Welcome Finance HP Termination

[Puffstar]

I know - I know, worst decision ever. Anyway a slight naive and desperate me signed up for HP with Welcome. It had been for a rough few years, which had left me CCJ in circumstance beyond most of my control. I needed a car for work and after finding one I liked, the dealership sorted out a finance company for me. The screen price was £3500 and the payments were well within my budget as I have a reasonable income. Recently after clearing a fair bit of debt off, I've turned my attention to HP. The costs involved 28.6apr and total payable £5535 just seem daft (ah hindsight). I have been able to save over the last year and I am now in a position to buy a decent car outright.

I am 15 months into a 36 month agreement. The plan was to make final payment to make up to difference to the 50% mark as stated in the 'Termination: your rights box' and be done with it.

This is the point I step in to a minefield it seems!

Last week I sent a letter to Welcome, stating I was looking to exercise my right to termination and please could they send me a statement of my account so I could bring it up to the termination figure. Once this had done could arrange the return of the car. Welcome responded to my letter with a rather rude phone call and I realised this might not be a stress free process.

Welcome basically said I owe the full ammount for a rather worthless mechanical breakdown insurance, something that was presented as a requirement, not an option at the start of the agreement. He also said I owe for fees, though he couldn't tell me what they were. I have a perfect payment record. He then tried to pressure to agree to an ammount to pay and to arrange an inspection of the car. I would then be liable to any repairs to the car. It was at this point I refused to discuss it any further and I would be seeking professional advice. Welcome said I have seven days.

A phone call to the CAB will be happening tomorow, so I can take the contract along to an appointment asap. I went to the dealer I got the car from today and they were not interested in helping at all. Hopefully the CAB will be of help and if anybody has any additional advice please feel free to post.

Some of it is clear, but most if it is damn right confusing. I'll lay it out below hopefull it will make sense and somebody could give me the idea of my rights. These will also be my questions to the CAB.

The car was purchased from a 'normal' dealership. They are not an official Welcome Finance dealership, only the finance was arranged with Welcome? How does this affect things if at all? In short its a car financed by Welcome, but not supplied by them.

Termination Figure - To date according to my bank statements i have paid £1945.32. I paid £100 upfront, so to date I have paid £2045.32. The TERMINATION: YOUR RIGHTS figure is £2491.20. I presume I can send a cheque via recorded delivery for £445.88 along with an appropriate letter to legally terminate the HP? Any further arguments regarding money owed would be seperate to this?

Mechanical Breakdown Insurance - Luckily this is the only insurance that is attached to the account. I have signed for it on the contract, but like I said it was obligation and hence i signed for it. Cost of the insurance is £370. Amazing they charge interest on this too and final cost is £503.20 per the contract. I really don't want pay anymore than the 50% termination figure. They are telling me I would have to pay this on top as they pay it in advance to the insurance company. The small print is really vague on this. The PPI, which I dont have luckily, is covered by clause 15 in brackets. Clause 15 says you owe no matter what really and only refers to PPI. Mechanical Breakdown insurance is not mentioned. Again slightly confused over my rights.

Returning the car - This a bit of a worry. Basically the car I bought in the first place wasn't mint. There was already a slight dent in the door and various scuffs. The car is on a S 1998 plate so it wasn't an issue. In the time I've had it the aircon has stopped working. I had re-gassed, but it must have a break in the pipes somewhere. It recently had an mot and passed ok. It has all the kind of small issues most 1998 cars have. It was sold with a FSH but the dealership could not provide proper evidence, something I should have persued at the time. All i have got is an A4 print out with garages and mileage. Even on this the intervals are over would you would consider to be full. The car is pretty good in general, it's certainly no dog. Having read a few horror stories, I just know im going to be hit for stupid bill for stuf that was faulty on the car on purchase. When I bought it, it was old car?

When I went to the dealer today, he said the car would not be returned to him. Again this could be fun and games it seems. Judging by what I have read Welcome will try to get me to take it to a branch some 40-50 miles away or they'll charge me. My rights are pretty clear on this ie they cant do this?

I'll keep you all informed as to wether this turns in to a nightmare or not.

[Puffstar]

Well - Back from the local CAB and they were helpful, but pretty useless. It's drop ins only, so no appointments. Hour and half worth of waiting and there was no one savvy on HP or finance, just a luck of the draw advisor.

It's seems my research has been paying off though as I probably knew more than she did. Whilst not too up on things, the advisor did seem to think the contract from Welcome was sketchy. I must stress she was full of sound advice even if she didn't know the in and outs.

The outcome was that she pointed me in the direction of trading standards concerning the breakdown insurance.

What I have decided to do - I'm going to write to welcome using one of the goverment templates for a volutary termination and the car is to be returned. I will include a breakdown of what I have paid so far according to my bank statements and a cheque to bring the balance up to the termination figure. They will also be informed that all responses must be by post.

I will see how we go from there.

[Yasmin]

oh really good luck with yours. Same company, different problems....!

[crusty git]

yes car credit all over again

Good Luck you will win this

[Puffstar]

I'm starting to think a change of plan might be the best solution. looking at the figures, I can afford to go for an early settlement. Basically I have 3 grand saved for a car. if:

1 i do a volutary termination I have around 500 to pay to reach the termination figure. Plus then theres all the insurances and stupid costs they try to sting you with.

2 if I do a settlement according to rule 78 will be around £2800. A rough calculation here and it matched the figures roughly in the hp agreement for early settlement (Javascript Rule of 78 Rebate Calculator - Equal instalments) The car is worth £2-2300 on a private sale.

Any advice on early settlement?

[kpmatthews]

hi, what did you do in the end? i've had an inspection report and have a feeling welcome are going to try and charge me for "damage" already on the car when i bought it.