Vehicle hire purchase

[gideonssword]

I bought a car on hire purchase and I am 15 months into a 36 month agreement.

 

My question is can I increase the standing order payments to pay it off earlier as opposed to saving up a lump sum to clear it off?

 

Many thanks.

[mikeymack2002]

You can always call your creditor to make extra payments at any time they should be happy to take your payment...

[Peterbard]

I bought a car on hire purchase and I am 15 months into a 36 month agreement.

 

My question is can I increase the standing order payments to pay it off earlier as opposed to saving up a lump sum to clear it off?

 

Many thanks.

 

It depends on youor contract and the way the interst is calculated. If the interst is calculated on the resulting ballance, you are better paying off what yuo can as soon as you can as this will reduce the total ammount you repay. That is if the contract allows early repayment and there are no penalties.

 

I would give the lender a ring and ask them.

[obiter dictum]

I agree with Dodgeball

 

Most car finance agreements have the interest Front loaded"

That is all the interest is calculated over the full term of the loan (36 months)

 

If you are in a financial position to increase your payments and that financial security is definite your best bet is contacting the creditor and do an agreement to vary the original. You will save shed loads of interest that way. If they do not agree to vary the contract ask them if you settle early will you get that interest rebate

[gideonssword]

Thanks for the information.

 

There has been a development since posting this,

 

We have been awarded mobility for my autistic Son so we could get a new vehicle.

 

It does make more practical sense to get a new car as on this HP car I'm paying £236 a month for an 8 year old car

 

I'm a bit nervous of voluntary terminating the agreement as the company will most likely "try it on"

[Peterbard]

Yes motorbility is a good deal, the only down side is that you never own the vehicle.

 

It is not a big deal to VT lenders can be awkward sometimes, but as long as you know what your rights are, they have to give way.

Have you paid half of the total contract price, it is not necessary to have done so for the sake of the VT, but it can make it easier.

 

There should be a sum on your agreement, if not you can calculate by taking the total amount paid(this includes any deposit,trade in allowance) and comparing it with the total payable under the contract.

 

If you have not paid 50% you can still VT but you will have to agree to pay the shortfall after the car has gone back.

 

There are template letters, the one on the national debt-line is a good one, not sure if there is one on here, or you could just contact the lender and ask them to send you the form.

[gideonssword]

Thanks Dodgeball,

 

I am 3 payments short of 50%

 

If I look into a mobility car by the time we choose one and it arriving a few months may of passed so yes it seems the best way to go.

 

How do I go about mobility? Do I just take the letter to a mobility dealer? Sorry I've never done this before so I don't know how to go about it.

 

Any advice is most welcome

[Peterbard]

Thanks Dodgeball,

 

I am 3 payments short of 50%

 

If I look into a mobility car by the time we choose one and it arriving a few months may of passed so yes it seems the best way to go.

 

How do I go about mobility? Do I just take the letter to a mobility dealer? Sorry I've never done this before so I don't know how to go about it.

 

Any advice is most welcome

 

You wont have any problems, ring any main dealer and you will be bombarded with people trying to get you on board.

 

We use vauxhall if you put vauxhall motorbility in google they will have a site available which you can use to price and browse their offers, same with all the other main dealers.

 

As for you VT, i find the best thing to do is send off the paperwork half way through the payment cycle, and state that the agreement will be terminated after the next payment, and this will be the last payment made under the contract.

 

This gives them 14 days notice, the car only has to be in reasonable condition for its age, it does not have to be in show room condition, also I have found it advisable to take lots of the pictures inside and out before it goes back just in case they send you a bill for body work etc.