Selling a Hire purchase car.

dawebo

Hi all. I've recently decided to part ways with a car I took on in a Hire Purchase agreement 18months ago.
I have recieved my settlement letter, so along with that I went off to webuyanycar and they offered to buy the car while paying the settlement figure to the finance company and I was told the remaining amount would be deposited in to my bank account. Now to me that seems too good to be true surely? What makes me entitled to that money as with a hire purchase it is not my car, but it is what I am being told.

Has anyone ever done anything similar or have any advice?

Thanks.

waamo

That is correct. The car is worth more than you owe on finance so you get the balance.

F1F93

This is indeed normal if the car is worth more than your outstanding finance. The catch is that there may not be much, if any, money left to be paid into your account after the finance is paid off.

worried_jim

F1F93 wrote: »

This is indeed normal if the car is worth more than your outstanding finance. The catch is that there may not be much, if any, money left to be paid into your account after the finance is paid off.

and WBAC will probably be pulling your pants down to spank you on the deal.

dawebo

I actually come out with a decent amount of money to be honest. What im more concerned about is that with a hire purchase the car is not technically mine... so how is the remaining balance mine? If i was to continue paying until the end of the agreement and then decide to give the car back rather than pay the balloon charge for the car I wouldnt get any money. But doing it this way with WBAC i get nearly £3000. Why wouldnt everyone do this?

DUTR

dawebo wrote: »

I actually come out with a decent amount of money to be honest. What im more concerned about is that with a hire purchase the car is not technically mine... so how is the remaining balance mine? If i was to continue paying until the end of the agreement and then decide to give the car back rather than pay the balloon charge for the car I wouldnt get any money. But doing it this way with WBAC i get nearly £3000. Why wouldnt everyone do this?

For lots of reasons.....
not everyone buys a car on finance.
There must be a unique set of circumstance for the car to be worth more than the outstanding finance to the tune of the £3k you suggest.

dawebo

DUTR wrote: »

For lots of reasons.....
not everyone buys a car on finance.
There must be a unique set of circumstance for the car to be worth more than the outstanding finance to the tune of the £3k you suggest.

WBAC valued my car at £5500 and my settlement figure is £2554. If I was to pay that myself the finance company would collect the car. So do you know why it is different for WBAC to pay it or any other licenced dealer for that matter?

Cornucopia

dawebo wrote: »

WBAC valued my car at £5500 and my settlement figure is £2554. If I was to pay that myself the finance company would collect the car. So do you know why it is different for WBAC to pay it or any other licenced dealer for that matter?

What you are doing is settling the agreement early - you are bringing forward the end-date of the agreement (when you would take ownership of the car) by paying the Finance Company the amount owing (which is the total amount of your outstanding payments less a rebate for interest not incurred).

As such, there is no difference between you or WBAC paying off the agreement - effectively in cash, although WBAC plan to take the amount off the value of the car which they will then buy from you.

I'm not sure why you say, "If I was to pay that myself the finance company would collect the car", because that's not what would happen.

I'm not sure why you are concerned about the mechanism (which is completely normal) when it's the details that have the potential to catch you out. In particular is the Settlement Amount reasonable, and is the price that WBAC are offering reasonable?

dawebo

Cornucopia wrote: »

I'm not sure why you say, "If I was to pay that myself the finance company would collect the car", because that's not what would happen.

The reason I ask this is because in the settlement letter they also provided a pretyped response letter for me to send back which asked for me to tell them when and where to pick the car up from. If finance companies collecting the car is not what happens, why would they include that in the response? I understand thats not what happens with ordinary car finance etc. but this is a hire purchase, as the settlement figure does not include the final lump sum payment which I would pay at the end of the deal if I wanted to keep the car.

Cornucopia

Are you sure you mean "Hire Purchase" rather than PCP or Lease? Perhaps "Contract Hire", which is similar to PCP?

Or are you making a Voluntary Termination (paying 50% of the amount borrowed and handing the car back).

The latter might explain why the figures are better than you thought.

You can't give the car to WBAC if the Finance Company are expecting it back, so you'll need to clarify the situation to all parties' satisfaction before proceeding.

dawebo

I am making a voluntary termination of a "Hire Purchase Agreement". Which as I initially thought means I cannot let WBAC buy the car from me, which is why in the OP I asked if it was too good to be true. Is this correct?