Finance on a lemon

geemantra

I purchased a car from Essex Trade Centre back in October of 2006 and have had a nightmare ever since. To be very brief, the car is an 03 plate and came with all sorts of guarantees and 120 point checks that satisfied me so I took a hire Purchase finance agreement. I pay £203/month. The car is a lemon! The engine has been replaced already and now needs to be replaced again. The Head Gasket has been replaced twice. The electrics are shot. The radiator gone etc etc. The mechanics are family friends so I know i'm not being duped in this respect. In short it has cost over £5000 to sort and that sum is growing. The dealership were cowboys and have since ceased trading without resolving my problems (this was part of the lookers group incidentally, so be warned!!)
The car is currently on a garage forecourt with the engine in the boot and i'm still paying finance. I cant afford the 1800 it will now cost to fix and I don't want to pay for a car that's not usable. I know there is a section of the 1974 consumer credit act that covers the finance company's liability in view of unsatisfactory goods but does this qualify? I would gratefully appreciate some advice. The finance is in my name but the car is owned by my ex-partner who relies on it to transport our 3 under 3s. Many thanks if you can

Horace

I am not sure myself but I would have thought that you could contact Trading Standards, after all you were sold a pup by the sounds of it.

geemantra

To be honest trading standards were a little bit less than useless particularly as the trade centre were indifferent to any threats. Really been entirely isolated on this issue despite asking the bodies who purport to be there to help!

standupguy

Section 75 of the Consumer Credit act is the one you are looking for.

This states that the Finance company has joint liability for the quality of the car.

Write a letter of complaint -detailing everything from the start -to the Finance company mentioning section 75 of the consumer credit act and send a copy to the dealer.

Then sit back and see what happens!

geemantra

The finance company have responded to my concerns by telling me that they do not have responsibility. What can anyone suggest. I am now carless and will have to pay 203 a month for the next 2 years. Im desperate for any assistance

standupguy

If the agreement is Hire Purchase then section 75 of the CCA definitely applies.

Have you had their response in writing or is this just verbal?

It sounds like they are just trying to fob you off in order to make the complaint go away.

What they probably mean is that you have had the car a long while and it is just "the joys of motoring" - but this does not excuse their liability if it can be shown it was a dud car from the start

ALIBOBSY

isn't there a rule for hp where if you have paid a certain amount of the loan back (50% rings a bell), you can hand the keys back to the hp company and walk away? not sure how this works if the vehicle no longer works tho.
ali x

xxlaurissaxx

ALIBOBSY wrote: »

isn't there a rule for hp where if you have paid a certain amount of the loan back (50% rings a bell), you can hand the keys back to the hp company and walk away? not sure how this works if the vehicle no longer works tho.
ali x

I was wondering the same thing as i have less than a year left with mine and was wondering if i should hand it back. Will this affect my credit rating? I has a few dents in it but overall its a great wee car.
Any help will be appreciated.

xx

standupguy

This is known as the half rule.

Add up your deposit and all of the payments you have made.

If this total is more than half the Hire purchase price (this figure is actually shown on your HP agrrement), then you can voluntary terminate your agreement and hand the car back to the Finance Company.

You will have nothing further to pay if you have no arrears of payments and the car is of reasonable quality for its age.

In this particular case there are serious problems with the car so it is highly likely the Finance Company would not want to accept a voluntary termination and if they did, would bill you for the repairs.

Regarding your credit rating it should have no impact as you are just exercising a term on the agreement but in practice you may find it difficult to get further HP on a car without putting down a large deposit.
This is because usually when hirers return cars there is negative equity and future lenders will not want to be making losses - and of course you could do this again - so they will want to make sure that any lending is always much less than the value of the car.

xxlaurissaxx

standupguy wrote: »

This is known as the half rule.

Add up your deposit and all of the payments you have made.

If this total is more than half the Hire purchase price (this figure is actually shown on your HP agrrement), then you can voluntary terminate your agreement and hand the car back to the Finance Company.

You will have nothing further to pay if you have no arrears of payments and the car is of reasonable quality for its age.

In this particular case there are serious problems with the car so it is highly likely the Finance Company would not want to accept a voluntary termination and if they did, would bill you for the repairs.

Regarding your credit rating it should have no impact as you are just exercising a term on the agreement but in practice you may find it difficult to get further HP on a car without putting down a large deposit.
This is because usually when hirers return cars there is negative equity and future lenders will not want to be making losses - and of course you could do this again - so they will want to make sure that any lending is always much less than the value of the car.

Do you mean the dents are a serious problem? Its 8 yrs old and has a couple of small dents and a not so small one at the drivers door and a small burn mark in the back seat. D you think they will say no to because of this?

The car cost me £3600, I put down £600 deposit and took out £3000 finance, I have already paid over twon years of £105 pcm. Do you think this is more than half?

xx

standupguy

No, I was referring to Geemantra's issue - the original poster

xxlaurissaxx - your dents should not be an issue as these would be fair wear and tear for its age. You would need to ask your lender for a settlement figure and then compare this to the value of the car.

If the car is worth more than the settlement you are better off keeping the agreement going.

If it is worth much less than the settlement then you could consider vt

You need to calculate whether you have paid a half by adding up the deposit and payments you have made and comparing this to the half hire purchase price figure on your agreement