Voluntary terminate car finance?

[john]

Thank you for all the advice. It has been very helpful.

[dx100uk]

thank you gentlemen

 

its nice to see civil debate.

 

you will both go far here if you keep that up

 

dx

[john]

I have drafted the letter, can anyone confirm that I won't have to make any payments when they've received the letter? Also do I send it to Close finance head office? Thanks

[Peterbard]

I would send it to the dealer, but there is no reason why you should not do both.

 

The dealer has a duty to pass the request on in any case if the arrangement with the creditor for the processing of VT excludes them. You need to give them notice, as stated within the letter, if you have paid half the contract price and have no arrears, and the car is in "reasonable" condition for its age you should not incur any extra charges, they cannot charge any sums for processing the VT it is your right under statute.

[postggj]

Just to clarify one last point it is quite OK to contact the dealer regarding the VT as said they are the agent.

 

 

Just jumping in on this

 

When a VT has been submitted to a dealer, who then decides the value of the vehicle. With most VT or a VS, the vehicle goes straight to an auction house for disposal and the balance submitted back to the finance company

 

This does not effect the borrower as their only liability is reaching the 50% mark

[Peterbard]

Just jumping in on this

 

When a VT has been submitted to a dealer, who then decides the value of the vehicle. With most VT or a VS, the vehicle goes straight to an auction house for disposal and the balance submitted back to the finance company

 

This does not effect the borrower as their only liability is reaching the 50% mark

 

Yes there was a recent discussion on the VT provisions and a great deal of lobbying to get it removed, it only survived by the skin of its teeth. Finance companies have no use for a vehicle, they are left with an agreement which is only half settled, this is why a three party arrangement is generally entered into with the dealer, in that they are made liable for settling the finance(not always). If the car was not a good bargain in the first instance it would be unlikely to settle the agreement, and this is why it is such an excellent piece of consumer protection IMO.

[john]

Thanks. So just to clarify, I send a copy to the dealer I bought the vehicle from and a copy to close finance, next day recorded delivery. I can then cancel the direct debit and wait for them to tell me what to do with the car?

[Peterbard]

Yes they may say that you will owe the last payment, however that would not halt the process, they would have to invoice you for it subsequently.

 

All companies react differently , send the letter and see what comes back, they cannot avoid their statutory duty.

[SeanG79]

Thanks. So just to clarify, I send a copy to the dealer I bought the vehicle from and a copy to close finance, next day recorded delivery. I can then cancel the direct debit and wait for them to tell me what to do with the car?

 

Sorry to jump in again...when you VT, you send the letter to Close Motor Finance, you need send nothing to the dealer where you originally purchased the vehicle as they will play no part in the VT. Close Motor Finance will arrange for an agent to collect the vehicle. The vehicle will then go to auction.

 

Once you send Close Motor Finance the VT letter, DO NOT cancel your direct debit until the car has been collected.

 

Be careful before you sign anything with the agent who collects the vehicle. The vehicle only has to be in good condition subject to fair wear and tear based on the age of the vehicle. If I were you I would also take a number of photos of the vehicle before the agent collects the vehicle to show what the condition of the vehicle is.

[Peterbard]

Sorry to jump in again...when you VT, you send the letter to Close Motor Finance, you need send nothing to the dealer where you originally purchased the vehicle as they will play no part in the VT. Close Motor Finance will arrange for an agent to collect the vehicle. The vehicle will then go to auction.

 

Once you send Close Motor Finance the VT letter, DO NOT cancel your direct debit until the car has been collected.

 

Be careful before you sign anything with the agent who collects the vehicle. The vehicle only has to be in good condition subject to fair wear and tear based on the age of the vehicle. If I were you I would also take a number of photos of the vehicle before the agent collects the vehicle to show what the condition of the vehicle is.

 

Don't be sorry.

 

The dealer has a duty under the act to pass on any notice to the creditor, they my well require the last payment that has been covered as has the photo thing.(post 5)

 

The car may well go to auction, it may not, it makes little difference.

 

Edited June 20, 2013 by Dodgeball

[Peterbard]

As said earlier it depends on the contractual relationship with the dealer who examines the car. I have returned cars back to the original dealer before now, I also know of people who were just instructed to drop the at the local auction.

 

Wait and see what they come back with.

 

As for cancelling the DD, it is up to you, you are liable for hire payments up until the end of the notice you give them. If you are happy to leave it to them to decide exactly how much to call, then by all means leave it.

 

Personally I prefer a termination statement and invoice which I can query should it become necessary.

[Surfer01]

We had an HP agreement with Black Horse. We contacted them and advised that I had been made redundant and that I would like to sell the vehicle, but I would remain liable for all payments until debt is settled. They were quite happy about this and we sold the vehicle a few weeks later pocketing the difference of nearly £6000! It saves them the hassle of auctioning off the vehicle and all the hassle associated with collecting it and putting it on auction.

[Peterbard]

Unusual for BH to be so accommodating, however it is an option, as said it depends on the state of the agreement, the amount tied up in the vehicle etc. usually when this scenario occurs it is because a large deposit had been paid at the outset.

[Gaston Grimsdyke]

Don't be sorry.

 

The dealer has a duty under the act to pass on any notice to the creditor, they my well require the last payment that has been covered as has the photo thing.(post 5)

 

Nope - suggest you read section 102(2) of the CCA. You cannot VT to the dealer, you have to VT to the creditor, the dealer is not the agent of the creditor for these purposes. It seems you have some difficulty distinguishing between dealer and finance company, you have said repeatedly that dealers don't like VTs. Actually dealers love VTs and often advise customers to VT because it presents them with an opportunity to sell them another vehicle. It's the finance companies who hate VTs, and any dealer who procures a VT on an agreement they have introduced to the finance company will find themselves penalised financially by that finance company by a clawback of commission.

 

SeanG79 knows his stuff.

[Peterbard]

Section 175 is the is I was referring to, and actually dealers do not like them at all I could show you the consultation where the industry made it quite clear what their opinion is on the subject.

 

I have VTd several vehicles myself and from experience I KNOW they do not like to voluntarily terminate vehicles, because it means that they are held to account if they sell substandard goods, the mechanism is pretty obvious and to be frank if you cannot see it I cannot be bothered to explain it to you.

 

The information given to the OP is accurate and that is all that matters as far as I can see. If you and your mate want to start another thread I will explain the process to the both of you but this is the last hijack of this thread I will participate in.

 

Section !02 refers to rescission of a contract, not termination as the act itself points out.

[Surfer01]

Section 175 is the is I was referring to, and actually dealers do not like them at all I could show you the consultation where the industry made it quite clear what their opinion is on the subject.

 

I have VTd several vehicles myself and from experience I KNOW they do not like to voluntarily terminate vehicles, because it means that they are held to account if they sell substandard goods, the mechanism is pretty obvious and to be frank if you cannot see it I cannot be bothered to explain it to you.

 

The information given to the OP is accurate and that is all that matters as far as I can see. If you and your mate want to start another thread I will explain the process to the both of you but this is the last hijack of this thread I will participate in.

 

Section !02 refers to rescission of a contract, not termination as the act itself points out.

 

Please do as the owner of the vehicle on HP is the finance company and not the dealer or the registered keeper therefore VT is to the finance company as the owner. This is in black and white on the HP contract signed by the purchaser.

[Gaston Grimsdyke]

I wonder where Dodgelaw has gone?

[Peterbard]

Please do as the owner of the vehicle on HP is the finance company and not the dealer or the registered keeper therefore VT is to the finance company as the owner. This is in black and white on the HP contract signed by the purchaser.

 

Yes we all know that the creditor is the owner of the vehicle, however, there is a third party involved here. The man from the finance company did not sell the car, they will not be coming down and kicking the tyres and checking the vehicles condition.

 

When a car is VTd and it does not sell for sufficient funds to pay the balance due under the agreement, do you think that there is no comeback against the dealer ?

 

I can tell you that there certainly is, dealers have to maintain a profitable ongoing relationship with the creditor, do you think that creditors continued losses because dealers sell substandard goods is going to go un-noticed ?

 

Read the industry report and then when you know a little more you can comment.

[Peterbard]

I wonder where Dodgelaw has gone?

 

More important stuff to do than indulge you in your childish ill informed nonsense and name calling

[Gaston Grimsdyke]

Yes we all know that the creditor is the owner of the vehicle, however, there is a third party involved here. The man from the finance company did not sell the car, they will not be coming down and kicking the tyres and checking the vehicles condition.

 

When a car is VTd and it does not sell for sufficient funds to pay the balance due under the agreement, do you think that there is no comeback against the dealer ?

 

I can tell you that there certainly is, dealers have to maintain a profitable ongoing relationship with the creditor, do you think that creditors continued losses because dealers sell substandard goods is going to go un-noticed ?

 

Read the industry report and then when you know a little more you can comment.

 

You were asked to shoiw the industry consultation which you say supports the notion that dealers hate VTs so please do. Please also explain what a VT has to do with defective goods.

 

Whilst you're at it, please identify the law which makes the dealer the agent of the creditor for the purposes of receiving notice of a VT, it certainly isn't s175. You also say that 14 days notice has to be given - where is that in the CCA please?

[citizenB]

Play nicely guys.. please !

[Peterbard]

Ho Hum it really is not so complicated, why do you think consumer groups support the section 99 provisions so much, if you really need someone to point out the blindingly obviouse theer is this from OFT 761

 

• HP is not simply credit. With HP contracts the lender retains all the rights of

ownership to the goods which are financed, while the consumer assumes the

liability. VT provides a safeguard against consumer detriment arising from this

imbalance.

• The VT provisions give the lender a proper incentive to lend on goods that are

fairly durable. If the asset was not durable, the consumer would have entered

into a hire agreement with an option to purchase what would be low-value

goods at the end, while the lender would have inadequate security. Such an

agreement would not be in the interest of either the lender or the consumer.

 

• Thus the VT provisions prevent lenders from tying consumers to products that

may run out of useful life before the agreement ends, effectively placing an

ongoing liability on the consumer where there is little benefit in return.

• Analysis shows that if the asset is fairly durable, the exercise of consumer VT

rights is unlikely to be costly to lenders.

• The 50% rate, as it relates to the TAP, does not set the time at which the right

voluntarily to terminate falls in a contract. Therefore the lender can determine in

advance whether or not there is at that time a corresponding value in the goods,

by adjusting the amount of deposit and term of the loan.

• The removal or erosion of this important consumer protection provision would

need a clear policy argument backed by evidence. The consultation rehearses

some arguments for repeal of, or amendment to, the VT provisions but they lack

substantiation.

• Analysis shows that it is reasonable (for both lender and consumer) for the

minimum VT level to be set at half the TAP.

 

The rest of the consultation runs along the same lines

 

Section 175 ensures that anyone who has acted as agent for the creditor will refer any document to the principle, unless you believe that the creditor just acted for the lender in this one and only transaction, incidentally I did not say that the lender should only send notice to the dealer.

 

14 days is standard time for a letter before action in any legal proceedings and conforms with pre-action protocols.

Edited June 26, 2013 by Dodgeball

[sequenci]

Morning all. Please be civil to each other. This is an interesting thread for sure.

 

For the record I always through that under a VT the onus would be on the individual to return a vehicle to a location of the finance firm's choice so long as it's a 'reasonable' distance away. Some firms may offer to collect the vehicle but it's not obligatory. Is that the case?

 

Ta,

 

Seq.

[Peterbard]

Morning all. Please be civil to each other. This is an interesting thread for sure.

 

For the record I always through that under a VT the onus would be on the individual to return a vehicle to a location of the finance firm's choice so long as it's a 'reasonable' distance away. Some firms may offer to collect the vehicle but it's not obligatory. Is that the case?

 

Ta,

 

Seq.

 

Yes this has been my experience although it is purely a facility which comes about via the working relationship between the creditor and the dealer, it is possible for the debtor to return the car elsewhere.

 

There is the matter of the dealer being involved in accessing the worth of the vehicle at the end of the VT period, and some questions will undoubtedly be asked of the initial dealer if the sum raised on sale does not meet the half value point, if this is the case.

[sequenci]

Oh, it's also worth remembering that the 50% point can be moved by that ever present balloon payment, can't it?