Voluntary Termination on HP Finance

adam1407

Hi Everyone,

I have a car on finance and the last instalment is due end of this month. There is a baloon payment of over 4k which I cannot afford to pay. Also, I have exceeded the mileage by nearly 25k! Can I still volunatry terminate this agreement and just hand the car back? It is in overall good condition except the mileage which is my biggest worry.

[Deleted User]

What is the agreement on excess mileage? x pence per mile?

molerat

Of course you can VT and hand the car back. There are two diametrically opposed views on the legal implications of VT and excess mileage but exceeding the mileage by that amount is quite honestly taking the !!!! and I fully expect the company will chase for the excess.

Dobbibill

If you want to keep the car you could ask them about financing the £4k and purchasing the car.

adam1407

Thanks for your replies. Excess mileage is charges at 7p/mile + VAT. @molerat thanks for your comment too, but you don't know the story behind so please only comment on how to resolve the issue and not on the circumstances, thanks.

I have a lot of repayments and I just want to get rid off every finance I have in place and I would rather buy £100, 20 years corsa instead. Will mileage be taken into consideration when doing VT? Any other options I have to get rid off the cars quick and without having to be charged £2k for excess mileage.

foxy-stoat

How much is it realistically worth as a private sale?

If its about £2000 then I would take out a loan/credit card and buy it for £4K - either sell it for £2000 and buy your next £100 car and pay off the credit card....or try and VT it but you may have a £2000 + bill if they decide your excess mileage is a winner that you will have to pay or fight - then you will have no car and £2000 less.

If its worth £3000 + then definitely buy it and sell afterwards.

adam1407

Well, actually it is worth between £4.5 - £5k when selling privately. Toyota has valued it at £3.7k not taking into account excesa mileage. Are you saying then that my best option is to try to finance the balloon payment and sell ut privately?

foxy-stoat

adam1407 wrote: »

Well, actually it is worth between £4.5 - £5k when selling privately. Toyota has valued it at £3.7k not taking into account excesa mileage. Are you saying then that my best option is to try to finance the balloon payment and sell ut privately?

Yes, if it worth that much do that as you shouldn't get charged the excess.

Nasqueron

Alternatively if your credit is good, try a 0% money transfer card for cash into your bank or a 0% BT card (if they will accept payment of the balloon by card)

System

adam1407 wrote: »

Will mileage be taken into consideration when doing VT? Any other options I have to get rid off the cars quick and without having to be charged £2k for excess mileage.

Yes it will be taken into account. FSA have been siding with the lenders in court cases when people have challenged being charged for mileage when VTing but some others have managed to VT without getting charged. I would expect though that being 25,000 miles over you're going to be taking some pain.

sourcrates

The rules on mileage allowances are in desperate need of updating.


25 years ago i had an Escort XR3i, which was knackered at 47,000 miles.

A modern petrol or diesel car today will go twice round the clock before it needs attention, if its serviced correctly.


Millage is not the be all and end all it once might of been, in the case of PCP, its just another excuse for a penalty charge.