Help please? I can't pay the finance on my car

[kellys0706]

I purchased a car on finance in May 2009 and have made 17 payments of £146.03 with 31 payments to go (as it was a 48 month agreement). I phoned up in July and they said the settlement figure was £4k.

 

I cannot afford to pay and don't really know what to do.

 

I called Black Horse and asked what they could do to help me, they could reduce my payments by half but would add default charges and extra interest to the end of the loan.

 

I can also decrease my payments permanently, but wondered if I could then increase them again once my financial situation improves.

 

What would happen if I just asked them to collect it?

 

Any help will be greatly appreciated

[nicolee2931]

I think the problem you would have if you asked them to come and collect the vehicle would leave you liable for the outstanding finance as you have only just paid around a third of the balance. In order to do a VT of the vehicle you need to have paid at least half of the balance.

 

Now as you have paid at least a third they can't just come and take the car back without a court order, however it could leave you wide open to the court granting a repossession of the vehicle.

 

What advice you recieve depends on what you want to do with the car and at the same time keep your losses to a minimum.

 

How much arrears are due on the account?

[kellys0706]

Hi nicolee2931

Thanks for the reply.

 

There are no arrears on my account currently as I am still making the full payments. However, it means that other payments I need to make are not getting paid.

 

I don't mind if I have to lose the car as it costs a fortune to run and maintain anyway, I just don't want to end up paying too much at the end of it.

 

Looking at Autotrader they are going for about £4k to £5k so they shouldn't make a loss on re-selling it

 

Thank you

[nicolee2931]

Well based on there are no arrears on the account the best way forward for you would be to ensure you pay at least half of what is outlined in the agreement.

 

I'm assuming its a regulated HP agreement under the CCA 1974 it should state that on the agreement.

 

If you can satisfy both points above then you can VT the car without financial penalty.

 

I'm sure someone else will be along soon to back me up.

[kellys0706]

Thank you so much nicolee2931, you've been a great help.

Sorry if I'm a bit thick but what does VT mean?

I'll check my agreement tonight when I get home and see if it is under the CCA 1974

 

Thank you

[nicolee2931]

Thank you so much nicolee2931, you've been a great help.

Sorry if I'm a bit thick but what does VT mean?

I'll check my agreement tonight when I get home and see if it is under the CCA 1974

 

Thank you

 

VT mean voluntary terminate, which means you can terminate the agreement by handing back the vehicle without financial penalty.

 

The important things to check are it's a HP agreement regulated under the Consumer Credit Act 1974 and you have paid at least half due under the agreement, I think another point is you must not be in arrears on the account at the time of termination as you could be asked to pay up such arrears before the creditor will allow termination of the agreement.

 

A few minor issues has the vehicle been serviced regulary at the intervals specified by the manufacturer and do you deem any wear and tear of the vehicle to be reasonable since you took possession of it, as these are some of the things the finance company can play up over upon VT of the goods.

 

Should you wish to terminate the agreement you normally do it by writing to the creditor stating you wish to return the goods and VT the agreement without penalty as is allowed under the agreement. They will normally wish to inspect the goods upon collection. When they do collect the goods ensure the V5 is completed correctly and remove any Tax Disc from the vehicle before the collection agent leaves. This allows you to claim back any unused Road Licence Fund from the DVLA, also remember to write to the DVLA and inform them that you are no longer the legal owner of the vehicle as of date... etc. If you get no reply or letter from the DVLA after 4 weeks acknowledging transfer of ownership chase the matter up.

 

If you get stuck just post up.

Edited September 28, 2010 by nicolee2931