Does it effect my credit rating ?

BFDPAUL

Evening all, this might have been asked before so if it as i,m sorry. If i terminate a car purchase agreement voluntarily does this reflect on my credit file. Its bad enough paying £395 a month but i might have to terminate it and lose the car and £13000. Yes gauling or what but with two years still to pay and to keep the car a further £7500 balloon payment. Cars have been my undoing over the years and i started to buy this pre LBM. Never buy a car with a no deposit deal, negative equity is there from day one. Rant over and any comments and advice as ever welcome.

Cheers

RAS

Is this a loan or HP?

BFDPAUL

Cheers RAS, yes its an hp agreement. Good or bad ?

RAS

If you read the small print, there will be a clear set of rules about when you can return the car and what the penalties are. Normally you can return it after paying 50 percent, but check the penalties.

You need that as a starting point.

standupguy

Does a voluntary termination reflect on your credit file?

Officially it shouldn't as you are instigating a term on the agreement.
You will find that after you have done this your credit file for this agreement will be noted "vt"

In practice this code alerts future HP lenders that you have done this and they will want to protect themselves from this happening again - so any future Hire Purchase may be subject to a large deposit and/or shorter term so you do not have negative equity or alternatively you may be offered a loan where there is no such termination clause.

BFDPAUL

Thanks for your prompt replies . Looked on the agreement and as long as the 50% payment as been reached it says they will take the vehicle back. As i say it will be 5/6 months before that 50% point is reached so my options are still open. Luckely the debt reduction is going well and to be honest the loss on the agreement would be gauling but i,m looking longer term and know my lessons have been learnt. Its taken me 46 years for the penny to drop and thanks to this site and the "snowball" calculator i,m starting to understand this loan/card and the interest game . If only we could go back and make better decisions !!!!!!.

Thanks all and good luck with all your endeavours:T