HP 1/2's & 1/3's Handback & Flat rate
Discussion
I'm currently well beyond 1/2 way in my current HP finance agreement & I'm thinking about using the hand-back clause in said agreement.
As this clause is a part of my agreement, I see it that I'd be acting within the terms of the agreement, and the hand-back should not have an adverse effect on my credit record.
Just wondered if anyone has any 1st hand experience of this HP hand-back clause? and am I correct to think that it wouldnt muck-up my credit rating?
Secondly - the car I'm looking at has been offered to me on a new HP agreement @ 5% flat rate (£13495 / 60mnths @ 5%). Is this a decent flat rate percentage in the current market?
As this clause is a part of my agreement, I see it that I'd be acting within the terms of the agreement, and the hand-back should not have an adverse effect on my credit record.
Just wondered if anyone has any 1st hand experience of this HP hand-back clause? and am I correct to think that it wouldnt muck-up my credit rating?
Secondly - the car I'm looking at has been offered to me on a new HP agreement @ 5% flat rate (£13495 / 60mnths @ 5%). Is this a decent flat rate percentage in the current market?
See this thread: http://www.pistonheads.com/gassing/topic.asp?h=0&a... is it possible to?
Particularly rfoster's post.
Particularly rfoster's post.
If it weren't in the t&c's of the agreement, then I'd expect that a hand-back could effect your credit rating - but as its in the agreement, then I dont think it should effect you as you have acted in the way which you agreed you would.
I have enquired with my finance company, who didnt seem updset or mention any un-favourable conciquence of a hand-back(which you might expect they would if they wanted you to continue making payments until the natural end of the contract) - they just posted a form which confirms any balance/fee and tells me what to do next.
Anyone with any thoughts on the current 5% flat rate I've been offered?
I have enquired with my finance company, who didnt seem updset or mention any un-favourable conciquence of a hand-back(which you might expect they would if they wanted you to continue making payments until the natural end of the contract) - they just posted a form which confirms any balance/fee and tells me what to do next.
Anyone with any thoughts on the current 5% flat rate I've been offered?
gal10 said:
Secondly - the car I'm looking at has been offered to me on a new HP agreement @ 5% flat rate (£13495 / 60mnths @ 5%). Is this a decent flat rate percentage in the current market?
Come back with an APR, or at least a monthly payment.I make it £281.15 monthly, for an APR of 9.1-9.2%. The best loan in the market is A&L @ £270.73, APR 7.8%.
So assuming there are no silly fees to pay, that's not a dreadful rate but is definitely beatable unless you actively want finance rather than a bank loan.
Hi, is your car worth considerably less than the finance outstanding? It may be that you can part exchange the car and realise a bit of equity from it, rather than hand it back to the finance company. I think 5% is quite acceptable - as mentioned you may get a better personal loan from moneysupermakret and the like but it won't be secured against the asset and you won't get the halves & thirds ruling. Swings & Roundabouts.
I'm not getting mixed up between HP & APR, nor blinded by what looks like a better deal by a lower % quoted for a HP deal.
I am aware that a personal loan from a high street bank would give me a better APR and therefore lower monthly payment BUT I do like having the ability to hand-back which HP provides.
..I see it as a safety net should my circumstances change OR if as has happened to me before the car is worth less than I could get for it (negative equity).
Do you know if it is possible to arrange your own HP finance? I've looked round on the net but can only find Personal Loans.
I am aware that a personal loan from a high street bank would give me a better APR and therefore lower monthly payment BUT I do like having the ability to hand-back which HP provides.
..I see it as a safety net should my circumstances change OR if as has happened to me before the car is worth less than I could get for it (negative equity).
Do you know if it is possible to arrange your own HP finance? I've looked round on the net but can only find Personal Loans.
Please be wary of voluntary handbacks. This basically relates to Regulated agreements where the customer has an opportunity to return the goods to the finance company once 50% of the Total Amount Payable under the terms of the agreement has been made. Even though it doesnt go against your credit rating it is noted on your credit file.
With regards to rates of finance advertised under a "Typical APR" heading, again these rates are not available to everyone, it is purely down to credit score. A finance company has to offer the "Typical APR" to a small percentage of customers only and its at their descretion who.
5% flat is a relatively good rate for a used vehicle but be prepared to have to pay admin fees with first and last rental, these can range from as little as £99 to £295.00. Also in the changes to way that finances settlements are calculated, going 60 months may not be the best option if you going to change after 2-3 years. Yes you get the benefit of lower rentals but you will incur interest NOT paid for the remaining term in te settlement figure.
Good luck...Richard Glew
With regards to rates of finance advertised under a "Typical APR" heading, again these rates are not available to everyone, it is purely down to credit score. A finance company has to offer the "Typical APR" to a small percentage of customers only and its at their descretion who.
5% flat is a relatively good rate for a used vehicle but be prepared to have to pay admin fees with first and last rental, these can range from as little as £99 to £295.00. Also in the changes to way that finances settlements are calculated, going 60 months may not be the best option if you going to change after 2-3 years. Yes you get the benefit of lower rentals but you will incur interest NOT paid for the remaining term in te settlement figure.
Good luck...Richard Glew
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