HP agreement in Scotland

rufio316

Hi all,

Wonder if anyone can help...

I've currently got a straight forward HP agreement on my car e.g no balloon payment etc etc....at the end of the term I will own the car outright. At the moment I'm half way through the 4 year agreement so have half of the loan still to pay.....about £5k

The car is worth roughly £5.5k privately but is giving me grief and I would really like rid of it. I have been told that under Scottish law you can hand back the car to the finance company and walk away if you've paid more than 50% of the agreement???

Is it as straight forward as this, will my credit rating be shot to bits if I attempt this?


Thanks,

dannynixon

Check your terms and conditions but I think you can simply hand it back and walk away. Check the t&c's first

standupguy

The law in Scotland is the same as in England in that you have a statutory right to return the car once you have paid one half of the hire purchase price - this figure is shown on your copy document.

You should contact the Finance company and state that you wish to return the vehicle under the "half rule".

Providing you have paid half the hire purchase price and the vehicle has no damage other than fair wear and tear for its age you should have nothing further to pay.

This must not affect your credit rating as this is your statutory right under the agreement.

In practice what you may find is that the Finance company note your file with the credit reference agencies as "vt" - this stands for account voluntary terminated.

Future lenders must not decline any future applications because of this but you may find you will have to pay higher deposits in future as lenders seek to protect themselves from this happening again.