Voluntary Termination Frustrations 12 April 2021 at 7:58AM in Loans 8 replies 431 views

CL16Fan

I did as much research as I could before we VT'd our car and tried to do everything right. We'd paid back more than half of the total amount payable, I sent the letter recorded delivery and got a delivery signature from the Royal Mail website. I anticipated being charged for the excess mileage.

What I didn't expect was for the process to then be such a mess that in our last communication with the car finance company, they recommended we file a complaint.

The timeline went roughly like this:
Mid-February: Send them a letter. "Hello I'd like to VT please."
Mid-February + a day: Check the Royal Mail website and download the PDF of proof of delivery. Cancel the direct debit so March's payment doesn't go out.

Silence.

Early March. Call them "Hello I haven't heard anything back about my VT yet."
They say "What VT????"
I send them an email with a PDF of the original letter and a PDF of the proof of delivery.

Mid March. They send someone round to collect the vehicle. Everything goes smoothly with them.

Mid March. They send us a letter saying we're in arrears because we haven't paid March's monthly. I call them and ask them to refer to the letter they received in February which they didn't record until March. They asked me to send them the letter and proof of delivery again, which I do so.

Early April. They send us a letter saying we need to give them £1500. I call them "What's all this then??" and they say we're still in arrears. I ask for a breakdown of the charges that are making up the £1500 because the excess mileage wasn't that much. Still waiting for that breakdown...

And the part that's leading to the complaint... They also say we owe them three payments from last year where we did a covid break, even though they said at the time it wouldn't put us in arrears, and we happily paid the increased monthly cost after those three months. They even sent us letters that said "legally we have to send you this arrears letter but if you had a covid break then don't worry about it." I could kind of understand their logic about the missing payments if it meant we fell short of that 50% total, but we're already above it even without them. 

My question is... has anyone else been in this position of VT'ing a car after a covid break, and how's that working out for you? Has anyone successfully fought charges they deem unfair when VT'ing a car?

The credit company explained that if we don't give them £1500 by the start of May then they'll send the debt on to their collection agency (I assume we'll be able to add that to our DMP with Stepchange but I still need to research that), but if we file the complaint then everything gets put on hold until the complaint is resolved.

I just want to take the calmest steps to resolve this situation. I've never filed an official complaint with anyone before.

P.S. If anyone wants some eye-rolling situations, their last letter they sent us that we called them about, they'd addressed it to some random stranger, and mis-typed our account number such that when we called them and read our account number from the letter, they told us it was wrong. Oh dear. 

[Deleted User]

The missed payments will certainly need to be made up. Think of it in terms of the monthly lease for each month you had the car, so you had the car for more months than you've paid for.

You may able to argue the final payment, but essentially it will still be owed as you still had the car, depending on the precise timings. Never stop a direct debit until long after a contract has been finalised.

The only outstanding point is the excess mileage.

CL16Fan

I guess I'm struggling to get my head round it being a monthly lease because it's a PCP deal. Perhaps I'm erroneously clinging to that "but we've already paid 50% what more do you want from us?" and "You told us not to worry about the missed payments." If only covid had been around in 2018 when we took out the agreement, there would have been something in the paperwork to cover this situation!

[Deleted User]

You can VT at 50% but your payments need to match the period. Otherwise you could stop payments at 50% and keep the car for another year

So what they want from you are the missing payments. They told you not to worry about them before because you were still in contract and they would be covered by the slightly increased monthly payment.

.

DrEskimo

The 50% VT is contingent on you being up to date with your payments. It doesn't matter if you have paid over 50% of the total amount payable.

Not much use now, but did you check what the car was worth, relative to the outstanding finance owning? I always advice people to try and sell the car on rather than VT. Not least because there may be value in the car, but also because I constantly read of people having to fight against scenarios like this....

CL16Fan

DrEskimo said:

Not much use now, but did you check what the car was worth, relative to the outstanding finance owning? I always advice people to try and sell the car on rather than VT. Not least because there may be value in the car, but also because I constantly read of people having to fight against scenarios like this....

Yeah the car was worth about £600 less than the settlement figure, which is what helped swing it towards VTing for us. We were in the situation where our minimum payments on our debts were increasing and we were getting closer each month to running out of money, so at the same time as VTing the car, we also started a DMP with Stepchange. The car was costing us £300 a month in petrol for commuting, so we switched to an electric car on a lease instead. Same monthly cost, but no more £300 in fuel. Everything's going better now financially, just need to sort this last pickle with the VT!  

But yeah I agree with you, VT should always be the last option because it never seems to go well for people (although maybe the people for whom it does go well don't rant about it on the internet, haha). I got rid of a car a few years ago that was close to the end of its three year PCP and I ended up selling it to a dealer for less than the settlement figure and then paying the difference, because that difference was less than what the service / MOT / insurance renewal would have cost the next month. 

What I see happening is this:
1) We file the complaint and ask the finance company to give us a complete breakdown of all the charges and what they're for 
2) They review the file and adjust the charges as necessary (probably not a huge amount by the sounds of things)
3) We either pay off the amount if we can afford it, or add it to our DMP if we can't

There'll be a way to pay the full amount that we owe, I just want to make sure that the amount is accurate. The fact that they still haven't acknowledged the original date of our VT letter gives me some doubts that all the charges are accurate. Once they can explain to us what we owe in a way that we can understand, we'll pay it.

But yes, don't VT unless you really think it's the best way! I'm kind of glad we're on a lease deal now and can't VT. 

DrEskimo

CL16Fan said:

DrEskimo said:

Not much use now, but did you check what the car was worth, relative to the outstanding finance owning? I always advice people to try and sell the car on rather than VT. Not least because there may be value in the car, but also because I constantly read of people having to fight against scenarios like this....

Yeah the car was worth about £600 less than the settlement figure, which is what helped swing it towards VTing for us. We were in the situation where our minimum payments on our debts were increasing and we were getting closer each month to running out of money, so at the same time as VTing the car, we also started a DMP with Stepchange. The car was costing us £300 a month in petrol for commuting, so we switched to an electric car on a lease instead. Same monthly cost, but no more £300 in fuel. Everything's going better now financially, just need to sort this last pickle with the VT!  

But yeah I agree with you, VT should always be the last option because it never seems to go well for people (although maybe the people for whom it does go well don't rant about it on the internet, haha). I got rid of a car a few years ago that was close to the end of its three year PCP and I ended up selling it to a dealer for less than the settlement figure and then paying the difference, because that difference was less than what the service / MOT / insurance renewal would have cost the next month. 

What I see happening is this:
1) We file the complaint and ask the finance company to give us a complete breakdown of all the charges and what they're for 
2) They review the file and adjust the charges as necessary (probably not a huge amount by the sounds of things)
3) We either pay off the amount if we can afford it, or add it to our DMP if we can't

There'll be a way to pay the full amount that we owe, I just want to make sure that the amount is accurate. The fact that they still haven't acknowledged the original date of our VT letter gives me some doubts that all the charges are accurate. Once they can explain to us what we owe in a way that we can understand, we'll pay it.

But yes, don't VT unless you really think it's the best way! I'm kind of glad we're on a lease deal now and can't VT. 

That sounds like a good idea.

Although it's worth clarifying that you were only £600 short relative to the value since you hd paid less than originally contracted to (due to the payment holiday). Also sounds like you were over the agreed mileage (pro-rated). Both of these should have been considered at the time.

Big fan of EVs! My advice is go second hand! The depreciation on mine has been ridiculously low over last 2yrs! About £50/month.

CL16Fan

Update to this in case anyone ever finds this in the search and has a similar problem - the credit company EVENTUALLY (after multiple phone calls and emails to the same address, ahaha) acknowledge the first date of receiving the VT and adjusted the costs as appropriate. We did have to pay the three months covid break because as they explained, and the helpful posters here explained, you have to pay this back somehow, you don't just get three months free motoring. Unless you VT though, it won't be an issue because your PCP plan will just last a little bit longer instead.

We're now enjoying our EV and never visiting a petrol station.  

phillw

I kinda wish they would call them payment deferrals rather than payment holidays.

I'm sure a few people have thought it meant the money didn't need to be paid.