MotoNovo Denying Finance to Customers who VT

Garry7

Hello,

I recently made a tentative enquiry to MotoNovo about voluntarily terminating a hire-purchase agreement on my car.

I realise that all finance companies will add a note to one's credit file whenever they opt to voluntarily terminate an agreement, however I was surprised to read, in the copy-and-paste response I received, that MotoNovo will refuse any future financing.

Here's the quote from their e-mail:

If you wish to go ahead with the above, we require a signed letter from yourself. This will be accepted via post, fax or email. Please find details below. This will be noted on your credit file as a VT “voluntary termination”, you will no longer be eligible for future finance with MotoNovo.

I don't like strong-arm tactics, though I suppose MotoNovo have the legal right to deny financing to whomever they choose. I hadn't seen this policy come out in black-and-white before, so thought I'd put it here for the benefit of any potential future MotoNovo customers!

fwor

Garry7 wrote: »

Hello,

I recently made a tentative enquiry to MotoNovo about voluntarily terminating a hire-purchase agreement on my car.

I realise that all finance companies will add a note to one's credit file whenever they opt to voluntarily terminate an agreement, however I was surprised to read, in the copy-and-paste response I received, that MotoNovo will refuse any future financing.

Here's the quote from their e-mail:



I don't like strong-arm tactics, though I suppose MotoNovo have the legal right to deny financing to whomever they choose. I hadn't seen this policy come out in black-and-white before, so thought I'd put it here for the benefit of any potential future MotoNovo customers!

It's not really strong-arm tactics - it's just business. They offer finance to make money, and if you VT, they make less profit - so they want to "discourage" it.

Garry7

"If you choose to exercise your legal rights, and even though we will still make a decent profit from your business over the last 2½ years, we will never give you finance again."

It's strong-arm tactics.

Clive_Woody

Garry7 wrote: »

"If you choose to exercise your legal rights, and even though we will still make a decent profit from your business over the last 2½ years, we will never give you finance again."

It's strong-arm tactics.

They are choosing to exercise their legal right to lend money to whom they choose. They are being very clear and open that they will not lend to people who sign a contract for HP/PCP then opt to end that agreement early. I suspect other companies employ a similar stance but do not openly state this. I applaud them for their transparency and for informing you of the consequences of your decision should you decide to proceed.

bengalknights

At least they are upfront about it compared to other finance houses who will just straight decline applications for doing the same and use the check your credit report excuse.

iolanthe07

You can't blame them. Why should they do business with people who, although quite legally, have messed them about in the past?

gycraig_2

Least they are honest about it.

mrmagooooooo

Yeah to be fair i see nothing wrong with that. Wouldn't you in their shoes? By terminating early you are losing them money. Why would they want to offer you finance again when you will likely do the same thing again?

Lets say you bought the car for 5k over 5 Years at for arguments sake 5%apr .

2.5 Years down the line you decide to VT

So far you will have paid around £3125 to Motonovo now they are left with a car they have to collect and sell at auction for a lot less than its actually worth.

So lets say that motonovo have to pay £200 for a flatbed to come and collect the car.

Lets say that the Auction house will charge another £200 for the sale at auction (this is completely dependent on how much commission etc the auction house charges)

And lets be generous and say that the car sells for £1000 as a 5k car after 2 and a half years isnt going to go for much more.

So that all said and done. The finance company was nice enough to lend you £5000 and they have only got back £3725

Now can you see why they wouldn't want to offer you finance again?

daveyjp

The price they charge for the money will include risk for VT. If it doesn't they won't be around long.

Introducing rules which reduce the opportunity of future business could lose them more than the occasional VT.

When I did a VT I had to take the car to the local auction house.

DCFC79

Garry7 wrote: »

"If you choose to exercise your legal rights, and even though we will still make a decent profit from your business over the last 2½ years, we will never give you finance again."

It's strong-arm tactics.

Its the business model they have in place, not really strong arm tactics.

You can use another finance company or use cash for the next vehicle.

mrmagooooooo

daveyjp wrote: »

The price they charge for the money will include risk for VT. If it doesn't they won't be around long.

Introducing rules which reduce the opportunity of future business could lose them more than the occasional VT.

When I did a VT I had to take the car to the local auction house.

Of course their business model will project earnings taking in to acount of people defaulting, repossessions and VT's their business model will also take in to account of mitigating risks.

If a customer of yours lost you a few grand would you want them as a customer again?

I think not

:beer: