Handing the keys back on an HP car

[dreadingseptember]

We've paid 2/3 years on it and dp now out of work. We can't afford the repayments unless he finds a job quickly. If we hand keys back there will be a deficit, what will happen with that?

You need to check your agreement but usually if you've paid more than half you can hand it back.

I did this in 2007, rang the company up and told them i'd like to terminate the agreement and hand the car back. They sent a low loader out to collect it, and that was the end of that. It didn't affect my credit file either.

Meant to say, they will get the deficit back from auctioning the car so you shouldn't be liable for anything, or at least I wasn't. Never heard from them again!

Shit, that should say 2/5! Sorry

Ring them and find out how much it would cost to buy the car outright, and see if you can sell it? That's what I did, actually somehow made a profit on it as well - it had held its value surprisingly well!

There is a surprising and not widely understood provision of the Consumer Credit Act that says that you can terminate an HP agreement by returning the goods without any further liability once you have paid half of the total amount payable. Although you have only been paying for 2 out of 5 years, there may have been a deposit which would take you past that point?

Check with a Citizens Advice Bureau as the HP company may not give you correct information (early termination is usually not in their interest).

Thanks to both of you, I'll ring them tonight about a purchase price. Already working with CAB so will ask them about terminating the agreement.

Really?

No I made it up

S99-100 Consumer Credit Act 1974.

It does depend on it being a Hire Purchase agreement so if it doesn't say "This is a Hire Purchase Agreement regulated by the Consumer Credit Act 1974" check with CAB or another professional.

How much they can recover from selling the car does not affect your rights in any way - if they make a loss it is their problem, if they make a proft you are not entitled to any refund and must still pay any arrears (plus the difference up to 50% if you haven't reached it yet).

Ah so after checking tonight we haven't paid half the total yet, quite a bit off. If we terminate the agreement they can only ask us to pay up to 50% of the total sum owed. Is that right?

I read the consumer act and couldn't understand it.

Also, the total owed includes all the interest, is that right?

Sorry, I didn't want to mention the CCA, it is a bit unfriendly.

Best to go through this with someone familiar with how it works in practice, CAB is ideal.

The answer to both your questions is yes, that is right.

The CAB should also calculate a settlement sum i.e. how much you would have to pay to end the agreement by purchasing the car outright (there is a statutory formula for this) and give you the trade value for the car (not the trade-in value, the trade value is the amount the car should fetch at auction) which will indicate if it would be possible for you to end the agreement that way.

Thank you again, hopefully we'll have more luck getting through to cab tomorrow.

PLEASE take photos of every panel, window, both screens and bumpers etc when you send it back, if they say "theres a dent" dont just let them tick the box on the form make them right down the exact measurements eg 3mm accross etc.

Cars go back to the finance company via a company that will assess for damage and sometime make up damage to make you pay inflated prices as a fine, it's hard to disprove if you dont have evidence.

This company doesnt actually fix the car either they just act as go-betweens.

It's happened to us when sending cars back (ironicly) to the company DH works for, we've always fought it and got out of if but others havent. DH knows it goes on and told his bosses, they arent interested.