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Voluntary Termination Of Car Finance


DUNCAN123
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Hi guys,

A mate of mine (honest) has a car he pays a lot of money every month for and is now worth a lot less than he owes.

He has payed exactly half the monthly payments and was asking me if I knew anyone who had done a VT.

I said I would ask around for him,his main worry is his credit rating and any charges.

 

The cars in quite good nick and has been serviced and mots every year he's had it although he bought it 3 years old without any history.

 

Does anyone have any thoughts or advice I can give him?

Thanks troops,

Duncan

Ps does being in Scotland make any difference

61 Santa Fe & 2011 Bailey Olympus 624

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The information on VT was probably supplied with the contract from the lender. VT can effect credit rating apparently.

 

http://www. santanderconsumer. co. uk/wp-content/uploads/2012/11/SCUK-Voluntary-Termination-leaflet. pdf

Alan

 

2005 Nissan X-trail 4WD diesel and Swift Charisma 540 2012 Lunar Clubman ES  2018 Lunar Clubman ES

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It is not half the number of payments that count.

 

Firstly it has to be a Regulated Hire Purchase agreement, then you must have paid at least half the total amount payable under the agreement.

 

The total amount payable can be found on the finance agreement under the section titled "Your Right to Terminate", this is the amount you must have paid to voluntarily terminate your agreement.

 

Whilst you have every right under the agreement to do this, it will show on your credit record as a VT and as such could affect a future lenders decision if you try to take out another HP agreement.

 

The reason for this is that if he hands the car back, the finance company will have to stand any losses when they dispose of the vehicle (you might say so what that's their problem, and you are right it is), however a future lender knowing that the previous lender has had the customer VT an agreement, may decide they are not prepared to risk getting burned by the same customer and decline to lend on a HP agreement, they may however lend on a Personal Loan where there are no rights of termination.

 

As far as I can remember the only difference with being in Scotland is that under the finance companies right to terminate, in England if you have paid more than 1/3 of the total amount payable under the agreement the finance company has to get a court order before they can repossess the car, in Scotland they have to get a court order regardless oh how much has been paid.

 

. ..and the vehicle must be in reasonable condition based on age and mileage, if it's not the finance company is entitled to send you an invoice for reconditioning.

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Any repair or damage to the car has also to be paid for.

Alan

 

2005 Nissan X-trail 4WD diesel and Swift Charisma 540 2012 Lunar Clubman ES  2018 Lunar Clubman ES

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many years ago I had a BMW on PCP finance

 

sometime later I got rid by handing it back but only after checking the smallprint to see how much had to have been paid off so it could go back without penalty. .

 

not aware of any adverse affect on my credit score as a result but to be fair I haven't had a car on finance since

2004 Land Rover Discovery & 2011 Bailey Pegasus Bologna

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I handed a car back on a VT about 12 years ago as it just wasn't being used, so i was paying for it to sit on my drive while i was working abroad. The car value & what i owed as roughly the same, though they did sting me for about £600 for 'repairs' that i wasn't aware needed doing when i handed the vehicle back. Not sure it affected my credit rating as i've been able to get credit since - mortgage & car finance.

I refer you to the Rt Hon Member for the 19th Century.....................pictured just to the left of your screen..................

 

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