HP Car Finance - help to calculate 50% repayment please

minx79

Hi

can someone please help me to work out when I will have paid 50% of my car finance back so I can get rid of the money pit car I was sold and cut my losses?

I have a complaint going through the ombudsman about the car (not holding out much hope though!) and if that fails, I want to hand it back when I have paid 50% but I can't seem to figure out when that will be. Would really appreciate it if someone can help?

The car purchase price was £4999.
I paid a deposit of £999
The monthly payments are £109.22 over four years.
Interest is 14.9% APR (probably a bad rate but I needed a car )

According to the finance agreement, the total amount repayable is £6242.56

The finance agreement says half repayment would be £3121.28

My question is that I already paid £999 as deposit, should this be deducted from the £3121.28?

I have paid £1310.64 in monthly payments so far.

Please can someone advise how much I have left to pay until 50% is paid and I can get rid of this stupid car! 

Grumpy_chap

minx79 said:

Hi

can someone please help me to work out when I will have paid 50% of my car finance back so I can get rid of the money pit car I was sold and cut my losses?

I have a complaint going through the ombudsman about the car (not holding out much hope though!) and if that fails, I want to hand it back when I have paid 50% but I can't seem to figure out when that will be. Would really appreciate it if someone can help?

The car purchase price was £4999.
I paid a deposit of £999
The monthly payments are £109.22 over four years.
Interest is 14.9% APR (probably a bad rate but I needed a car )

According to the finance agreement, the total amount repayable is £6242.56

The finance agreement says half repayment would be £3121.28

My question is that I already paid £999 as deposit, should this be deducted from the £3121.28?

I have paid £1310.64 in monthly payments so far.

Please can someone advise how much I have left to pay until 50% is paid and I can get rid of this stupid car! 

The following article may be of assistance:
https://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/

To take advantage of the Voluntary Termination (VT) rights, you need to have paid 50% of the total amount payable.
Based on the figures you presented, the total amount payable is £6,242.56.
You can check that 12 months x 4 years x £109.22 = £5,242.56 plus the deposit £999 = £6,241.56 (rounding difference somewhere, so ignore that)  You might need to double check there are no fees as well.

The half is, as you say, £3,121.28
You have paid £1,310.64 plus the deposit £999, so paid £2,309.64 to date.  That is not yet the point at which you could trigger VT.

Please bear in mind that VT is only one option you have.

Have you requested a settlement figure from the finance company?
If you have a settlement figure and then obtain prices to buy the car from the online buying sites (WBAC / Motorway / Arnold Clark etc), you may be able to sell the car, settle the finance and be better off overall.

minx79

Grumpy_chap said:

minx79 said:

Hi

can someone please help me to work out when I will have paid 50% of my car finance back so I can get rid of the money pit car I was sold and cut my losses?

I have a complaint going through the ombudsman about the car (not holding out much hope though!) and if that fails, I want to hand it back when I have paid 50% but I can't seem to figure out when that will be. Would really appreciate it if someone can help?

The car purchase price was £4999.
I paid a deposit of £999
The monthly payments are £109.22 over four years.
Interest is 14.9% APR (probably a bad rate but I needed a car )

According to the finance agreement, the total amount repayable is £6242.56

The finance agreement says half repayment would be £3121.28

My question is that I already paid £999 as deposit, should this be deducted from the £3121.28?

I have paid £1310.64 in monthly payments so far.

Please can someone advise how much I have left to pay until 50% is paid and I can get rid of this stupid car! 

The following article may be of assistance:
https://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/

To take advantage of the Voluntary Termination (VT) rights, you need to have paid 50% of the total amount payable.
Based on the figures you presented, the total amount payable is £6,242.56.
You can check that 12 months x 4 years x £109.22 = £5,242.56 plus the deposit £999 = £6,241.56 (rounding difference somewhere, so ignore that)  You might need to double check there are no fees as well.

The half is, as you say, £3,121.28
You have paid £1,310.64 plus the deposit £999, so paid £2,309.64 to date.  That is not yet the point at which you could trigger VT.

Please bear in mind that VT is only one option you have.

Have you requested a settlement figure from the finance company?
If you have a settlement figure and then obtain prices to buy the car from the online buying sites (WBAC / Motorway / Arnold Clark etc), you may be able to sell the car, settle the finance and be better off overall.

Hi

so I would only have to pay another £812 approximately to voluntary terminate and return the car?

Its the main option I am considering to be honest as I regret getting this car as it was not in the condition advertised, I reported electrical faults within the first two months of owning it which is the subject of the ombudsman complaint. Its just failed the first MOT with me today on suspension and exhaust fumes issues. I suspect the previous MOT was a dodgy one as it had no advisories at all and the problems that have come up in this MOT have not occurred in one year and only 2500 miles driven!

I also have to replace the bluetooth module which has failed and is causing other electrical issues in the car, also the subject of the complaint with the ombudsman. 

Thanks for your help  

minx79

When I send the letter for VT, do I then just not pay any further payments? I was going to send it in June, make the final payment in July and then consider the agreement terminated or should I begin the process earlier?

Thanks

Grumpy_chap

minx79 said:

When I send the letter for VT, do I then just not pay any further payments? I was going to send it in June, make the final payment in July and then consider the agreement terminated or should I begin the process earlier?

Thanks

Sorry, I can't help as I am not knowledgeable on the exact workings of the process.
I am sure someone will be along shortly who can comment in more detail on exactly how and when VT can be invoked.

You need to be sure that the process is accepted as VT and not voluntary surrender, assuming you do go ahead with VT.

From other threads on here, VT is often not the most favourable outcome.
Why are you not willing to consider the alternatives?

minx79

Grumpy_chap said:

minx79 said:

When I send the letter for VT, do I then just not pay any further payments? I was going to send it in June, make the final payment in July and then consider the agreement terminated or should I begin the process earlier?

Thanks

Sorry, I can't help as I am not knowledgeable on the exact workings of the process.
I am sure someone will be along shortly who can comment in more detail on exactly how and when VT can be invoked.

You need to be sure that the process is accepted as VT and not voluntary surrender, assuming you do go ahead with VT.

From other threads on here, VT is often not the most favourable outcome.
Why are you not willing to consider the alternatives?

The car is currently not worth the amount on finance and I have checked prices on wbac and motorway and it would not clear the finance owed. I wish had never bought it but it was a rush buy because our main vehicle was off the road and we needed a quick alternative. Now proving to be a bad choice. 

I have asked for a settlement figure this evening to check but I still don't think wbac/motorway would clear what is owed.

Grumpy_chap

Usually, the "Settlement Figure" is less than the "Finance Owed".
This is because "Settlement Figure" is to pay off now with no further interest accruing (subject to the notice term for early repayment) whereas "Finance Owed" usually assumes the agreement runs full term and hence further interest accrues.

minx79

Grumpy_chap said:

Usually, the "Settlement Figure" is less than the "Finance Owed".
This is because "Settlement Figure" is to pay off now with no further interest accruing (subject to the notice term for early repayment) whereas "Finance Owed" usually assumes the agreement runs full term and hence further interest accrues.

Thanks but from what I have heard about the finance company I am with, their "settlements" are usually not very good either.... I will update when I hear from them

MrFrugalFever

To be absolutely certain on your rights you should consult your Finance documentation but generally as a rule, personal Hire Purchase agreements are regulated by the Consumer Credit Act 1974 (s.69 applies to VT/VS) and therefore your right to Voluntarily Terminate should come in to play. There are some exceptions to this rule such as if the finance has been taken out via a business / sole trader or if the finance is a fixed sum loan.

Once 50% of the Total Amount Payable (that will be clearly outlined on your finance documentation) has been paid then you simply exercise your right to Voluntarily Terminate either by email or verbally. Remember to say the word Terminate and NOT Surrender. Surrender is akin to defaulting and will have a negative affect on your credit history.

It is also worth noting that finance companies often charge a fee (i've seen up to £100) for Voluntarily Terminating an agreement and they will effectively treat it like a Lease Agreement hand back so the BVRLA Guide to fair wear and tear should be read in order to understand what may be picked up as chargeable damage. Trying to prove what was / wasn't there at time of purchase being an older / higher mileage car could prove to be tricky. The car having outstanding faults could also impact on the arrangement to terminate too.

I would suggest this be a last resort and you explore other options such as selling the car for as much as you can get and settling the negative equity and starting again.

superbigal

Make sure you have kept to the current agreed payment schedule. Any late payments etc may make VT not an option.

~Brock~

You should be aware that you can voluntarily terminate the agreement at any time.  You do not need to have paid 50% before you can do this.  If you VT before you have paid 50% then you remain liable for the outstanding difference to bring you up to the 50% mark.  Any outstanding arrears at the point of VT will also be included in the outstanding amount.

I often see comments that assume that you cannot VT until 50% has been paid.  This is incorrect.