Returning car under Consumer Credit Act 1974
Discussion
Hi All,
hoping for a bit of advice/guidance if possible.
I'll start by stating this isn't someone trying to weasel out of his responsibilities, ie changed mind wants a different deal.
A little over two years ago we purchased a new car using a Personal Finance type arrangement whereby we pay a deposit, pay regular monthly payments then at the end have the option to pay the GFV or return the car. Unfortunately my circumstances have changed and I find myself out of work and with a car that is surplus to needs, it is the only item we have with finance so we are looking to reduce our monthly outlay to ensure savings can stretch further with the mortgage.
I'm aware under HPI etc you tend to have a right to return the car after 50% of payments but this arrangement is different.
I've done a bit of digging and looking for some confirmation before I talk to the credit lender, Santander, as knowing my rights up front will make the conversation easier.
Under the CCA1974, the act referred to on the initial paperwork, is there a right to surrender? I've seen that this should be possible and whilst it shouldn't affect my credit rating (which is otherwise as high as a 90s raver) it will put a mark should I seek to buy a car on finance in the future (unlikely).
Could you guys offer any advice?
Cheers
hoping for a bit of advice/guidance if possible.
I'll start by stating this isn't someone trying to weasel out of his responsibilities, ie changed mind wants a different deal.
A little over two years ago we purchased a new car using a Personal Finance type arrangement whereby we pay a deposit, pay regular monthly payments then at the end have the option to pay the GFV or return the car. Unfortunately my circumstances have changed and I find myself out of work and with a car that is surplus to needs, it is the only item we have with finance so we are looking to reduce our monthly outlay to ensure savings can stretch further with the mortgage.
I'm aware under HPI etc you tend to have a right to return the car after 50% of payments but this arrangement is different.
I've done a bit of digging and looking for some confirmation before I talk to the credit lender, Santander, as knowing my rights up front will make the conversation easier.
Under the CCA1974, the act referred to on the initial paperwork, is there a right to surrender? I've seen that this should be possible and whilst it shouldn't affect my credit rating (which is otherwise as high as a 90s raver) it will put a mark should I seek to buy a car on finance in the future (unlikely).
Could you guys offer any advice?
Cheers
AIUI from having had a couple of these agreement, mostly recent with VWFS:
The 50% rule still applies.
You will not get a black mark on your credit record, but you will with the finance company who may then not give you credit again in the future with them. No official mark that they pass to other companies, though.
The details of what you need to have paid to give it back should be on your finance agreement, mine have been. Do you have a copy to look at?
Sorry to hear of your circumstances btw
The 50% rule still applies.
You will not get a black mark on your credit record, but you will with the finance company who may then not give you credit again in the future with them. No official mark that they pass to other companies, though.
The details of what you need to have paid to give it back should be on your finance agreement, mine have been. Do you have a copy to look at?
Sorry to hear of your circumstances btw
Thanks.
The paperwork we got is somewhat lacking but I suppose my next step is to simply call and have the chat. The worry is that the loan is with the same company that does our mortgage, albeit a different entity so I hope it won't impact.
They are getting the car back at the end of the deal anyway as the GFV was over stated and the car is predicted to be worth between 3 to 4k less than the GFV so there will be a glut of them on the used market no doubt in a year or two.
I'll have another look through the paperwork, we are currently just over the 50% or monthly payment mark. The only other fly in the ointment is I have breached the annual mileage but still under the total end target, gone over by approx. 6,000 miles so no doubt will have to pay that off, still it will be cheaper than paying out for it.
The paperwork we got is somewhat lacking but I suppose my next step is to simply call and have the chat. The worry is that the loan is with the same company that does our mortgage, albeit a different entity so I hope it won't impact.
They are getting the car back at the end of the deal anyway as the GFV was over stated and the car is predicted to be worth between 3 to 4k less than the GFV so there will be a glut of them on the used market no doubt in a year or two.
I'll have another look through the paperwork, we are currently just over the 50% or monthly payment mark. The only other fly in the ointment is I have breached the annual mileage but still under the total end target, gone over by approx. 6,000 miles so no doubt will have to pay that off, still it will be cheaper than paying out for it.
Looks like you have a PCP type deal so be aware the 50% rule applies to the total amount owed and on a PCP, this generally is near the end of the finance term.
All depends on your particular deal, though, so get your paperwork out and have a butchers.
I don't think the mileage should be an issue when you VT.
All depends on your particular deal, though, so get your paperwork out and have a butchers.
I don't think the mileage should be an issue when you VT.
That's the problem, we never received the full contract just the Key Facts. I know this to be the case as I commented to the partner at the time, we just never got around to chasing it up. I'll have a double/triple check and see if its been filed elsewhere or just give Santander a call.
The question is when you say 50% of the value owed, is that the value including the GFV? I know, go read the paperwork!
The question is when you say 50% of the value owed, is that the value including the GFV? I know, go read the paperwork!
HTP99 said:
Once you have paid 50% of the total amount payable you can VT (voluntary terminate) the car, it will be in the t's & c's of you finance agreement.
That's if it's a "normal" finance agreement - e.g. £100 down & 48 payments of £300pm. After 24 payments you can VT (I've done it twice). The thing the OP has is where a deposit has gone down & then 47 payments of £200 and a final payment of £4800.northwest monkey said:
HTP99 said:
Once you have paid 50% of the total amount payable you can VT (voluntary terminate) the car, it will be in the t's & c's of you finance agreement.
That's if it's a "normal" finance agreement - e.g. £100 down & 48 payments of £300pm. After 24 payments you can VT (I've done it twice). The thing the OP has is where a deposit has gone down & then 47 payments of £200 and a final payment of £4800.The rule is 50% of the total amount payable, it matters not if it is HP or PCP.
See here http://www.thecarexpert.co.uk/car-finance-voluntar...
Also, you just tried explaing a PCP to a car salesman, He knows what it is
Butter Face said:
They're both the same.
The rule is 50% of the total amount payable, it matters not if it is HP or PCP.
See here http://www.thecarexpert.co.uk/car-finance-voluntar...
Also, you just tried explaing a PCP to a car salesman, He knows what it is
I think he meant the 50% point would be at a different point.The rule is 50% of the total amount payable, it matters not if it is HP or PCP.
See here http://www.thecarexpert.co.uk/car-finance-voluntar...
Also, you just tried explaing a PCP to a car salesman, He knows what it is
In example 1 the £7200 midway point is around month 24, whereas in example 2 it's not until month 36 (depending on the deposit)
mcflurry said:
Butter Face said:
They're both the same.
The rule is 50% of the total amount payable, it matters not if it is HP or PCP.
See here http://www.thecarexpert.co.uk/car-finance-voluntar...
Also, you just tried explaing a PCP to a car salesman, He knows what it is
I think he meant the 50% point would be at a different point.The rule is 50% of the total amount payable, it matters not if it is HP or PCP.
See here http://www.thecarexpert.co.uk/car-finance-voluntar...
Also, you just tried explaing a PCP to a car salesman, He knows what it is
In example 1 the £7200 midway point is around month 24, whereas in example 2 it's not until month 36 (depending on the deposit)
And it's not always as clear cut as paying 24 out of 48 payments, it depends on deposit paid and rate etc too but it's normally pretty close.
Butter Face said:
He didn't explain his point very well, it looked like he was saying it's different rules on a PCP to me.
And it's not always as clear cut as paying 24 out of 48 payments, it depends on deposit paid and rate etc too but it's normally pretty close.
The rules are the same, but the payment schedule means it works out quite differently in practice, and it's generally explained terribly by most dealerships in their rush to get your signature.And it's not always as clear cut as paying 24 out of 48 payments, it depends on deposit paid and rate etc too but it's normally pretty close.
It will be pretty close to halfway through the term if it's a Hire Purchase, not if it's a PCP. Sometimes it may only be a few months before the end of the agreement - especially if you have a relatively short term (3 years or less) on a car with a strong residual value.
stuartmasson said:
Butter Face said:
He didn't explain his point very well, it looked like he was saying it's different rules on a PCP to me.
And it's not always as clear cut as paying 24 out of 48 payments, it depends on deposit paid and rate etc too but it's normally pretty close.
The rules are the same, but the payment schedule means it works out quite differently in practice, and it's generally explained terribly by most dealerships in their rush to get your signature.And it's not always as clear cut as paying 24 out of 48 payments, it depends on deposit paid and rate etc too but it's normally pretty close.
It will be pretty close to halfway through the term if it's a Hire Purchase, not if it's a PCP. Sometimes it may only be a few months before the end of the agreement - especially if you have a relatively short term (3 years or less) on a car with a strong residual value.
But yes, some dealers don't get how it works at all. Someone I know was telling people they just had to go halfway through the agreement before it was raised that isn't the case at all.
People should also read finance agreements, it's all there in black and white and explains it well.
Butter Face said:
He didn't explain his point very well, it looked like he was saying it's different rules on a PCP to me.
And it's not always as clear cut as paying 24 out of 48 payments, it depends on deposit paid and rate etc too but it's normally pretty close.
Nah, it was you that didn't understand my point very well rather than me not explaining it properlyAnd it's not always as clear cut as paying 24 out of 48 payments, it depends on deposit paid and rate etc too but it's normally pretty close.
I did mean about the 50% being at a different place - a "normal" HP agreement will be there or thereabouts 24 months in to a 48 month agreement & a PCP will be at a later point because it's loaded at the end.
You're not the only salesperson on here BTW - I've been selling since 1990.
northwest monkey said:
Nah, it was you that didn't understand my point very well rather than me not explaining it properly
I did mean about the 50% being at a different place - a "normal" HP agreement will be there or thereabouts 24 months in to a 48 month agreement & a PCP will be at a later point because it's loaded at the end.
You're not the only salesperson on here BTW - I've been selling since 1990.
To be fair, I didn't understand your point either until you clarified. OP - if you need to get rid of the car, see if the finance company can provide a copy of the agreement, if not they cannot stick to their obligations under the Consumer Credit Act and I believe, but am not a lawyer so someone will no doubt correct me, the agreement becomes unenforceable. I did mean about the 50% being at a different place - a "normal" HP agreement will be there or thereabouts 24 months in to a 48 month agreement & a PCP will be at a later point because it's loaded at the end.
You're not the only salesperson on here BTW - I've been selling since 1990.
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