Voluntary termination

I have recently voluntary terminated my car loan agreement as it was too expensive and couldn’t keep up with the payments. Not once did the company tell me I would need to pay back £8000 - £388 a month when I was paying £400 for the car. I now have given the car back and they have sent me a letter to say I would need to pay £388 a month. I have called today to say no body has told me this and to listen to the calls they have had with me. Surely they can’t expect me to pay £388 a month for a car I no longer have when I couldn’t afford £400 a month for a car in the first place. Someone help! 🙈 I am so stressed and I cannot afford this. I would not of done this if I was informed about this outcome. 
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  • Ebe_Scrooge
    Ebe_Scrooge Posts: 7,320
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    edited 23 August 2022 at 1:33PM
    Check your contract, but you normally have to pay off (or already have paid off) 50% of the initially agreed "total amount payable" when you VT.
  • DrEskimo
    DrEskimo Posts: 2,333
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    It would have been prudent to seek advice on here before going ahead with VT. With the current car market, it's possible you could have simply traded the car in to a local garage/dealer or the likes of WeBuyAnyCar and received a trade in valuation similar or even greater than the settlement of the loan. However it's a bit late for that now.

    As above, VT requires that 50% of the total amount payable is paid. On a straight HP loan with no final 'balloon' payment, this is simple half way through the agreement. But on a PCP where there is a large final 'balloon' payment, this is further along and typically towards the end of the finance term.

    Do you have all the info regarding the loan? What type was it (e.g. PCP)?

    Do you have the following:

    Agreed price of the car: £
    Deposit/upfront payment: £
    Total amount financed: £
    Finance term (months):
    APR (%):
    Monthly cost: £
    Final payment (GFV/Balloon): £

    Then finally details of when you initiated the VT (how many months into the agreement)?
  • Grumpy_chap
    Grumpy_chap Posts: 14,356
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    The OP also needs to share what they asked and anything they were asked when they contacted the lender about VT.
    It may be that the lender should not have accepted VT if the loan / car was not eligible for VT.

    Lindsayxx said:
    I have recently voluntary terminated my car loan agreement as it was too expensive and couldn’t keep up with the payments. Not once did the company tell me I would need to pay back £8000 - £388 a month when I was paying £400 for the car. I now have given the car back and they have sent me a letter to say I would need to pay £388 a month. I have called today to say no body has told me this and to listen to the calls they have had with me. Surely they can’t expect me to pay £388 a month for a car I no longer have when I couldn’t afford £400 a month for a car in the first place. Someone help! 🙈 I am so stressed and I cannot afford this. I would not of done this if I was informed about this outcome. 



  • DrEskimo
    DrEskimo Posts: 2,333
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    edited 23 August 2022 at 3:37PM
    The OP also needs to share what they asked and anything they were asked when they contacted the lender about VT.
    It may be that the lender should not have accepted VT if the loan / car was not eligible for VT.

    Lindsayxx said:
    I have recently voluntary terminated my car loan agreement as it was too expensive and couldn’t keep up with the payments. Not once did the company tell me I would need to pay back £8000 - £388 a month when I was paying £400 for the car. I now have given the car back and they have sent me a letter to say I would need to pay £388 a month. I have called today to say no body has told me this and to listen to the calls they have had with me. Surely they can’t expect me to pay £388 a month for a car I no longer have when I couldn’t afford £400 a month for a car in the first place. Someone help! 🙈 I am so stressed and I cannot afford this. I would not of done this if I was informed about this outcome. 



    There is no question of eligibility or acceptance of VT. VT is a contractual right. The OP has the right to exercise their contractual right to VT whenever they choose.

    However, under the terms of the contract, the lender is entitled to at least 50% of the total amount payable. If they have already paid 50% or more of the total amount payable it means they can VT with no further charges (bar any damage beyond fair wear and tear and excess mileage). If they VT before paying 50% of the total amount payable then they must pay this 'arrears' once they VT.
  • molerat
    molerat Posts: 31,503
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    edited 23 August 2022 at 3:50PM
    There is no question of eligibility or acceptance of VT. VT is a contractual right

    Providing of course the contract is one where VT is actually an option.

    There have been a few posts on here where the poster wanted to VT a lease etc


  • DrEskimo
    DrEskimo Posts: 2,333
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    molerat said:
    There is no question of eligibility or acceptance of VT. VT is a contractual right

    Providing of course the contract is one where VT is actually an option.

    There have been a few posts on here where the poster wanted to VT a lease etc


    Yes fair point!
  • MrFrugalFever
    MrFrugalFever Posts: 1,228
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    You can VT a lease but you’ll need to pay the remaining payments in most cases so it almost becomes a pointless exercise.

    If the OP has a PCP agreement and exercised their right to VT (hopefully VT and not voluntary surrender - must not confuse the two), with a VT at a very early stage then unfortunately the finance company are well within their rights to clawback up to 50% of total amount payable by way of extended payments or even request a payment in full.

    Arguing that you were not told will not likely get you anywhere as you would have had to sign at least 3 pages for a PCP agreement in most cases and would have been presented with all terms and conditions prior to doing so, the failure to read this really is on your part not theirs.
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  • macman
    macman Posts: 52,949
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    edited 23 August 2022 at 7:33PM
    Surely the OP would have had to sign some paperwork to complete the VT process, and that paperwork would have stated the balance owing, if it had not reached 50%?
    OP needs to tell us if this is a PCP or HP agreement and how much they have already paid off. 
    What's depressing is that the OP states that she 'couldn't afford £400pm for the car in the first place', but went ahead with the deal anyway.
    If it was a lease, would not the payments have remained at £400 for the remainder of the lease term, rather than reduce to £388?
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  • MEM62
    MEM62 Posts: 4,660
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    @Linssayxx If you answer the questions asked by other respondents you are more likely to receive useful advice.  
  • macman
    macman Posts: 52,949
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    MEM62 said:
    @Linssayxx If you answer the questions asked by other respondents you are more likely to receive useful advice.  
    OP has been back on today, but not posted any of the info needed to clarify the problem. 
    No free lunch, and no free laptop ;)
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