Legalities of Hire purchase contracts and non performance

[Surfer01]

Recently on 26th September 2012 we purchased a vehicle on HP and duly signed the finance agreement known as a Conditional Sale Agreement regulated by Consumer Credit Act 1974.

 

 

Within less than 24 hours the vehicle developed a serious fault and was malfunctioning.

 

 

The dealer collected the vehicle and then handed it over to a franchise dealer as they were unable to rectify the fault.

 

 

The franchise company is in the same situation and cannot rectify the fault either.

 

According to the HP document we have a “Right of Withdrawal” which states the following;

 

You have a right to withdraw from the agreement without giving reason. T

his right is available to you for 14 days from the day after the agreement is executed by us, until 14 days later. If you wish to withdraw your right from the agreement you must notify us orally by telephone, or in writing to xxxxby email to xxxxx or by fax.

 

If you exercise the right to withdraw you are withdrawing from the credit only and not purchase of goods.

 

You are then required to repay the total amount of credit and the accrued interest.

Interest will accrue from the date the amount of credit was provided until the date the amount of credit is repaid.

 

You must repay the amount owed without delay and no late than30 days after giving notice of withdrawal. The amount of interest will accrue at a daily rate of £1.09. To repay the amount of credit and interest due please contact us at the address above.

 

As it appears there will be some difficulty in resolving the issue with the vehicle and it could take days, weeks or even months and then the problem may re-appear in several months time, where does that leave us?

 

 

We have advised the HP company and the dealer in writing that we are exercising our right to withdrawal and are rejecting the vehicle, but not sure if it is the right thing to do. We have not had use of the vehicle for a week which is still at the main dealer.

 

Where do we stand with getting back our deposit and other incidentals totally just under £3600?

Is there anything we should be doing?

[Gaston Grimsdyke]

Oh dear, you have done the worst thing possible by withdrawing. All you have done is cancel the finance agreement, not the obligation to purchase the vehicle. You are now obliged to pay the finance company the full price of the vehicle. There is no sane reason why anyone would ever exercise their right to withdraw, all it does is turn a finance purchase into a cash purchase, which is the last thing you want. You now have a sale contract with the dealer, so you should maintain that you have rejected the vehicle and ask them to pay back the price to the finance company so that you don't have to.

[postggj]

sale of goods act

[Surfer01]

Oh dear, you have done the worst thing possible by withdrawing. All you have done is cancel the finance agreement, not the obligation to purchase the vehicle. You are now obliged to pay the finance company the full price of the vehicle. There is no sane reason why anyone would ever exercise their right to withdraw, all it does is turn a finance purchase into a cash purchase, which is the last thing you want. You now have a sale contract with the dealer, so you should maintain that you have rejected the vehicle and ask them to pay back the price to the finance company so that you don't have to.

 

 

Finance company has now contacted us about it and advised that the "Right of withdrawal" was the incorrect thing to do and we explained that we had misunderstood the clause. We will cancel the request in writing anyway. We have also sent a letter off to the dealer rejecting the vehicle. In the meantime the finance company is contacting the dealer.

[postggj]

at least you seem to have a decent finance company

 

was it a new vehicle or used