Early Termination of Car Finance

debbie_debt

Can anyone please help me interpret the wording on my car finance agreement regarding early termination fees please??

I'm on PCP finance and basically our circumstances have changed, meaning I'd like to hand it back. The wording says we're liable for the excess mileage charges and any arrears due (which I understand) plus:

"the amount (if any) by which one-half of the total amount payable exceeds the aggregate of the advance payment and repayments you have paid"

Eh???? Does this basically mean that I need to have paid half the finance off (and if not, pay the value of half)? Or have I misinterpreted it completely?

Thanks in advance!

Debbie

Amy.B_3

You'd need to view your whole agreement and not two lines, every agreement is different based on what you've signed.

But usually if you're leave the agreement early or not following the agreement, there's always going to be some form of a penalty charge.

debbie_debt

Thanks for your reply Amy. I've read through the rest of the contract, and this is the only section relevant to early termination. I knew there would be some form of charge, but it'd be nice if they worded it in a way that's remotely understandable!! haha

Amy.B_3

debbie_debt wrote: »

Thanks for your reply Amy. I've read through the rest of the contract, and this is the only section relevant to early termination. I knew there would be some form of charge, but it'd be nice if they worded it in a way that's remotely understandable!! haha

Yeah sorry I couldn't be of more help, it's just no PCP agreements are ever the same so you can't really judge them as a whole

Usually always the case haha hopefully it won't be too expensive

molerat

Early Termination and Voluntary Termination are 2 entirely different things.

With VT you can hand the car back at any time and are responsible for payments up to half the full agreement, the amount should be stated on the agreement. If past that figure there is nothing more to pay.

You should not be responsible for any extra charges providing the car is in "reasonable" condition. They may try to add contractual mileage charges but there is an argument on the legality of these, most falling in the not allowed camp, but they have not been challenged in court. Some additional insurances etc that may be paid on top of your basic payment may be chargeable to end of year or term.

A good place to look http://legalbeagles.info/forums/showthread.php?34548-Voluntary-Termination-of-a-Hire-purchase-or-conditional-loan-under-the-CCA-1974

With ET you hand the car back, they sell it at auction, take what it sold for off the total remaining then send the bill for the rest. Make sure you don't go this route.

debbie_debt

molerat wrote: »

E

With VT you can hand the car back at any time and are responsible for payments up to half the full agreement, the amount should be stated on the agreement. If past that figure there is nothing more to pay.

Thanks molerat. I think that's what my agreement is saying, in a very roundabout kind of way. Unfortunately, there isn't a figure stated though. My agreement is for £247 a month for 4 years (£300 deposit) with an optional final payment of £6900. When you say half of the agreement, would that be 2 years of £247 a month, hence £5928, or half of the 2 years of £247 a month plus half of the optional final payment, hence £9378? The contracts aren't specific on this at all.

Cheers

Debbie

molerat

Yes, half the total agreement price including the final payment, that number will be on the paperwork. The deposit is included in the total paid so far.

verityboo

Paperwork should show a total cost = Deposit (£300) + monthly payments (48 x £247 = 11856) + final payment (£6900) = approx £19056 (+ there might be a few other small charges)

Half way would be after you have paid £9528, That means taking the deposit off, you will have paid half after approx 38 months

As above, if you decide to VT, find a sample letter on line to inform the finance company and down sign anything else

neilmcl

I posted this link on another thread, might be of use.

https://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp

debbie_debt

So I can only VT ten months before the end of the 48 month agreement? :eek:

Thanks so much for all your help guys, despite it not being what I wanted to hear!! I was hoping it would be half way through the term :mad:

motorguy

debbie_debt wrote: »

So I can only VT ten months before the end of the 48 month agreement? :eek:

Thanks so much for all your help guys, despite it not being what I wanted to hear!! I was hoping it would be half way through the term :mad:

Sounds about right.