Voluntary termination and charges

gazfocus

I have a car on hire purchase which is on a 4 year agreement. I am 2 and a half years into the agreement and want to hand the car back to the finance company.

I rang them on Friday and discussed this with them and informed them that there's a dent to the bonnet and said I'd consider getting it repaired, but in reality I just want them to collect the car as soon as possible.

They advised me that they will sell the car at auction and will charge me the difference between what they actually get (due to the damage) and what they should get if the damage wasn't there.

My question is, how will they work this out and how can I be sure they won't artificially inflate the figures? My understanding was that they take the car back and I don't have to pay anything more, but can understand a penalty for a dented bonnet, but just don't want to get ripped off.

Originally, for an aftermarket bonnet, sprayed and fitted, I was quoted £450 so wondering if that's the cheaper option.

ARandomMiser

I would be inclined to get it fixed before handing it back - you care about how much it will cost, they don't.

gazfocus

I should have mentioned we're talking about a car that's worth about £1700 with £2500 finance left on it.

forgotmyname

Pick a random number and double it and send you the bill and see if you payup?

Although you say your 2.5 years into the agreement, have you actually paid more than 50% of the full amount?

Small dink maybe a localised repair £80 - £200. Anything bigger or more than one mark and it may need a respray on the whole bonnet, You could be looking at £200 - £500 then.

marty2be2000

At 2 and a half years into a 4 year agreement I don't think you have reached the 50% mark yet where you can VT.

Remember its not 50% of the payments, but 50% of the total finance amount. At the start of the agreement you pay more interest, which tails off to insignificant amounts of interest towards the end of the agreement. So to start with your payments are mostly interest with a small amount of capital thus the outstanding balance falls much more slowly at the start.

motorguy

gazfocus wrote: »

I should have mentioned we're talking about a car that's worth about £1700 with £2500 finance left on it.

You will completely stiff your finance rating if you hand the car back and they have to sell it at auction and pursue you for the difference.

Its also the most expensive way to get out of this, bearing in mind the auction price will be the minimum possible trade value.

maxmycardagain

Im past halfway on a OTR price of £20K (ins all charges/interest/DVLA) etc, at 2 years through a 5 year finance, partly cos i paid the VAT upfront as deposit (and reclaimed it), when i asked about a handback i was told "so long as youve looked after it"...............its done 60K but ive looked after it....lol

maxmycardagain

motorguy wrote: »

You will completely stiff your finance rating if you hand the car back and they have to sell it at auction and pursue you for the difference.

Its also the most expensive way to get out of this, bearing in mind the auction price will be the minimum possible trade value.

I owe £10K balance and its worth £10K if i found a buyer, and thats a big if, and it wouldnt be HPi clear so any buyer would have to be verytrusting

MobileSaver

ARandomMiser wrote: »

I would be inclined to get it fixed before handing it back - you care about how much it will cost, they don't.

+1

Your only obligation when VTing an agreement is to take reasonable care of the car; unfortunately a dent in the bonnet would probably not be considered reasonable and so you open yourself up to a whole world of pain and charges/fees that will be difficult to defend.

Get the bonnet fixed yourself and then the entire weight of UK law is behind you and you won't have to pay a penny more than the 50% of the agreement you have already paid.

gazfocus

Thanks all. I have paid a fair bit more than 50% of the total agreement amount. The original total was just over £7,000 and I now owe £2,500 so have paid £4,500 off so far. I have considered paying the finance off and selling privately once repaired but I'm not convinced I'd recoup my money. I do have a quote for a new bonnet and spray and it's gonna cost £400 (with a third party bonnet)

forgotmyname

You paid the VAT upfront and reclaimed it? business purchase? Can you VT it?

Can a business user VT?