Help settle an argument - voluntary termination of a hire purchase agreement

[daveshoelace]

Hi guys

 

My girlfriend bought a car on finance in the showroom four years ago and attempted to return it within 4 days, which at the time they refused. Obviously as it was in the showroom no cooling off period was given.

 

However, we have been made aware that under the consumer credit act, if we attempted to voluntarily terminate the agreement and return the car within a week, we would be liable for only half of the agreed price.

 

In our case the total payable was £120000. The finance company sold the car for £5000 at auction and removed that amount from the amount payable, making us owing £7000.

 

Now, my girlfriend believes that because of the above rule in the consumer credit act, she is still liable for £6000, rather than £7000, as that is half the original amount. I, however, believe that as we atempted to return the car in 4 days that at that time the debt should have been halved at that time to £6000, and thus when the car was sold for £5000 it should have reduced to £1000.

 

This is causing a great deal of argument between us and obviously the difference between the two possibilities is tremendous. If anyone can settle this argument for us we will be very appreciative.

 

regards

[ashmk]

I know nothing about this area but hopefully this read,

 

National Debtline England & Wales | Debt Advice | Factsheet 16 How To Deal With Hire Purchase Debt

 

will keep you busy till the experst arrive.

[mtw1980]

You need to check the documentation completed at the time the vehicle was handed back. The reason being this:

 

If you VT'd (Voluntary Terminated) the agreement, the liability is limited to 50% (a half) of the total contractual amount.

 

However, you may have actually VS'd (Voluntary Surrendered). The vehicle. (This is the option that most finance companies will look to get you to do). In this case, the liability is 100% of the total contractual amount.

 

Both are very similar terms, and both relate to handing the vehicle back, but as you can see, the outcomes are very different..... definitely worth checking which you actually did.

[sequenci]

In order to VT under s99 of the Act you would have to specifically request it. Like mtw1980 has stated I'm sure you actually did this by surrendering the car instead.