Voluntary Termination?

Voluntary Termination?

Author
Discussion

squeezebm

2,319 posts

204 months

Sunday 19th August 2012
quotequote all
I've got 2 all roads on contract hire thru Audi/vw finance (work tools) we are both bored of them , and are over half way thru the c/h period ,which was taken out in Dec 2010 ends Dec 2013, can't find anything on this 50% hand back option in the paperwork so called the finance company to be told that we are required to pay about £4350 + vat on each vehicle to end agreement. Does anybody know if this is correct?

Cheers

northandy

3,495 posts

220 months

Sunday 19th August 2012
quotequote all
squeezebm said:
I've got 2 all roads on contract hire thru Audi/vw finance (work tools) we are both bored of them , and are over half way thru the c/h period ,which was taken out in Dec 2010 ends Dec 2013, can't find anything on this 50% hand back option in the paperwork so called the finance company to be told that we are required to pay about £4350 + vat on each vehicle to end agreement. Does anybody know if this is correct?

Cheers
Sounds like you have a lease, rather than pcp or hp. I guess the 4,350 is the value of the rest of the lease payments.

rsv gone!

11,288 posts

240 months

Sunday 19th August 2012
quotequote all
My brother had a 106 on finance. He even had a prang in it and had to replace the bonnet. As he wasnt fully comp he did this on the cheap and didnt even paint it. It was left in primer black.

He VT'd it and they took it away. He never heard any more. This was 2005.

Deva Link

26,934 posts

244 months

Sunday 19th August 2012
quotequote all
wargriff said:
If you 'VT' a contract you wont be liable for the excess mile charge. The excess charge is if the car is returned to the finance house at contract end on a PCP.
HP allows you to 'VT' the vehicle as soon as 50% of the total cost has been paid. This total cost includes deposit/part exchange. The figure is detailed in the contract under 'termination rights'
Yes, and a key part of the law is that there's nothing more to pay - the whole point of it is to allow consumers to walk away with a clean slate.

Finance companies are on very dodgy ground if they try to add on extra charges.

Deva Link

26,934 posts

244 months

Sunday 19th August 2012
quotequote all
squeezebm said:
I've got 2 all roads on contract hire thru Audi/vw finance (work tools) we are both bored of them , and are over half way thru the c/h period ,which was taken out in Dec 2010 ends Dec 2013, can't find anything on this 50% hand back option in the paperwork so called the finance company to be told that we are required to pay about £4350 + vat on each vehicle to end agreement. Does anybody know if this is correct?

Cheers
I'm always dismayed by how people misunderstand PCP deals (I feel PCPs are a scam by the industry aimed at the unwary) but how on earth could you have misunderstood contract hire?

squeezebm

2,319 posts

204 months

Tuesday 21st August 2012
quotequote all
Deva Link said:
I'm always dismayed by how people misunderstand PCP deals (I feel PCPs are a scam by the industry aimed at the unwary) but how on earth could you have misunderstood contract hire?
So you don't have an answer but thought you would post a question anyhows rolleyes

Thanks for that

Why is there so many dheads on ph biggrin
Oh and FYI both All roads are being replaced next month and we have not had to clear the £4300

Deva Link

26,934 posts

244 months

Tuesday 21st August 2012
quotequote all
squeezebm said:
So you don't have an answer but thought you would post a question anyhows rolleyes
It had already been answered. And you still didn't answer my question. wink

squeezebm said:
Oh and FYI both All roads are being replaced next month and we have not had to clear the £4300
How come you didn't have to pay? You did well there - contract hire companies are not known for their flexibility.

johnfm

13,668 posts

249 months

Wednesday 22nd August 2012
quotequote all
squeezebm said:
Deva Link said:
I'm always dismayed by how people misunderstand PCP deals (I feel PCPs are a scam by the industry aimed at the unwary) but how on earth could you have misunderstood contract hire?
So you don't have an answer but thought you would post a question anyhows rolleyes

Thanks for that

Why is there so many dheads on ph biggrin
Oh and FYI both All roads are being replaced next month and we have not had to clear the £4300
Pretty hard for anyone here to answer your question if you can't tell us what type of finance arrangement you had on the cars.

tomellingham

71 posts

164 months

Friday 23rd November 2012
quotequote all
Hi chaps,

Just trying to make sure I am calculating my figures right. I've an HP Agreement on a BMW. The total amount I have to pay is £21,557.23, the VT amount is £10,778.63 (50%) of amount payable.

Do I just add together all the monthly payment I have made so far to see how much I have paid back? For instance, if I pay £400 a month, after 27 months I have paid £10,800 and could then VT?

Cheers,

Tom

MEC

2,604 posts

272 months

Friday 23rd November 2012
quotequote all
tomellingham said:
Hi chaps,

Just trying to make sure I am calculating my figures right. I've an HP Agreement on a BMW. The total amount I have to pay is £21,557.23, the VT amount is £10,778.63 (50%) of amount payable.

Do I just add together all the monthly payment I have made so far to see how much I have paid back? For instance, if I pay £400 a month, after 27 months I have paid £10,800 and could then VT?

Cheers,

Tom
yes, but also include any deposit paid.

tomellingham

71 posts

164 months

Friday 23rd November 2012
quotequote all
MEC said:
tomellingham said:
Hi chaps,

Just trying to make sure I am calculating my figures right. I've an HP Agreement on a BMW. The total amount I have to pay is £21,557.23, the VT amount is £10,778.63 (50%) of amount payable.

Do I just add together all the monthly payment I have made so far to see how much I have paid back? For instance, if I pay £400 a month, after 27 months I have paid £10,800 and could then VT?

Cheers,

Tom
yes, but also include any deposit paid.
I paid a £1k deposit but this doesn't seem to be reflected in the credit agreement under 'advance payment'...

RacerMDR

5,470 posts

209 months

Friday 23rd November 2012
quotequote all
interesting thread - thanks for starting it.

I too have looked at VT on my M3......essentially because i can lease a new one for less than the loan repayments!

They were a bit anti on the phone, and have sent me the biggest form in the world to fill in.

They have indicated the car will be taken away, and I'll be charged for wear and tear, non servicing (there isn't any) and any damage.

I seriously got the feeling it was to put me off........

although technically i'm not halfway through the money agreement yet, but will be in 3 months.....

I think i'll hand it back and get a new one as i'm in a different financial position (better) than I was when i took the deal.

As to sell the car......private.......then pay it off -i'd be 3k worse off than to just hand it back, equally if i let if go full term i'll be much worse off.

So i'll can it and start again

tomellingham

71 posts

164 months

Friday 23rd November 2012
quotequote all
Same here Racer, effectively I rushed out of one HP when I bought a flat and in to another to get my hands on a more fuel efficient car. I'm currently paying through the nose for an older, less well spec'd car where the value is some 4k less than the settlement figure. This is the way out for me, as I have another 18 months before the agreement is up.

I've VT'd a car before and the process wasn't too bad, although it was via a third party finance provider rather than manufacturer, so not sure how the processes will differ. I got invoiced for a stonechip and that was it.

Deva Link

26,934 posts

244 months

Friday 23rd November 2012
quotequote all
RacerMDR said:
They were a bit anti on the phone, and have sent me the biggest form in the world to fill in.

They have indicated the car will be taken away, and I'll be charged for wear and tear, non servicing (there isn't any) and any damage.

I seriously got the feeling it was to put me off........
They're on iffy ground if they try to load on extra charges - the idea behind VT is to allow consumers to walk away with nothing more to pay as long as you've taken reasonable care of the car. I suspect "reasonable care" under the law is a lot lower standard than some finance companies, especially a couple of manufacturer owned ones, would try to apply.

Mo D

261 posts

154 months

Friday 23rd November 2012
quotequote all
Great thread. I'm seriously thinking of doing this in May next year for my 330d. Getting tired of the payments and the constant bills, warning lights etc. But it has been good, done 35,000 miles in 1.5 years so far (at a cost of nearly 2k in servicing, but that's BMW dealer for you, and a rear tyre being punctured weeks after being changed, £180, ouch).

My question is - it has a sizable scratch on the left side door, and on the front right bumper, both parking dings from yours truly. I am thinking of getting them fixed at a cost of 1 or £200 at a local garage, the temptation is to just leave it as others have done above? The rear cigarete box is broken too (don't ask how). Its not perfect condition by any means, so should I be worried? Do I need to spend £100s to get it to as good a conditiuon as it was when I bought it?

Its with BMW finance btw - that may affect the answers.

rfoster

1,482 posts

253 months

Wednesday 28th November 2012
quotequote all
Mo D - BMW Finance, as with all decent lenders, will adhere to the BVRLA standards for fair wear & tear (you can google it). Some scratches are acceptable - if they've gone through the paint down to the primer or are over a certain length then you would be re-charged. The dent would be chargeable too. They also have strict guidelines on how much they can charge for dehire damage.

Echoing some of the comments above - on a hire purchase arrangement you can terminate without fear of excess mileage charges (unless there is something written into the contract on this, but I haven't seen a regulated HP agreement with a mileage clause yet.)

However on PCP arrangements there is a mileage allowance - which is used by the finance company to calculate the size of the guaranteed future value. If you VT a PCP agreement then the finance company do have the right to charge excess mileage pro-rata to the agreed contractual mileage. For example if you terminated a 4 year PCP after 3 years with a total contract mileage of 40,000, and you hand it back with 50,000 miles on, then the finance company can charge for excess mileage as follows:

Total contract mileage: 40,000 over 48 months
Termination at month 36; pro-rata mileage covered should be 30,000

So the finance company can charge you 20,000 miles (actual mileage 50,000 less contract mileage 30,000) in excess mileage. The charges for excess mileage are always shown on a PCP agreement.

big_boz

1,684 posts

206 months

Wednesday 28th November 2012
quotequote all
OP, Have you actually spoken to Santander about VT'ing and clarified the situation.

Is your finance a Santander Agreement or an Ex-GE agreement that Sanatader bought? When it was GE i know (as i saw it a few times) that people would just tip up to the office and lob the keys at Security, shout VT, and leave the car abandoned in the car park, often in a less that perfect state.

These would just get sent to Auction.

I would suggest you contact Santander IN WRITING (I wouldn't trust the phone monkeys) and ask for a written confirmation of the exact criteria that is applicable to you based on your agreement. Also I would suggest that you ask for a copy of the signed fiance agreement from them, If you enclose a cheque for £10 and request for it under a "Data Subject Access Request" then they will have to send you it (and all other written record pertaining to your account), and probably wont cash the cheque anyway.

If you are lucky they may have lost the agreement, if that's the case (which is more likely than you might imagine) then you can tell them to do one if there is any come back. They won't chase you as they would have no legal standing if it ever went to court.

Also if they start cocking about threaten to raise the issue with the Banking ombudsman, that will incur them a £600 fine which they will want to avoid. This fine is valid regardless of if it has any basis, ie even if you are in the wrong, so if they have the choice of charging you a few hundred quid relating to the VT and getting a £600 fine, or just letting you walk away, they will do the latter.


Edited by big_boz on Wednesday 28th November 15:55

Mo D

261 posts

154 months

Wednesday 28th November 2012
quotequote all
rfoster said:
Mo D - BMW Finance, as with all decent lenders, will adhere to the BVRLA standards for fair wear & tear (you can google it). Some scratches are acceptable - if they've gone through the paint down to the primer or are over a certain length then you would be re-charged. The dent would be chargeable too. They also have strict guidelines on how much they can charge for dehire damage.

Echoing some of the comments above - on a hire purchase arrangement you can terminate without fear of excess mileage charges (unless there is something written into the contract on this, but I haven't seen a regulated HP agreement with a mileage clause yet.)

However on PCP arrangements there is a mileage allowance - which is used by the finance company to calculate the size of the guaranteed future value. If you VT a PCP agreement then the finance company do have the right to charge excess mileage pro-rata to the agreed contractual mileage. For example if you terminated a 4 year PCP after 3 years with a total contract mileage of 40,000, and you hand it back with 50,000 miles on, then the finance company can charge for excess mileage as follows:

Total contract mileage: 40,000 over 48 months
Termination at month 36; pro-rata mileage covered should be 30,000

So the finance company can charge you 20,000 miles (actual mileage 50,000 less contract mileage 30,000) in excess mileage. The charges for excess mileage are always shown on a PCP agreement.
Thanks for that, Rfoster. Helpful re the scratches and dent. I'll probably fix the dent and the scratch, as with the front bumper one, the paint was completely gone in, and a black mark is there as a result.

I'm in two minds though regarding keeping it or VT'ing it (more so after forking out £720 for 4 continental sport contact tyres, and getting a new turbo under extended warranty, and all sort of other warranty work, all at £250 a pop for the bloody excess). The thinking being I wouldn't be getting value for money for the shed load I spent on it in the past 18 months. But it is good advice re the VT anyway.



mercGLowner

1,668 posts

183 months

Sunday 5th May 2013
quotequote all
I am at the stage where I now want to VT my Mini Cooper Auto. There is only 6 months left to run on the 4 year PCP finance deal, but the settlement figure is £9100 and the CAP/Glass's valuation is about £7500. Am wanting a new vehicle which is suitable to insure for my 17 yo son.

I spoke to the relevant department at BMW/Mini financial services yesterday, the lady was rather cold in her tone and was quick to point out that a VT mark would be put on my credit file and that it would most certainly mean that BMW would not offer me any preferential Finance rates in the future, including the headline subsidised APR rates. Whilst I am not planning to buy another BMW/Mini in the near future, I am a little concerned about the wider effect of having a 'VT' mark against my name for credit purposes.

I know that officially VTing does not adversely effect your credit rating, does it in practice? I am hoping to move house next year and the last thing I want is to have a mortgage application declined for an unknown reason.

Loads of information on the Internet/Google, but I am slightly nervous and am actually considering just biting the bullet and seeing the deal out to the end in November.

BE57 TOY

2,628 posts

146 months

Sunday 5th May 2013
quotequote all
squeezebm said:
I've got 2 all roads on contract hire thru Audi/vw finance (work tools) we are both bored of them , and are over half way thru the c/h period ,which was taken out in Dec 2010 ends Dec 2013, can't find anything on this 50% hand back option in the paperwork so called the finance company to be told that we are required to pay about £4350 + vat on each vehicle to end agreement. Does anybody know if this is correct?

Cheers
Contract hire is a lease and you can't VT a lease.

It most be hire purchase or PCP.

Hope this helps.