Help solve an argument - Voluntary Termination of a Hire Purchase Agreement

daveshoelace

Hi guys

My girlfriend bought a car on finance in the showroom four years ago and attempted to return it within 4 days, which at the time they refused. Obviously as it was in the showroom no cooling off period was given.

However, we have been made aware that under the consumer credit act, if we attempted to voluntarily terminate the agreement and return the car within a week, we would be liable for only half of the agreed price.

In our case the total payable was £120000. The finance company sold the car for £5000 at auction and removed that amount from the amount payable, making us owing £7000.

Now, my girlfriend believes that because of the above rule in the consumer credit act, she is still liable for £6000, rather than £7000, as that is half the original amount. I, however, believe that as we atempted to return the car in 4 days that at that time the debt should have been halved at that time to £6000, and thus when the car was sold for £5000 it should have reduced to £1000.

This is causing a great deal of argument between us and obviously the difference between the two possibilities is tremendous. If anyone can settle this argument for us we will be very appreciative.

regards

JPS29

HI Dave,

I know exactly where you are coming from as i have a car on HP that i will be voluntarily terminating. I will only do this once i have paid the 50% as i dont want to pay for something and not get the benefit of it.

I have the fact sheet from National debtline infront of me re voluntary terminations and here are the quotes, word for word.

"If you decide to terminate your agreement and hand back the goods to the creditor, you should only have to pay upto half of the total amount payable under the agreement, minus sums that you have paid and sums that are due. Sums that you have paid include any deposit plus the instalments that you have paid; sums that are due are any arrears/missed payments due at the time of termination"

The next bit is the bit where i think they will argue the toss with.......

"It is very important that you tell your creditor in writing that you are terminating and ending your agreement. If you do not terminate it in writing the creditor will not treat it as a voluntary termination and you will not be able to benefit from the 50% limit on your liability.

There is also a bit there about damage and wear and tear but i have left this out as I would expect none due to the length of time you had it.

When I VT mine I will be making sure it is all done by recorded mail and copies of the letters, also getting them to confirm in writing it is a VT.

Did you do this? If so you should have no problem. If not i would book to see CAB to see if they can do anything. Or try the national debtline (this is where this leaflet is from) on 0808 808 4000 www.nationaldebtline.co.uk

HTH