Hire Purchase -ADVICE REQUIRED

Legacy_user

Hello!
I’d really appreciate any advice anyone could offer me with this current problem.

I have a hire purchase agreement with ‘Specialist Motor Finance’ yes, I’m aware I’m an idiot before we start but I’d had previous bad credit from a break down in a long relationship that I carried the crap for, I was in long term stable employment and I desperately needed a car, and they gave me finance. This was in August 2015.

In fairness to them, I’ve had no issues with the company, they’ve been fair.

The car purchase price was £6800. The cost of finance was £ 7682. Total payable was £ 14482.00 over 60 Months. It’s £233.83 per month. Very affordable and no issues. Last year I became pregnant and went on maternity leave. I was only entitled to statutory maternity pay, as I had changed my job working for a new company with more money just 3 months before I found out I was pregnant.

I contacted SMF and asked if they would consider a reduction in my monthly payments whilst I was on maternity, they agreed 4 months reduction from £233. Per month to £150.00 per month, they agreed I could add the arrears to the end of the term, and I was very grateful for this.

I had planned to return to work after 6 months, however, this was not possible as my so. Had some health problems and I had to take longer. I increased my payments back to £233 per month and have been doing up until now.
I’ve not yet gone back to work as I now have a health issue that requires surgery in the new year, on top of that there have been some huge changes in the company I work for and many people including me are facing redundancy in the new year. Im now receiving statutory sick pay and have been for the last month.

Things are right! We’ve gone from a joint salary (my husband and I) of £3100 per month to just my husbands salary £1400 per month. He is covering all of our priority debts. (mortgage, council tax, food, bills) we don’t have credit cards now, we are clearing 2 credit cards that we maxed out a few years ago after doing an extension on our home and they are under control.

My issue is the car. We can not afford to pay the car. The remaining balance is currently £ 6018. 03.

Where do I stand? What can I do? I don’t want to hand the car back. I’ve discussed with the finance company who have said the best thing I can do is hand the car back!

Anyone know my rights here?

Any advice much appreciated, thank you in advance. 😊

BoGoF

So you want to keep the car but not pay what you have remaining on credit?

Gaz83

Emispring18 wrote: »

Where do I stand? What can I do? I don’t want to hand the car back. I’ve discussed with the finance company who have said the best thing I can do is hand the car back!

Just out of interest, what do you think should be an option available to you?

System

No I want to repay the car, but I would like to reduce my payments until I am back in work. We’re probably looking at 4 months breathing space whilst I have surgery, recover and get back to work.

If I wanted a car and not to pay for it, with all due respect I’d have ducked out a long time ago and not pay the £8000 I already have!

molerat

Unfortunately your "rights", as the finance co have told you, are to pay the finance as agreed or hand the car back. If they are not willing to negotiate a further extension then not a lot you can do to make them. What is the total amount you have paid so far - all payments including deposit ? The other option is to try for a loan elsewhere to pay it off at a more affordable rate. The problem there is that you will be borrowing to pay for an ageing car and the original 5 years for a used car was not really a sensible plan in the first place.

DrEskimo

I’m not really sure what rights you are hoping you have? You can’t afford the monthly payments on the car loan, so you either have to settle the loan, or sell the car or hand it back.

How much is the car worth? Considering it was £6,800 over 3years ago, I doubt you could sell it for £6000 today to settle the finance? Are the finance company offering for you to hand it back and just walk away with nothing else owing?

If so then I agree, this is definitely the best option. You then have to work out how to buy a cheap car, or if possible do withot a car for a while while you improve your situation financially.

System

I’d like the option of being able to reduce my payments again for a few months. These are exceptional circumstances, however, if they had to do that for me they’d have to do it for everyone, and the unscrupulous loafers of society would take advantage of this and abuse it.

But im wondering where I stand legally.

System

I have paid £8464 to date

Gaz83

Emispring18 wrote: »

I’d like the option of being able to reduce my payments again for a few months. These are exceptional circumstances, however, if they had to do that for me they’d have to do it for everyone, and the unscrupulous loafers of society would take advantage of this and abuse it.

But im wondering where I stand legally.

Where you stand legally is that you agreed to pay back a sum of money every month to your finance company.

You've already broken that agreement once. The finance company have no legal obligation to allow you to do that again.

Sounds like they want the car back so that they can sell it to offset some of the outstanding amount, and then you'll need to come to an agreement with them to pay the difference.

Not sure what you're wanting to be honest.

System

The finance company are advising I hand it back and I’ll still be liable for the remaining debt. Not that I hand it back and case closed.
The car has a book price of about £1800 now, so no joy there.

System

Where you stand legally is you have to comply with what the terms of the finance agreement are or you are in breach of contract and they can exercise the penalties contained within it. There is no legal right to reduced payments or payment holidays, exceptional circumstances or not.

Your options are to hand the car back or to take out finance over a longer period to clear the finance you've got outstanding. If you've paid 50% of the amount borrowed you can voluntarily terminate the agreement and hand the car back with nothing else to pay.