advice please car finance and paid cancelled direct debits

juliag

Hi there please can anyone advise me on the following, audi a2 bought for 14000 2 years ago having problems with repayments now 2 months in arrears at £264 a month due to losing job and now having a less paid one. we have had this car on garage forecourt for 2 months trying to sell it and have just written to audi offering them £100 a month until car sells or our circumstances change and we can continue as normal.

Audi has sent back letter rejecting our offer giving us 2 weeks to sell car or will issue default notice, incidentally has just taken 1 months payment from our bank even though we stopped direct debit 2 months ago.

I was under the impression that if you offered to pay something they couldnt refuse it and secondly our bank barclays has said we have no control over who takes money from our account if they request , it they have it, even if we have cancelled direct debit please any advice? by the way still owe 10994 on it thanks julia :eek:

MarkyMarkD

If (and only if) you are genuinely paying this loan by direct debit, Barclays are talking rubbish and you can demand that they refund the money to you under the direct debit guarantee.

If you are agreeing by continuous payment authority on a debit, or credit, card, then they are right and you can't stop payment by notifying the bank. But if you notify Audi Finance that you can't pay, they shouldn't take money under any payment authority.

If your car has been on a forecourt for 2 months, you are asking too much. If you are seriously unable to pay the debt, you should auction it and you'll have the money in a few weeks, rather than a few months. Alternatively some dealers would let you part exchange for a cheaper car, and pay you the difference, but that probably wouldn't be sufficient to eliminate your current debt (<-- slight understatement, I fear).

Xbigman

You say you cancelled the direct debit. Was this with the bank? If it was with the bank then they must repay you the money and any charges.
If however you told the finance company to stop using the direct debit but didn't tell the bank you are on much shakier ground. If theory the bank should still repay you but in practice they won't want to know.
Regards




X

billywhizz

Check your contract. Without knowing the facts but assuming it is a straight Hire Purchase you may be entitled to return the vehicle, but you will have to pay any arrears payments and will have to have paid over half the total amount.

As for selling the car have you thought of Ebay. As long as you are careful and accept cash etc this is proving to be a good way of selling cars.

Finally speak to the finance company and see if they will do a deal on the settlement figure, explain the situation patiently and give them a sensible estimate of what you can get for the car if you sell it. The other thing to bear in mind is that I'm pretty sure you have to be 2 or more payments in arrears for a default notice to be issued(Although its been a while since I was issuing default notices and repossessing cars). But assuming you are 2 in arrears and that payment does go through £100 per month will buy you 2 more months, just send them a cheque, they are obliged to bank it.

As bad debt levels increase I think lenders will be forced to take more sympathetic attitudes towards assisting those in trouble, but at present there is a definite "tough we're the boss" attitude from all of them.

MarkyMarkD

billywhizz wrote:

Check your contract. Without knowing the facts but assuming it is a straight Hire Purchase you may be entitled to return the vehicle, but you will have to pay any arrears payments and will have to have paid over half the total amount.

... which she hasn't, billy, as she said in the OP.

tomstickland

Looks like you need to sell the car. Look on Autotrader and in the Parkers guide for a reaslistic price and sell it privately for the book price (realistic price). Then I assume you can reduce the amount owed to a manageable level.

eurows

Send it to the auction and cut your loses.

eurows

As bad debt levels increase I think lenders will be forced to take more sympathetic attitudes towards assisting those in trouble, but at present there is a definite "tough we're the boss" attitude from all of them.

You must be kidding. This is similar to the following

House prices won't come down, people will end up in trouble. The government won't allow it

When things get tough and they inevitably will. The courts and bailiffs get busier and the banks get tougher. Outherwise they go under

billywhizz

eurows wrote:

You must be kidding. This is similar to the following


House prices won't come down, people will end up in trouble. The government won't allow it

No it's not, paying off your car/house payments has nothing to with the government, nor do I think that if you can't pay some authority should help you out.

What I was trying to say, maybe not clearly, is that if you are faced with an offer of £100 against a payment of £264 or taking to County Court to get Judgement for £20 per month then maybe a sensible collections manager would take the higher repayment option. Yes I am generalising for the industry but having been a collections manager and sat in many County Courts on behalf of a finance company I know how well we are received, trust me, we're not popular.

There does come a time when you have to get a CCJ to secure the debt however, but making some effort to help the debtor in the early stages works on all sorts of levels for me. When bad debt levels are low, which in the indsutry they are at present then it is easy to sue everyone who defaults. Issuing a summons will normally trigger a percentage write off of the debt to bad debt, when levels are low you can take this write off easily.

As they rise you have to take a more pragmatic view of collection, writing everything off to bad debt by issuing proceedings will have a bigger impact on the business and it's profitablility, especially against the flip side of lending levels falling and profitability falling from sales accordingly.

Debt_Free_Chick

Are you sure you can sell the car? Currently, it belongs to the finance company. Beware, that they will require a certain payment to be made in order to cancel the debt out. Do you know what this is? If you sell the car for less than the amount the finance company wants, you'll have to find the balance.

And yes, lenders can refuse an offer to pay less. They are entitled to insist that you stick the repayments stated on the agreement.

Read THIS from the National Debtline about dealing with HP debt.

HTH