'm fully aware I'm paying a ridiculous amount of money however at the time I was sold on the car and didn't really have other options to shop around with.

I still have the car, still maintained payments (also had the odd late payments and struggles) however I have seen/heard they have gone into administration as from December 2015. Usually a missed payment is quickly followed up with an 'your account is in arrears' email, closely followed up with the vehicle being switched off however from December, 3 weeks had passed and no contact from them and still had use of the car.

Eventually I received an email (not the normal automated email) informing me to sort out the arrears which I did. I've tried to read up about what is happening to the company and more importantly.. Where do I stand?

I've seen a few comments from other people on other forums, some people have said they have not paid them and nothing has happened, a number of people have also claimed to have had their payments lowered (which would be handy for me). From a legal point of view however, I want to know what I can expect from this? The company or administrators of the company have not sent me anything to explain the situation so I'm not sure what to do.

My current situation = Low income, temporary job and struggling to maintain the high payments. As I'm almost half way through the agreement, I could technically hand the car back under the 'halves and thirds' rule however I do like the car and I would have paid the value of the car off at this point (based on the cost of the vehicle pre-finance). So, I have a couple of questions...

Q1: Would/could the administrators allow me to end my agreement and keep the car based on the fact I've paid more to the firm than they would have paid acquiring the vehicle to finance for me? No, the administrators are handling the finances and will probably be selling the finance book on to another lender. You have an agreement, stick to it or when they get their act back together you may well find the car switched off.

If Not...

Q2: Would it be possible to have the monthly payments lowered? Obviously I have a financial contract and made an agreement to pay a monthly premium however does the fact the company is in administration throw out that agreement? No, the agreement is still valid. The administrators are now the ones you owe the money to.

And if so..

Q3: As the company is no longer operating (but is under administrators), do I have a right to cancel my agreement early without penalty? The agreement is still valid. You have the same rights to cancel as you always have had with an HP agreement.

My thinking is, the contract made between Credit4Cars and myself would have a number of terms which may no longer be honoured such as warranties etc, therefore I feel this would be a breach of contract by them and surely an altered contract without notice or agreement by myself means I shouldn't be liable to continue it.

Basically, what options have I got and can I benefit in any way from this?

Their will no doubt be a term in the agreement mentioning "heirs and successors" meaning your agreement can be assigned to someone else. You still owe the money, the finance is not void or cancelled. If you default it will do further damage to your credit history.

Gaz83

Your contract will include a term saying that the debt can be sold on or transferred between companies.

leonjah90

Another thing to add to my questions is with regards to my credit file, I have checked with equifax and it says that my loan with credit4cars is 'closed' rather than active and it's not been active since October 2015..

Bit confusing as the agreement has still continued, any ideas?

DCFC79

leonjah90 wrote: »

Another thing to add to my questions is with regards to my credit file, I have checked with equifax and it says that my loan with credit4cars is 'closed' rather than active and it's not been active since October 2015..

Bit confusing as the agreement has still continued, any ideas?

According to companies house there are 2 credit 4 cars, 1 in administration and another with 2015 in brackets and its also in Essex.

marcarm

I know this is not relevant, but nearly £16k on a Golf that was 7 years old when you bought it!

I'm just shocked anyone would think that was a good idea, you could have bought a car with just a few months payments and not have this round your neck for this amount of time.

Of course this does not answer your question and I do hope someone comes along with help for your queries.

leonjah90

I know it's expensive however when someone offers you a car you've always wanted, to drive away the same day after so many credit refusals and knock backs it's quite easy to fall for it, it's a great car and a lot of people have said Credit4cars supply dodgy cars so can't knock them for that. Just surprising how a company that's making more than double on their cars can go into administration. My repayments alone could pay off their staff, overheads and bills

xHannahx

DCFC79 wrote: »

According to companies house there are 2 credit 4 cars, 1 in administration and another with 2015 in brackets and its also in Essex.

Same director who also has several other companies offering expensive credit.

https://beta.companieshouse.gov.uk/officers/GgaLADKj1IZeNdLJtUEP-FCvOuE/appointments

marcarm

leonjah90 wrote: »

I know it's expensive however when someone offers you a car you've always wanted, to drive away the same day after so many credit refusals and knock backs it's quite easy to fall for it, it's a great car and a lot of people have said Credit4cars supply dodgy cars so can't knock them for that. Just surprising how a company that's making more than double on their cars can go into administration. My repayments alone could pay off their staff, overheads and bills

That is true, but also bear in mind that these places are offering credit to people with a less than stellar credit history, hence why they are so expensive. These people have a habit of not paying their bills, and when the novelty of a new car wears off and they are still paying £xxx per month for a car that's worth a fraction of that, they realise what they've done and stop paying their bills again.

Don't forget that for every customer like you that makes their payments, they must have tens or hundreds of other customers that don't.

Craig79

Ive also got a car financed by credit for cars . I had a 2010 megane for 5800 at 260 a month in april last year . I never missed a payment untill march when i found out there in administration . Then i emailed them and got my payments dropped to £50 a month, i said i cant afford it and about the problems with the car (fixed now) and they accepted £50 a month . Tbh if they hadnt dropped the payments i would of just said come and get the car

glennstar

Slightly off topic (encouraged by xHannahx) but our friend John Alfred Webster has had quite a chequered past and is probably one to watch.

More on topic...

leonjah90 wrote: »

Just surprising how a company that's making more than double on their cars can go into administration. My repayments alone could pay off their staff, overheads and bills

I think you will find that their Interim Permission ran out and they either didn't apply for Full Permission or they applied and were not granted. Either way you probably have to ask yourself why. Reasons might include (but are not limited to);

1. the owners are not Fit and Proper Persons as specified by the FCA,
2. the companies historical business practices would not have borne scrutiny by the FCA so the owners didn't apply for Full Permission,
3. the companies business plan was unsustainable.

The last point (3) is of interest as this has been the undoing of many Payday Lenders who have relied on aggressive CPA and roll overs to make a profit. As soon as the 0.8% cap, no roll overs, limited CPAs and a cooling off period was mandated they couldn't make their business models work and had to close. In your case (although it's secured finance and rules related to the cost thereof is different from payday) it may well be that the FCA is not very keen the them charging the amounts they are.

Finally, and I'm not a Solicitor, but I was under the impression that it was against the law to hold or otherwise restrict the use of property (secured or otherwise) in lieu of payment... so that immobiliser thingamabob might not be legitimate.