Voluntary Termination - Car on hp.....Help pls!!!

[austin000]

Hi there

I'm wondering if anybody has any experience of Voluntary Termination with Welcome Finance.

I have a car on hp with them and have been led to believe that as I have paid over half of the payments that I can just hand the car back provided it's in a reasonable condition. I have no PPI, only the shortfall insurance.

I have rung Welcome and said I'd like to know what my rights are and they have said that they could arrange for the car to be collected but it would then be taken to auction and I'd have to pay the difference between what it sells for an the balance on the account. There is no mention of 'auctioning' on the contract I have. I said this to the person on the phone and they just said 'sorry that's what we do'!!

Very confused now. Are they really allowed auction the car, sell it for peanuts and then make me pay the balance? Not sure if I'am I being led up the garden path and they are saying this to try and put me off... it's my understanding that Welcome are no longer selling cars.

Would love to hear from anybody who knows what my rights are as Citizens advice were not very helpful. I can see many horror stories about Welcome Finance and people handing cars back but getting a massive bill sent afterwards and then debt collection.

Thanks

[shouldbworking]

consumerdirect website said:

You can terminate an HP agreement and return the goods at any time by writing to the lender, as long as you bring your total payments up to half of the total amount payable under the agreement (the exact amount will be stated in a box on the front of your contract). But you will also have to pay off any credit you took out to pay for insurance. If you have already paid half, you only have to pay for any missed payments or damage to the goods. But if you have already paid more than this amount, you will not get a refund of the difference. You should not be charged to return the goods. If under the terms of your contract you must take the goods back, this should only be to premises within a reasonable distance of your home.

[750turbo]

austin000 said:

Hi there

I'm wondering if anybody has any experience of Voluntary Termination with Welcome Finance.

I have a car on hp with them and have been led to believe that as I have paid over half of the payments that I can just hand the car back provided it's in a reasonable condition. I have no PPI, only the shortfall insurance.

I have rung Welcome and said I'd like to know what my rights are and they have said that they could arrange for the car to be collected but it would then be taken to auction and I'd have to pay the difference between what it sells for an the balance on the account. There is no mention of 'auctioning' on the contract I have. I said this to the person on the phone and they just said 'sorry that's what we do'!!

Very confused now. Are they really allowed auction the car, sell it for peanuts and then make me pay the balance? Not sure if I'am I being led up the garden path and they are saying this to try and put me off... it's my understanding that Welcome are no longer selling cars.

Would love to hear from anybody who knows what my rights are as Citizens advice were not very helpful. I can see many horror stories about Welcome Finance and people handing cars back but getting a massive bill sent afterwards and then debt collection.

Thanks

http://s11.zetaboards.com/saynotoyes/index/

Have a mooch here, a bit old though.

[Guyr]

Read the small-print, the 50% right will be in there if it's HP. However what you have signed may not be an HP agreement, in which case the right does not apply.

Edited by Guyr on Thursday 21st October 15:47

[Hoppelemine]

Guyr said:

Read the small-print, the 50% right will be in there if it's HP. However what you have signed may not be an HP agreement, in which case the right does not apply.

Edited by Guyr on Thursday 21st October 15:47

If the agreement says 'regulated by the consumer credit act' somewhere at the top then you should be good and termination rules apply. If the agreement is not regulated then there will be no mention of the 50% termination rule printed on the agreement.

[cheadle hulme]

austin000 said:

I have a car on hp with them and have been led to believe that as I have paid over half of the payments that I can just hand the car back provided it's in a reasonable condition.

Its half the finance NOT half the payments. ie the total amount of finance is (total months x monthly payment) PLUS GFV/Balloon.

[Hoppelemine]

cheadle hulme said:

austin000 said:

I have a car on hp with them and have been led to believe that as I have paid over half of the payments that I can just hand the car back provided it's in a reasonable condition.

Its half the finance NOT half the payments. ie the total amount of finance is (total months x monthly payment) PLUS GFV/Balloon.

Sorry, going to disagree there. It is half the total amount payable. The total amount payable is exactly what it says it is. The TOTAL. That's the purchase price of the vehicle PLUS the interest on the agreement.

[Chris_w666]

Is your loan a personal loan used to buy a car or a HP (or other) agreement secured against the vehicle? and is it under £25,000.

If the latter you can hand the goods back if they are in reasonable condition with nothing to pay (apart from any unreasonale wear and tear) if you have paid over 50% of the total amount due. So if you borrowed £5000 with £1600 interest you must have paid back £3300 or more before this rule can apply.

You should write to them informing them of your intention to cancel, consumer direct or MSE should give template letters for this. They may want to charge you collection but you are allowed to drop the vehicle at auction yourself and they cannot charge you a fee for this.

[P-Jay]

Hoppelemine said:

cheadle hulme said:

austin000 said:

I have a car on hp with them and have been led to believe that as I have paid over half of the payments that I can just hand the car back provided it's in a reasonable condition.

Its half the finance NOT half the payments. ie the total amount of finance is (total months x monthly payment) PLUS GFV/Balloon.

Sorry, going to disagree there. It is half the total amount payable. The total amount payable is exactly what it says it is. The TOTAL. That's the purchase price of the vehicle PLUS the interest on the agreement.

Minus any deposit.

I.E. If you repayments were 36 x £100 followed by a Baloon of £1000 you could VT once you've paid £2300 or 23 months into it.

But it's worth considering that this only applies to HP agreements and nothing else.

Welcome are slippery bunch of "so & so's" they could have written it up as a personal loan, lease, PCP anything really. I wouldn't trust a single word any of their advisors tells you.

Time to get the paperwork out and have a proper look, if it has a VT clause, it will be written somewhere in the T's & C's

Edited by P-Jay on Thursday 21st October 16:13

[Hoppelemine]

P-Jay said:

Hoppelemine said:

cheadle hulme said:

austin000 said:

I have a car on hp with them and have been led to believe that as I have paid over half of the payments that I can just hand the car back provided it's in a reasonable condition.

Its half the finance NOT half the payments. ie the total amount of finance is (total months x monthly payment) PLUS GFV/Balloon.

Sorry, going to disagree there. It is half the total amount payable. The total amount payable is exactly what it says it is. The TOTAL. That's the purchase price of the vehicle PLUS the interest on the agreement.

Minus any deposit.

I.E. If you repayments were 36 x £100 followed by a Baloon of £1000 you could VT once you've paid £2300 or 23 months into it.

But it's worth considering that this only applies to HP agreements and nothing else.

Welcome are slippery bunch of "so & so's" they could have written it up as a personal loan, lease, PCP anything really. I wouldn't trust a single word any of their advisors tells you.

Time to get the paperwork out and have a proper look, if it has a VT clause, it will be written somewhere in the T's & C's

Not really, the deposit is considered payment towards the total.

example

Purchase price of 10,000 deposit of 2,000 making 8,000 on finance at 7% over 3 years with interest of 1,680. Total amount payable is 11,680. 50% is 5840. 50% would be paid after 15 monthly payments. That's the 2,000 deposit and 15 payment of 268.89

[Dr Derek Doctors]

I'm giving my S4 back to Santander under voluntary termination tomorrow.

It is also going to an auction but there has been no mention of paying any difference on what it goes for and this is definately not part of the agreement. The only payment I may have to make is if it is not in reasonable condition (which sounds vary vague to me).

It is half of the 'Total amount payable' but you have to remember if the credit is cleared early then you dont pay all the interest, only interest on the 1st half of the payments (Santander said this).

It sounds like you finance company are trying to fk you over mate, do some Googling and see what you can find, there is a template letter floating about on the internet to send detailing bits of the consumer credit act that cover VT.

[POORCARDEALER]

Finance companies dont want you to do this obvious reasons...if you have "50%" rule on your agreement then you will not have to pay anything else, the auction price doesnt matter

[austin000]

Hi All

Thanks for your responses.

I have dug out the credit agreement. There is a section called 'TERMINATION:YOUR RIGHTS' it says the following:

"You have the right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods and to half the total amount payable payable on the agreement, that is £X. If you have already paid at least this amount plus any overdue installments and have taken reasonable care of the goods, you will not have to pay any more"

I have definately paid more than what is required. It defiantely does not mention anything about auctioning the car and paying any difference.

Has anybody sucessfully gone through this process with no comeback?

Cheers

[JM]

austin000 said:

Has anybody sucessfully gone through this process with no comeback?

Cheers

Yes, a mate of mine did it with a works van, it was a mess inside, sign written all over and the engine needed a new diesel pump.

He phoned up the company, then wrote to them confirming and they told him to drop it off at the local car auctions which was about 10 mins from his house.

[Stitch]

austin000 said:

Hi All

Thanks for your responses.

I have dug out the credit agreement. There is a section called 'TERMINATION:YOUR RIGHTS' it says the following:

"You have the right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods and to half the total amount payable payable on the agreement, that is £X. If you have already paid at least this amount plus any overdue installments and have taken reasonable care of the goods, you will not have to pay any more"

I have definately paid more than what is required. It defiantely does not mention anything about auctioning the car and paying any difference.

Has anybody sucessfully gone through this process with no comeback?

Cheers

I did it a good few years back with Lombard.

But back then I am sure it was 50% paid = they couldn't reposes the car and 2/3rds to be able to hand it back.

I had no come back, the only issue was that they "conveniently" couldn't pick the car up until after the date that another payment was due and point blank refused to let me deliver the car to the auction house.

Obviously they don't want to take the car back, the only reason to do it is because of negative equity, so will be awkward as hell - it's their problme though, they should require bigger deposits/shorter repayment periods.

[fomb]

How does this affect your credit history? Surely you'd get a black mark against you as you're effectively bailing on an agreement?

[LongLiveTazio]

fomb said:

How does this affect your credit history? Surely you'd get a black mark against you as you're effectively bailing on an agreement?

You're not 'bailing', it's part of the T&Cs.

[missing the VR6]

fomb said:

How does this affect your credit history? Surely you'd get a black mark against you as you're effectively bailing on an agreement?

Won't affect your credit history apart from a T going against the agreement, so if you do it repeatedly lenders will stop lending as they can see you're a serial early termer.

[BlueTwo2]

Just to clear this up for you, as I have both worked in vehicle finance and have done a VT myself, there are two methods available to you:

Voluntary Surrender and Voluntary Termination.

What they are trying to push you into is a Voluntary Surrender. Your finance will have a settlement figure, which is the amount you would need to pay today to be all paid up and end the agreement early. One of the things they let you do, is give them the car back, which they auction off for peanuts, and you then must pay the difference between the sale price of the car, and whatever your settlement figure was calculated at.

DO NOT let them push you into a Voluntary Surrender!

Voluntary Termination is, as has been said, where you reach the 50% mark on your agreement, then tell them enough's enough, i'd like to hand the goods back now. There's absolutely nothing they can do to stop you if it's an HP agreement. It's your right. Obviously they don't like this, as they will still auction off the car, but they won't be getting any more money from you.

Make it clear that you know your rights and you won't go far wrong.

[Hoppelemine]

Stitch said:

I did it a good few years back with Lombard.

But back then I am sure it was 50% paid = they couldn't reposes the car and 2/3rds to be able to hand it back.

It's always been 50% to VT and 1/3rd to stop repo with out a court order.