VWFS Hire Purchase query

[Themanlike]

Hi there, I am new here but it this looks like the place to find an answer to my question.

 

My g/f wants to settle/terminate her car's Hire Purchase agreement as we are leaving the country (not known at the time of taking it out).

 

The key facts are...

 

Cash price of car = £11,667.77

Advance payment = £855.48

Rate of interest on credit = 7.72%

Total charges = £3,011.31 (interest of £1,826.31, acceptance fee of £125 and option to purchase fee of £60)

Finance term = 36 months

Monthly payment = £208.36

 

Early settlement figures

Quarter of duration = £9,567.55

Half of duration = £8224.71

Three quarters of duration = £6,796.16

 

Termination = half the amount payable under this agreement (£6,839.54)

 

She has paid the following...

 

15 months @ £208.36

Advance payment of £855

Totalling £3980.40

 

There is a Final Payment (I understand this is also known as a balloon payment) to pay of £5406 at the end of the 36 months, but we understand that is optional. If she opts not to pay this, she can give the car back.

 

I have heard about the Voluntary Termination and cannot work out if we can invoke it in this instance. As part of this agreement, is she liable for the whole 36 months - or can she pay 50% of the amount due over the 36 months and then give the car back and have to pay no more?

 

Or is the Voluntary Termination only applicable when 50% of the WHOLE amount (i.e. 36 monthly payments + balloon payment) has been paid.

 

VWFS have said that she needs to pay the difference between total paid to date (£3,980.40) and the termination cost (£6,839.54) which is £2,859.14, JUST TO GIVE IT BACK TO THEM.

 

The car is in good condition and is under annual mileage allowance.

 

Any help would be very much appreciated, including anything i can quote.

 

Many thanks in advance,

 

Themanlike

Edited January 10, 2012 by Themanlike
To remove the finance company name from post

[crem]

The key facts are...

 

Cash price of car = £11,667.77

Advance payment = £855.48

Rate of interest on credit = 7.72%

Total charges = £3,011.31 (interest of £1,826.31, acceptance fee of £125 and option to purchase fee of £60)

Finance term = 36 months

Monthly payment = £208.36

 

Early settlement figures

Quarter of duration = £9,567.55

Half of duration = £8224.71

Three quarters of duration = £6,796.16

 

Termination = half the amount payable under this agreement (£6,839.54)

 

She has paid the following...

 

15 months @ £208.36

Advance payment of £855

Totalling £3980.40

 

I have heard about the Voluntary Termination and cannot work out if we can invoke it in this instance. As part of this agreement, is she liable for the whole 36 months - or can she pay 50% of the amount due over the 36 months and then give the car back and have to pay no more?

 

Or is the Voluntary Termination only applicable when 50% of the WHOLE amount (i.e. 36 monthly payments + balloon payment) has been paid.

 

VWFS have said that she needs to pay the difference between total paid to date (£3,980.40) and the termination cost (£6,839.54) which is £2,859.14, JUST TO GIVE IT BACK TO THEM.

 

 

The facts regarding Voluntary Termination are pretty much as you have quoted in your post. i.e. To invoke a VT you must pay them 1/2 the entire HP value, £6,839.54 just as they state.

 

If you have already paid at least this amount, you don't need to pay more, but neither would you receive any refund if you have paid for example £7,300

 

As you are well short of the 1/2 way mark, you can still invoke the VT, but they remain entitled to the property back PLUS 1/2 the total amount payable.