Voluntary Termination

Will2019

Hi everybody,

New to this!

I am looking at Voluntary Termination of my car finance (through Moneyway) due to getting this car out when I had very, very bad credit and now paying through the roof for the car!

I am shortly becoming a Dad, and the amount i pay is silly and need to reign in all outgoings to accommodate for the arrival(more for 6 months down the line when maternity pay starts!)

I have paid over 50% of my loan - including all interest etc. I have NEVER missed a payment with them and always paid on time since i got the car out in Sept 2016!

I am not familiar with the VT concept, can anyone help? Will it effect my credit file? Will i have to pay anything? My car has a few scratches on - but i have been driving it for nearly 3 years!

any help would be amazing.

Thanks
Will

foxy-stoat

Check out your credit agreement how to VT the car - I assume the payments havent gone up so the monthly amount was the same when you first took on the finance.

You wouldnt of paid all your interest as this would get added monthly - you can VT at any time, as long as you have paid at least 50% of the total agreement then there should be nothing to pay, as long as it isnt a PCP deal where you are handing back over the agreed mileage and the scratches are not deemed fair wear and tear.

Will2019

foxy-stoat wrote: »

Check out your credit agreement how to VT the car - I assume the payments havent gone up so the monthly amount was the same when you first took on the finance.

You wouldnt of paid all your interest as this would get added monthly - you can VT at any time, as long as you have paid at least 50% of the total agreement then there should be nothing to pay, as long as it isnt a PCP deal where you are handing back over the agreed mileage and the scratches are not deemed fair wear and tear.

I have spoken to my broker today- and have paid 50% as of January, (30 months) I will check the contract when i get home to see the ins and outs, basically i paid £9800 for the car and nearly £7000 in interest. (yes my credit score was horrific and needed a car for work) live and you learn eh!

Looking around, I can get basically the same car for £180 a month; £130 less than i am paying now! But before i do it, i do not want it to effect my credit score, as i have worked really hard to bring it back up!

foxy-stoat

Your in luck then, as you dont have a credit score - only credit history.

Good credit history is making contracted payments on time - VTing a car wont effect your history as it will be logged as a settled agreement.

bazzyb

foxy-stoat wrote: »

VTing a car wont effect your history as it will be logged as a settled agreement.

This is not correct, especially in the OP’s circumstances. Having had to use a subprime lender such as Moneyway already, then a VT absolutely could affect things on a new HP. Many subprime and near prime lenders will place restrictions or even decline if there is a VT on file.

So whilst OP is saying their credit has improved, if they’re now at a point where there is no historical adverse and they have a range of prime lenders available it will make little difference, otherwise it could cause an issue.

Mercdriver

OP, how long have you left to run? If this was a 36 month term it might be as well to complete it if there is a danger that a VT would affect your chances.

DrEskimo

And as ever, check the vehicle value against the settlement figure.

You could just trade the car in and settle the finance without going through the process of VT.
Who knows, maybe you can get a valuation more than the settlement....

Will2019

Thanks for your replies, I still have 30 months to go, it was a 5 year finance... yes once again was very silly! Hindsight eh!

In regards to the VT how can I be sure that it wouldn’t effect my credit score? Is there ways of checking lenders to see if they accept People who have a VT on file?

Mercdriver

Will2019 wrote: »

Thanks for your replies, I still have 30 months to go, it was a 5 year finance... yes once again was very silly! Hindsight eh!

In regards to the VT how can I be sure that it wouldn’t effect my credit score? Is there ways of checking lenders to see if they accept People who have a VT on file?

Check the figures carefully. What is the amount you have paid so far versus the total on the agreement. It might not necessarily be 50% through the calendar term of the agreement. It all depends how the repayments are paid against capital and interest.

LandyAndy

Will2019 wrote: »

I have spoken to my broker today- and have paid 50% as of January, (30 months) I will check the contract when i get home to see the ins and outs, basically i paid £9800 for the car and nearly £7000 in interest. (yes my credit score was horrific and needed a car for work) live and you learn eh!

Looking around, I can get basically the same car for £180 a month; £130 less than i am paying now! But before i do it, i do not want it to effect my credit score, as i have worked really hard to bring it back up!

Car £9800 + Interest £7000 = total cost £16800 = £280 pm over 60 months.

or have you paid £7000 in interest so far :eek:

in which case.

Car £9800 + Interest £14000 = total cost £ 23800 = £396pm over 60 months.

But you are paying £310 pm?

Will2019

Sorry was at work when I did all the math, since looking at my agreement £11,278 for the car and interest of £7500 = £18778 total over 59 months... and I’ve paid 33 months at £300.58 and the first month of £310.58!