Finance hand back.

[Dinoboy]

Am I right in thinking I can return my car to the fiancé company once I've paid half?
Is it half the original purchase price or half the amount financed?

[Dinoboy]

Hehe bloody auto correct.

[Andy_GSA]

Dinoboy said:

Am I right in thinking I can return my car to the fiancé company once I've paid half?
Is it half the original purchase price or half the amount financed?

It's half the total amount payable under the agreement. The agreement itself should give a figure for the total amount payable is, but if you add the deposit to all the payments you have to make, then divide that figure by 2 you get the half-way point. If the agreement is a PCP or other lease purchase agreement don't forget to add in the balloon.

[Dinoboy]

That's great thanks Andy.

[gizlaroc]

It is usually so close to the end of the agreement that you may as well just get a settlement figure.

Say you borrow £30,000 and put down £2k deposit, pay over 36 months with a £12k balloon you will be able to throw the keys back when you hit £14k, that will be at approximately month 30.

[Kinky]

You need to read the small print in the contract as the terms may vary slightly.

But general principle is 50%

[Drek]

gizlaroc said:

It is usually so close to the end of the agreement that you may as well just get a settlement figure.

Say you borrow £30,000 and put down £2k deposit, pay over 36 months with a £12k balloon you will be able to throw the keys back when you hit £14k, that will be at approximately month 30.

But not always. I've done it twice now (although I'd never do it again, the second time my hand was forced somewhat) with at least 18 months left to run. However I suspect most may go for a minimal deposit which bites you in the arse when you get bored with the car after 12 months.

[gizlaroc]

Drek said:

But not always. I've done it twice now (although I'd never do it again, the second time my hand was forced somewhat) with at least 18 months left to run. However I suspect most may go for a minimal deposit which bites you in the arse when you get bored with the car after 12 months.

Obviously, if you have a low ballon and have put a big deposit in, you will be roughly half way through, but most think it is half the contract term, and not half the amount of money due.

[rfoster]

gizlaroc said:

It is usually so close to the end of the agreement that you may as well just get a settlement figure.

Say you borrow £30,000 and put down £2k deposit, pay over 36 months with a £12k balloon you will be able to throw the keys back when you hit £14k, that will be at approximately month 30.

Not quite - it would be when you've paid 50% of the total payable under the agreement, i.e. the £2,000 deposit, the £132 balloon and the 36 x whatever the monthly payment is. If we assumed the monthly payment is £600, and the finance company have document fees of, say, £149 with the first and last payments (typical) then the total payable would be £35,898 and 50% of this would be £17,949 - which you'd hit at month 27.

The higher the final balloon, the later in the agreement that you'll hit 50% of total payments - and conversely, the higher the deposit, the earlier you'll hit it.

[Gio G]

Best way to be sure is to call the finance company customer services to confirm what stage you can VT the car. They receive allot of calls on this subject!

Also, be aware that depending upon the finance company, they will charge for anything over and above fair wear and tear and mileage excess. Your credit file will be marked with the VT and settled. In my experience, it does not effect your rights to get more car finance, however I could be wrong.

[Fast Bug]

Check your finance docs as it will tell you on there. You must have paid 50% of the TOTAL amount repayable to hand the car back. In most cases if you've not hit the 50% mark, you can pay the shortfall and hand the car back.

[gizlaroc]

But often it is worth getting a settlement figure, selling the car and simply settling the finance.
No VT left on your credit record then either.

[Fast Bug]

It's a basic consumer right and therefore your credit score shouldn't be affected. The finance company you've handed the vehicle back to won't be jumping through hoops to lend you money again, but it won't change and credit rating you already have.

[gizlaroc]

It should not affect your credit rating, but it is logged and if you were a lender and you saw that the person you were lending to liked to through the car back at 50% would you maybe give him a higher rate to cover the possibility of it happening again?

[woody2846]

The agreement must be a hire purchase. If the document says personal loan or words to the affect you will not be able to VT.