Voluntary termination of car finance

[Mr2Mike]

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.

That link says the customer should not be penalised, even though the VT may be noted on their credit record.

[duckers26]

Mr2Mike said:

That link says the customer should not be penalised, even though the VT may be noted on their credit record.

So effectively worthless information that no proper institution could use scoring you in the future?

[SSBB]

duckers26 said:

Mr2Mike said:

That link says the customer should not be penalised, even though the VT may be noted on their credit record.

So effectively worthless information that no proper institution could use scoring you in the future?

Let's be clear on the language they are using. Experian (a private company who deal in credit scoring) say that your credit rating should not be affected. They don't seem to mean "should" as in "it shall not be affected", more "in our experience we don't have any evidence that lenders are using this against debtors". Lenders can take this into account. A flag is put on your report that other lenders can see. They can use this as they see fit, Experian reckons it doesn't matter, but they are not the credit police, they are just information brokers.

[duckers26]

SSBB said:

Let's be clear on the language they are using. Experian (a private company who deal in credit scoring) say that your credit rating should not be affected. They don't seem to mean "should" as in "it shall not be affected", more "in our experience we don't have any evidence that lenders are using this against debtors". Lenders can take this into account. A flag is put on your report that other lenders can see. They can use this as they see fit, Experian reckons it doesn't matter, but they are not the credit police, they are just information brokers.

Not really interested in car finance only in remortgaging soonish. As you can't VT a mortgage I guess this isn't relevant to then?

[SSBB]

duckers26 said:

SSBB said:

Let's be clear on the language they are using. Experian (a private company who deal in credit scoring) say that your credit rating should not be affected. They don't seem to mean "should" as in "it shall not be affected", more "in our experience we don't have any evidence that lenders are using this against debtors". Lenders can take this into account. A flag is put on your report that other lenders can see. They can use this as they see fit, Experian reckons it doesn't matter, but they are not the credit police, they are just information brokers.

Not really interested in car finance only in remortgaging soonish. As you can't VT a mortgage I guess this isn't relevant to then?

Not working in the retail banking industry, I'm really not qualified to say. Personally, I would be surprised if this had an impact. It's not like you have missed payments on the finance agreement. It may be worth talking to a mortgage broker or your bank directly.

[duckers26]

Just spoke to Audi finance who the contract is with and they were really helpful. They said there is no consequence of voluntary termination as you are complying with the terms of the contract fully. Termination sum is £56 so versus a probably loss of £3k in negative equity seems a bit of a no brainer!

[cra1gy1989]

I vt'd my car finance last year, audi a3, in my paperwork it said half of the price of the car which in this case was £8000, had to be paid, or 24 out of the 48 months, then the other half could be vt'd, I had to pay a termination fee of 149.00, excess mileage of 350, and because I lost service history book another £350, in the description of fair wear and tear, they could easily chuck another £ 1000 pounds worth of 'damage' for example scuffs on alloys over an inch, scratches to bodywork, rust, stains on seats, wear to seats, or interior, the thing is though after covering half of your finance period, there is bound to be some marks!! But for some reason finance companys want a car back how they gave it, which in my opinion, isn't very likely to happen!

[snorkel sucker]

OP, I'm not sure who Audi use, but I know BMW use:

http://www.bvrla.co.uk/Default.aspx

This may give you an idea of what they may look to charge you for as part of fair wear and tear.

Worth a read to make sure you aren't faced with any suprises should you opt for VT.