Being charged for Voluntary Termination of HP

Bennymc

Hey everyone

Wondering if someone can help. I returned my car last month by way of Voluntary Termination. I was 3 years into the 5 year term, the car was MOT’d and in great condition pretty much undamaged bar a few usage related marks (basically in as good condition as you could hope for after 3 hears, given it was already 4 years old when I got it). When the car was collected in January the driver assessed the car and all he wrote on the report was ‘Minor marks and scuffs around vehicle’. The contract didn’t stipulate a mileage limit and even if it did, I only put around 8-10k on it a year.

Anyway, I got a letter from them yesterday saying this:

“This is a notice served in compliance of the Consumer Credit Act 1974 and provides you with details of default sums payable on your account.

Due to the recent collections activity which may include commencing legal action, charges arising from repossession of the vehicle, charges arising from the voluntary termination of the agreement, or damages applied, a default sum of 434.30 has been charged to your account in line with the terms and conditions of your hire-purchase agreement.

This default sum is payable as at the date of this notice and will be collected at the end of your hire-purchase agreement”


So many questions:

Am I right in thinking this is total nonsense?
They’ve made it sound like I defaulted on my loan when I didn’t - I gave it back. Have they just used the wrong precedent letter template or something?
As I understand it, if you’re over half way through the HP they can’t charge you for anything other than damage beyond fair wear and tear can they?
And is it right that they haven’t explicitly told me what the charges are for, and instead just say it ‘could be for any of these things’?
Am I within my rights to ask them exactly what they're claiming I owe them by way of a detailed breakdown?

I’m looking to respond either by phone or in writing but really want as much knowledge going into it as possible – any help from this community would be greatly appreciated.

Thanks,

neilmcl

Bennymc wrote: »

Hey everyone

Wondering if someone can help. I returned my car last month by way of Voluntary Termination. I was 3 years into the 5 year term, the car was MOT!!!8217;d and in great condition pretty much undamaged bar a few usage related marks (basically in as good condition as you could hope for after 3 hears, given it was already 4 years old when I got it). When the car was collected in January the driver assessed the car and all he wrote on the report was !!!8216;Minor marks and scuffs around vehicle!!!8217;. The contract didn!!!8217;t stipulate a mileage limit and even if it did, I only put around 8-10k on it a year.

Anyway, I got a letter from them yesterday saying this:

!!!8220;This is a notice served in compliance of the Consumer Credit Act 1974 and provides you with details of default sums payable on your account.

Due to the recent collections activity which may include commencing legal action, charges arising from repossession of the vehicle, charges arising from the voluntary termination of the agreement, or damages applied, a default sum of 434.30 has been charged to your account in line with the terms and conditions of your hire-purchase agreement.

This default sum is payable as at the date of this notice and will be collected at the end of your hire-purchase agreement!!!8221;


So many questions:

Am I right in thinking this is total nonsense?
They!!!8217;ve made it sound like I defaulted on my loan when I didn!!!8217;t - I gave it back. Have they just used the wrong precedent letter template or something?
As I understand it, if you!!!8217;re over half way through the HP they can!!!8217;t charge you for anything other than damage beyond fair wear and tear can they?
And is it right that they haven!!!8217;t explicitly told me what the charges are for, and instead just say it !!!8216;could be for any of these things!!!8217;?
Am I within my rights to ask them exactly what they're claiming I owe them by way of a detailed breakdown?

I!!!8217;m looking to respond either by phone or in writing but really want as much knowledge going into it as possible !!!8211; any help from this community would be greatly appreciated.

Thanks,

I suggest you do that now as I don't think the advice you'll get here will be that useful until you know exactly what the charges are for.

The letter is a default letter and quite clearly states "include...charges arising from the voluntary termination of the agreement" so no they're not implying you've defaulted, if you had you wouldn't been able to VT in the first place.

DoaM

Bennymc wrote: »

As I understand it, if you’re over half way through the HP they can’t charge you for anything other than damage beyond fair wear and tear can they?

I don't know whether your specific contract is covered, but the general rule is that at least 50% of the contract value has been paid - not that more than 50% of the loan period has expired.

Manxman_in_exile

Does the 50% paid rule for VT apply to hire purchase agreements?


Apologies if that is a stupid question!

LandyAndy

DoaM wrote: »

I don't know whether your specific contract is covered, but the general rule is that at least 50% of the contract value has been paid - not that more than 50% of the loan period has expired.

The OP says they have VT'd it so they must have met the financial requirements.

Bennymc

Hi all

Thanks for your help so far

I applied for VT in December and got a reply saying they accept and that they would collect and assess the car for damage. I'll dig the letter out later after work but it said they would only charge me for damage to the car even if they don't repair it to cover losses. Also I'm pretty sure thier T's & C's said the same, but as mentioned I'll confirm later

For the record, I was over 50% of money owed as well as through the term.

Bennymc

I suggest you do that now as I don't think the advice you'll get here will be that useful until you know exactly what the charges are for.

The letter is a default letter and quite clearly states "include...charges arising from the voluntary termination of the agreement" so no they're not implying you've defaulted, if you had you wouldn't been able to VT in the first place.

With the language used, I think they want me to think I've defaulted and then used really loose vocabulary to obfuscate the message a little like may include [this and] could result in [that].

I have a feeling they've sent this charge out more or less to see if I pay it. I'll get onto them about a breakdown of charges now.

molerat

Manxman_in_exile wrote: »

Does the 50% paid rule for VT apply to hire purchase agreements?


Apologies if that is a stupid question!

Hire purchase agreements is what the 50% rule applies to !

Manxman_in_exile

molerat wrote: »

Hire purchase agreements is what the 50% rule applies to !

Sorry! Thought it was a stupid question!


I actually studied consumer credit law about 40 years ago, but the different ways of financing car purchases these days is so complex (and not necessarily consumer friendly) that I get easily confused.

Bennymc

RESOLVED

Hi all

Looks like it was a false alarm! (Kind of)

I called them just now and apparently they added the charge for the collection of the car on the 16th of Feb, but then, and I quote, "Once the VT was finalised [whatever that means] all the incurred costs and charges that you may have received in these letters have been written off with the balance, you don't actually owe anything - your balance is now zero"

I then requested they send me that in writing - I recorded the call too just in case, can never be too careful these days!

Cheeky gits though! I'd bet £434.30 that they sent that out hoping that I wouldn't question it and just pay it anyway.

Oh well, all seems to be resolved - and pretty quickly too thanks again for your help, I'll update you if anything changes.

motorguy

LandyAndy wrote: »

The OP says they have VT'd it so they must have met the financial requirements.

For info, you can VT a car at any time, however the finance company can only pursue you for 50% of the total cost of the agreement, so once you've paid 50% they cant ask for further payments (unless wear and tear related)

For example you could VT a car after you've paid 10% however the finance company could only pursue for the further 40%, not all payments remaining or some disproportionate sum.