Voluntary termination of car finance

Voluntary termination of car finance

Author
Discussion

duckers26

Original Poster:

992 posts

174 months

Tuesday 31st July 2012
quotequote all
I have a PCP contract where the value of the car is £16k and finance outstanding is £19k. I want to change the car and as I have made more than 50% of the payments can hand the keys back with no more to pay. Is there any consequence of doing this? I am only exercising my rights under CCA so should be ok?

duckers26

Original Poster:

992 posts

174 months

Tuesday 31st July 2012
quotequote all
Ignore other thread running. Blame PH error message

valiant

10,300 posts

161 months

Tuesday 31st July 2012
quotequote all
It's half way of the TOTAL outstanding balance. With PCP schemes that is usually near the end of the finance term.

Check your paperwork as they usually provide guidelines on what you have to pay back or give them a ring for a settlement figure.

BE57 TOY

2,628 posts

148 months

Tuesday 31st July 2012
quotequote all
It leaves a mark on your credit history but I am lead to believe not a serious one ie nowhere near as bad as defaulting on a payment.

If you have a strong credit history then I wouldn't worry about it.

Remember with PCP you'll need to be within the mileage to VT without a penalty.

McHaggis

50,625 posts

156 months

Tuesday 31st July 2012
quotequote all
Why does it it leave a mark on your credit history if it is a termination that is mutually agreed and all monies are paid in time?

duckers26

Original Poster:

992 posts

174 months

Tuesday 31st July 2012
quotequote all
valiant said:
It's half way of the TOTAL outstanding balance. With PCP schemes that is usually near the end of the finance term.

Check your paperwork as they usually provide guidelines on what you have to pay back or give them a ring for a settlement figure.
£56 beyond the halfway point!

SV8Predator

2,102 posts

166 months

Tuesday 31st July 2012
quotequote all
BE57 TOY said:
It leaves a mark on your credit history
It certainly does not affect your credit history! You are merely following the 'terms and conditions' and ending the agreement in a correct manner.

They don't like it, but it's in the terms.

duckers26

Original Poster:

992 posts

174 months

Tuesday 31st July 2012
quotequote all
SV8Predator said:
It certainly does not affect your credit history! You are merely following the 'terms and conditions' and ending the agreement in a correct manner.

They don't like it, but it's in the terms.
That's good to know. Car is not used more than 2k miles per year as we commute to work by train but didn't fancy losing 3k to get out of the agreement!

BE57 TOY

2,628 posts

148 months

Tuesday 31st July 2012
quotequote all
SV8Predator said:
It certainly does not affect your credit history! You are merely following the 'terms and conditions' and ending the agreement in a correct manner.

They don't like it, but it's in the terms.
It is in the terms but that's by the by.

It leaves a marker saying you have VT'd and lenders don't like this.

Put 2 and 2 together....

It's not a good marker to have.

BE57 TOY

2,628 posts

148 months

Tuesday 31st July 2012
quotequote all
SV8Predator said:
It certainly does not affect your credit history! You are merely following the 'terms and conditions' and ending the agreement in a correct manner.

They don't like it, but it's in the terms.
It is in the terms but that's by the by.

It leaves a marker saying you have VT'd and lenders don't like this.

Put 2 and 2 together....

It's not a good marker to have.

SSBB

695 posts

157 months

Tuesday 31st July 2012
quotequote all
McHaggis said:
Why does it it leave a mark on your credit history if it is a termination that is mutually agreed and all monies are paid in time?
They only agree because they are forced to by legislation. Doesn't mean they have to like it.

northandy

3,496 posts

222 months

Tuesday 31st July 2012
quotequote all
valiant said:
It's half way of the TOTAL outstanding balance. With PCP schemes that is usually near the end of the finance term.

Check your paperwork as they usually provide guidelines on what you have to pay back or give them a ring for a settlement figure.
Not in my experience, 50% point came at 30 months of a 48 month deal.

Check for excess mileage rate, if its a bmw they seem pretty fair when it comes to wear and tear, and badly kerbed wheels etc will cost you though.

McHaggis

50,625 posts

156 months

Tuesday 31st July 2012
quotequote all
SSBB said:
They only agree because they are forced to by legislation. Doesn't mean they have to like it.
I'm still confused that they then have the right to mark your record if it is by mutual consent.

Mr2Mike

20,143 posts

256 months

Tuesday 31st July 2012
quotequote all
BE57 TOY said:
It is in the terms but that's by the by.

It leaves a marker saying you have VT'd and lenders don't like this.

Put 2 and 2 together....

It's not a good marker to have.
http://www.experian.co.uk/consumer/questions/askja...

Ekona

1,653 posts

203 months

Tuesday 31st July 2012
quotequote all
I did this back in 2003 with a Focus. There's nothing on my credit report (via Experian) that mentions this. There may be something else out there showing it, but I can't see it and I've had 4 other cars on finance since then without issue.

duckers26

Original Poster:

992 posts

174 months

Tuesday 31st July 2012
quotequote all
Mr2Mike said:
Companies must treat customers fairly under FSA rules. Surely penalising someone for exercising their legal rights doesn't sound like it. It may be recorded but they can't take that information into account.

BE57 TOY

2,628 posts

148 months

Tuesday 31st July 2012
quotequote all
duckers26 said:
Companies must treat customers fairly under FSA rules. Surely penalising someone for exercising their legal rights doesn't sound like it. It may be recorded but they can't take that information into account.
They don't penalise anyone. They mark that the person has done a VT - which is true.


duckers26

Original Poster:

992 posts

174 months

Tuesday 31st July 2012
quotequote all
BE57 TOY said:
They don't penalise anyone. They mark that the person has done a VT - which is true.
But if they can't use that bit of information why does it matter having it recorded?

SSBB

695 posts

157 months

Tuesday 31st July 2012
quotequote all
McHaggis said:
SSBB said:
They only agree because they are forced to by legislation. Doesn't mean they have to like it.
I'm still confused that they then have the right to mark your record if it is by mutual consent.
Ultimately your credit record isn't some kind of record the government holds on you, it's a system run by private companies, although regulated by the FSA. Termination isn't by mutual consent, you "give notice" to the creditor.

Also note, Section 100 of the CCA says:

"If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly."

You do have an obligation to have taken "reasonable care" of the car. They can pursue you for further payment if they believe your neglect has reduced the value of the car.

I'm not a lawyer, so all the above is only my understanding, and not first hand experience.

duckers26

Original Poster:

992 posts

174 months

Tuesday 31st July 2012
quotequote all
SSBB said:
Ultimately your credit record isn't some kind of record the government holds on you, it's a system run by private companies, although regulated by the FSA. Termination isn't by mutual consent, you "give notice" to the creditor.

Also note, Section 100 of the CCA says:

"If the debtor has contravened an obligation to take reasonable care of the goods or land, the amount arrived at under subsection (1) shall be increased by the sum required to recompense the creditor for that contravention, and subsection (2) shall have effect accordingly."

You do have an obligation to have taken "reasonable care" of the car. They can pursue you for further payment if they believe your neglect has reduced the value of the car.

I'm not a lawyer, so all the above is only my understanding, and not first hand experience.
Car has only done 6000 miles in 28 months so condition is good!