Bought a caravan, now wish I hadn't - help with HP

GazNicki

I bought a caravan in August 2016, and during the process was somewhat misled with the purchase and how beneficial it could be. I can afford the repayments, but unfortunately the information we was given on purchase wasn't 100% accurate and our homework wasn't as thorough as it could be, so now we are in a position where we cannot afford the site fees for the caravan and are now looking at the caravan being evicted off the park.

This however leaves us in a bad spot as there is nowhere else for thee caravan to go, and moving it off site is expensive. The whole game is wrapped right up.

I purchased the caravan for £11995.
I paid a cash deposit of £5691.
I took out a HP agreement on the remaining balance of £6304.

Looking at my HP agreement for options, there is an option to "Terminate the HP Agreement" which for us would probably be the best solution.

The text reads as follows:

TERMINATION: YOUR RIGHTS
You have a right to end this agreement. To do so, your should write to the person you make payments to. They will then be entitled to the return of the goods and to half the total amount payable under this agreement, that is £6844.14. If you have already paid at least this amount plus any overdue installments and have taken reasonable care of the goods, you will not have to pay any more.

Reading this, the amount payable is exactly 50% of the total amount of the van. The cost of the HP, including the interest at 12.9% is £7997.28.

£7997.28 + the cash deposit of £5691.00 = £13688.28

50% of £13688.28 = £6844.14

Reading this, then the agreement includes the cash deposit. Therefore, in order to make the total of £6844.14 I would need to make 7 monthly payments on top of the deposit to have the ability to terminate.

However, speaking to the HP company, it appears that the total that should be in the Termination section is incorrect. I don't really want my credit report to be destroyed over this mistake as I am looking to be buying a house in the next 3 years. Please can you help?

Where do we stand with this HP agreement, given that it is wrong?
Does anyone have any advice on what we can do with our situation?

[Deleted User]

Once you've paid half - 6.8k - you can VT. It won't have a negative impact on your credit files.

[Deleted User]

most site owners will paint a rosy picture its up to you to delve deeper.

GazNicki

My main issue is that the balance for the VT is wrong.

The balance for VT should be 50% of the amount on finance, not the total amount of the entire purchase. When I phoned the creditor, they confirmed that it was wrong.

Basically, the amount to VT should be 50% of the finance, which including interest is 50% of £7997.28 = £3998.64. However, they have taken the full balance including the cash deposit into consideration.

My question is, where do I stand now.

If the entire balance, including the cash deposit is taken into consideration, then I have paid more than 50% of that agreement as my cash deposit and the 7 payments made to date exceeds the 50% mark.

If they do not take the cash deposit into consideration, then there is an outstanding balance, but the agreement I have in front of me is wrong.

My issue is that if the latter is applicable, the caravan will need to be put somewhere until the 50% is paid unless the creditor will take the van off me and agree for me to continue making payments until the 50% is reached (but that doesn't change the fact that the agreement is wrong).

Venison - thank you for this valuable input. I am more than aware of this now.

Nebulous2

Deal with them in writing. Don't speak to them.

Write to the finance provider and tell them you have made the 50% payment as listed in the agreement and are VTing the agreement. Give them a date for handover, clear the van of all your stuff before then and stop using it.

If they think the amount in your agreement is wrong they should put that in writing, including the amount they think it is and how it was calculated.

Beware of them sending you agreements to sign, which may sign away some of your rights by agreeing to pay other stuff. If you are asked to agree to anything further take advice before you do.

Your ability to terminate will be with the finance company for the purchase of the caravan. You will still have to deal with what is likely to be a separate agreement with the site owner about fees. They may expect a year's fees in advance for instance and give limited discount for stopping midway through. You should probably notify them that you no longer own the caravan as of the VT date and they should refer to the finance company for fees from then. It would be good to do that before the start of the next charging period.

It's a big loss for you, but may indeed be the best way out. A static caravan without a pitch has very limited value and brings all sorts of issues for transport and storage.

Edit - my post overlapped with yours. Read up on the rules for VTing. They also have a sample letter to send.

robber2

That seems like a huge loss you are facing. Is it worth looking into selling the caravan on, either to a 3rd party or back to the site owner?

Rob

molerat

IMO they have 2 options
a) the agreement is correct and you walk away having reached the VT point.
b) the agreement is wrong and is therefore void. They take the van off you and give you back all you have paid so far including the deposit.

MataNui

One of the problems with caravan sales is they like to bundle the first years site fees in with the sale. This means you just see one finance payment and think 'Thats OK, I can afford that'. What people forget though is the next year they will need to find anywhere from 3 to 7k to pay the site fees on top of the finance payments. Thats a lot of extra cash per month to find (about £600). Just paying for the site fees can be a bigger monthly payment that the van or most peoples mortgage.

Also people seem to forget that there is nothing that depreciates faster than a static caravan. By the time you factor in the dealers initial markup and the fact you may only be able to sell back to them saying its a mugs game wouldnt even come close.

I used to work for a company that sold services to caravan parks. Honestly, these people make used car salesmen look like charity workers.

mrmagooooooo

Cant you sell the Caravan? You would easily be able to pay off the remaining finance and get some cash back?

As molerat has pointed out. If the credit agreement is wrong it is indeed void as far as i am aware.

Personally id try and sell it.

GazNicki

molerat wrote: »

IMO they have 2 options
a) the agreement is correct and you walk away having reached the VT point.
b) the agreement is wrong and is therefore void. They take the van off you and give you back all you have paid so far including the deposit.

This is my thinking to. How would you go about tackling this issue?

Nearlyold

What EXACTLY did the lender say about the VT figure in the Credit Agreement. Based on your figures for the loan it appears to be spot on correct. Your phrase "it appears that the total that should be in the Termination section is incorrect" doesn't actually make sense, why would they tell you that a figure that they should have put in but didn't would have been incorrect? I assume you mean they told you the figure that is in the agreement is incorrect? Have they confirmed this in writing.