Car finance (Repossession)

[Ant84]

In January this year, I took out car finance for £17,000. At the time, my business was going well, and I was easily able to afford the repayments. By the start of June, due to unforeseen circumstances, work had gradually dried up, leaving me with not enough money to keep up the repayments. Eventually, I told BCT that I could no longer afford the car and for them to come and collect it from my house. They did this around 6 weeks ago and I have heard nothing at all from them since.

 

The trouble is, now I am really struggling without a car and I need one to get around. I know that the repossession will affect my credit rating somewhat, but to what extent? If I tried to get finance for a cheaper car, would I be likely to get refused point blank due to this?

 

Any responses will be greatly appreciated.

 

Cheers in advance.

 

Anthony.

[BotB]

Have you checked your credit file? Perhaps you should see what, if anything, has been registered in respect of this loan before you make any further applications.

 

From what you have said, you had the car for less than 6 months before handing it back. I suspect you will be hearing from the finance company shortly, once they have disposed of the vehicle, asking you to pay a shortfall. After such a short period of repayments, together with the depreciation of the vehicle since you bought it especially if sold in auction, its very unlikely that what they have recovered so far will clear the loan.

 

I think you need to find out what your liabilities are on this loan before you jump in after another one. Are you able to put some money together to buy a cheap car outright to run around in - might not have the street cred of your other car but if it gets you from A to B ....

[Ant84]

Not at the moment. It may be worth noting that the charges I have incurred on my business account had a massive factor in me not being able to afford the repayments. Not sure if that has any relevance, but I thought I'd mention it anyway.

 

Have not been able to view my credit report yet, but I am expecting to hear from BCT very soon. What happens with the shortfall I will be due to owe? Can I spread the cost over an agreed period at an agreed cost? Never been in this situation before, but it isn't good!

[BotB]

Can I spread the cost over an agreed period at an agreed cost? Never been in this situation before, but it isn't good!

 

When you know what you owe, you can make an offer of payment by installments. They may want to see an income and expenditure statement from you before accepting if its a lot less than the agreed payments.

If you check the forum for "other helpful organisations" you'll find links to websites that give debt advice - you'll find that others will have asked the same questions as you so the answers will be there for you.

[Ant84]

Quick update on this. Received a letter from BCT this morning, demanding £22,000 from me - YES, TWENTY TWO THOUSAND POUNDS! Haha, I'm going to tell them where to shove it.

 

They seem to think I owe them the entire sum of interest for the 5 year duration, even though I only had the car for 5 months and it is no longer mine.

 

Any views on this would be appreciated.

 

Thanks!

[LadyMaria]

Hi, I am in a similar position, my husband returned his car, which incidently was continuously breaking down and cost a fortune in repairs. While out of the country in July, the company, The Funding Corporation, took my husband to court, despite my daughter informing them he would not be able to attend. The action went against him, obviously. On our return I have filed to have another hearing on the grounds that the notice and court hearing were filed in his absence and they were informed, and all so because the costs they are trying to recover do not deduct how much they got for the car, I assume they auctioned it, but who knows as they haven't said yet. Anyway the courts are now arranging a new date, it cost me £65.00. In the mean-time I am starting to claim the unlawful charges from the funding corp. I wish you luck with your case.

Maria

[buzby]

They seem to think I owe them the entire sum of interest for the 5 year duration, even though I only had the car for 5 months and it is no longer mine.!

I just know you don't want to hear this, but I'm assuming it was either a Lease or HP acreement? I was in a similar situation years ago and discovered to my horror there was more small print concerning how they could shaft me if I defaulted, than if they failled me! Advice I received subsequently was to sell the car through an established dealership, noting the interest held by the finance company. This way there's less of a 'fire sale' and a vehicle with a list price of £21k doesn't suddenly become worth £9k due to it being sold to an employee of the finance house.

 

If they have the vehicle back, then they are supposed to use due dilligence in obtaining as much as possible in settlement, however if this happens at all I'd be MOST surprised. The figure you have received will be based on the profit they expected to make on the deal at its concludion (even then, the car may never have been yours, you would have to have paid, say £1pa in rent until it was scrapped.

 

The amount they will deduct from the sale with naturally come off this, meaning they will pursue you for the for the remainder. Due to the amounts, this will NOT be a small claims issue, and I seriously advise you to see a solicitor so that you are not disadvantaged in the proceedings to come.

[Ant84]

I just know you don't want to hear this, but I'm assuming it was either a Lease or HP acreement? I was in a similar situation years ago and discovered to my horror there was more small print concerning how they could shaft me if I defaulted, than if they failled me! Advice I received subsequently was to sell the car through an established dealership, noting the interest held by the finance company. This way there's less of a 'fire sale' and a vehicle with a list price of £21k doesn't suddenly become worth £9k due to it being sold to an employee of the finance house.

 

If they have the vehicle back, then they are supposed to use due dilligence in obtaining as much as possible in settlement, however if this happens at all I'd be MOST surprised. The figure you have received will be based on the profit they expected to make on the deal at its concludion (even then, the car may never have been yours, you would have to have paid, say £1pa in rent until it was scrapped.

 

The amount they will deduct from the sale with naturally come off this, meaning they will pursue you for the for the remainder. Due to the amounts, this will NOT be a small claims issue, and I seriously advise you to see a solicitor so that you are not disadvantaged in the proceedings to come.

 

Cheers.

 

Basically the situation is this;

 

I bought the car in January of this year. My business was doing really well so had no problems making payments on it. By May/June, work had gone really quiet, and there was no way I was going to be able to afford it. I phoned BCT to let them know this, and they refused to let me arrange anything with them in order to resolve the issue. I told them that if that was the case, then they'd have to come and take back the car as I couldn't keep up repayments at that time. The car was £17,000, and over 5 years, the total amount came to £33,000. I received a letter from them two days ago informing me that they'd sold the car for £10,850, and that my arrears were £22,150. They told me that I couldn't have their permission to sell it privately and make up the rest of the money myself to settle the agreement, so that was also a non-starter.

 

So to get this straight, I buy a car, own it for 5 months, they repossess it and now I owe £22,150 without actually owning ANYTHING even after I pay it (which I'm definitely not!)? Surely that's not right? It's not as if I was well behind with the payments - I'd missed one month's payment, and then I missed the following month's payment. A week after the latter was due, they were at my doorstep to take away the car.

 

They could have easily helped me here and got the settlement figure to end the agreement, but they wouldn't play ball, so why is it now me (noting that I never once had ownership of the car) that has to foot a £22,000 bill, and still be left with nothing?

[Ant84]

BUMP!

 

Any advice on this, please?

[LadyMaria]

Don't know if this helps, but the Funding Corporation, did not in my opinion use diligence and sold the car for a lot less, didn't tell us how much. The only way I could get information was to write using the Data protection access letter. They then took my husband to court for £9000, and tried to put a claim on our house. The court summons and hearing date were when we were out of the country, so the court found in their favour, however, being brave (thanks to this site) I took it back to court, with a list of of unfair charges (one charge was £165.00 for a letter) the true value of the car etc, to get the total amount owed reduced. The judge was excellent, he threw the whole thing out of court because we were served (or not) illegally as we were out of the country and the funding corporation knew that. They FC didn't attend court, the judge was not impressed, so now we wait and see what their next move will be. It has taught me that the courts are there for us poor folk as well as the big guys, so don't be afraid of standing up for what you believe is true. I would never have taken it back to court before fighting the banks through this site.

Good luck

 

Cap 1 paid in full (interest and court costs)

Barclays : awaiting court hearing date

Maria

[buzby]

The sad fact is it's all spelled out in the contract - and the courts have found selling at a public auction allows the true owner a chance to liquidate their investment, then pursue the hirer for the balance of the contract. Saying it was undervalued and the vehicle could have went for more just doesn't cut it - if the buyer's weren't there on the day that's not their fault either.

 

I've been caught this way before and I will no longer enter into agreements like tihs as they are loaded against the purchaser, but until it happens you don;t realise how all your investment can disappear very quickly - never mind any depreciation.

[Ant84]

Another thing I haven't mentioned is that I had a private registration on the vehicle. When the bloke came to repossess it, I told him that BCT didn't have my permission to sell the car whilst still registered under my private registration. I contacted DVLA, but they managed to mess up the situation in any and every way possible. In the end BCT just sold my car with the registration still on it, and now DVLA tell me I can't get it back.

 

Surely that's breach of contract on BCT's part?

[buzby]

No - as your contract will probably state that everything you attach to the car subsequently belongs to it and cannot be removed without permission. Usually this means an after-market install of a DVD or super in-car hifi system, but it works well for Cherished Numbers too. As soon as problem loom and you know there's a chance you might lose the vehicle, go to the DVLA and get the number moved off to a Retention Certificate (it costs £80). Your car is given a free replacement number and a replacement tax disc is issued. It's fast and painless and although the finance house won;t know what the replacement number is, DVLA do thell them there's been a number change.

 

After the event, you're stuffed - especially if they want to inspect the vehicle - they don't often do this for vehicles under 5 years, but they can do.

 

At auction, the car is sold 'as is' complete with the number, unless you can agree with the new buyer of a problem and they sympathise with you. However, if it adds anything to the cars value, they may not be interested.

[Ant84]

I contacted DVLA before I got in touch with BCT to let them know I couldn't afford the car. DVLA managed to screw up everything with new problems every time, and BCT eventually sold the car before DVLA had done anything.

 

So, if I refuse to pay this money (which I am doing), what's going to happen?

[buzby]

So, if I refuse to pay this money (which I am doing), what's going to happen?

 

I'm assuning you mean the demand from the financial company over the outstnading balance they'll be claiming froim you - less whatever they realised from the sale of the vehicle?

 

The first thing is to challenge the figure, so that they don;t get a clear run to a court default. In the past these firms have ridden roughshod loading charges and penalties and interest on penalties (all illegally calculated) to arrive at a final figure they'll pursue you for, based on the fact most folk roll over and agree to either staged payments OR a % of this as a full and final.

 

Ensure you get a full breakdown of their demand, and go throught it meticulously, reasind from your contract what they are entitled to charge you on contract termination - and ensure they're not loading the porice to reflect all the profit the WOULD have earned if it went full term - that's a no-no.

 

After you get their figure - and ensure it is a full breakdown of all charges applied taking into account what you've paid and the crediting of the vehicle's sale price etc - no NOT accept a figure alone and unqualified by calculation.

 

You do have to be reasobable and put your hands up and admit that wou were unable to complete the arrangement as planned, but that said, you're no mug either and whilst they are entitled to make a profit on the transaction, any unlawful loadings or penalties will be challenged down the line. (This way, they may arrive at a more realistic figure and you can agree to stage repayments to clear the revised debt).

[breadline]

Another thing I haven't mentioned is that I had a private registration on the vehicle. When the bloke came to repossess it, I told him that BCT didn't have my permission to sell the car whilst still registered under my private registration. I contacted DVLA, but they managed to mess up the situation in any and every way possible. In the end BCT just sold my car with the registration still on it, and now DVLA tell me I can't get it back.

 

Surely that's breach of contract on BCT's part?

 

you should of been given an allowance for what teh number plate was worth, although the car does get repossed they have to take into account any modifications that you have done to increase the price of the car.

 

I would be interesed to know the minimum amount they found acceptable on the sale of the vehicle, Car repossesions can have dealers already set up and these sales are being agreed long before the auction begins.

 

Dealers are already in place they view and phone through an offer to the finance company the item is then agreed to be sold and auction house is paid thier percentage. Sadly no one else gets to view the car at auction.

 

Always ask questions this is your car being re sold to clear your debit.

 

My best advice..

If you have your car repossesed for auction request where itis being auctioned and go and watch it being sold.

[buzby]

you should of been given an allowance for what teh number plate was worth, although the car does get repossed they have to take into account any modifications that you have done to increase the price of the car..

 

I have no idea where you get that interpretation from, and as much as I like the idea, it has absolutely no substannce. Contracts go to great length to explain that any modifications or additions that are made to the vehicle - sun-roof, alloy wheels, radio etc, become a permanent fixture of the vehicle and may not be removed. The value of said vehicle with accessories then achieves its sale value on being returned. No 'allowance' for these improvemts would ever be contemplated, and even if it were, who is to decide the value?

 

Reg Numbers too are only worth the price if there is someone willing to pay it - the value a number gets when sold would pass on to the new purchaser if they can be bothered - at no time would there be any comeback from the original owner, as a vehicle and its registration form part of the sale, unless this was switched and replaced officially by the DVLA.

[breadline]

I have no idea where you get that interpretation from, and as much as I like the idea, it has absolutely no substannce. Contracts go to great length to explain that any modifications or additions that are made to the vehicle - sun-roof, alloy wheels, radio etc, become a permanent fixture of the vehicle and may not be removed. The value of said vehicle with accessories then achieves its sale value on being returned. No 'allowance' for these improvemts would ever be contemplated, and even if it were, who is to decide the value?

 

Reg Numbers too are only worth the price if there is someone willing to pay it - the value a number gets when sold would pass on to the new purchaser if they can be bothered - at no time would there be any comeback from the original owner, as a vehicle and its registration form part of the sale, unless this was switched and replaced officially by the DVLA.

 

I gather you have worked with in these circles. any lender working to reduce the balance outstanding on their books, would sell the number plate for what it was truly worth and apply it to the account.

A number plate does have a market value.

So example a £3000 number plate would no more be given away by the finance company, who would be working towards thier monthly collection goal, then the company would be to give you a loan without interest.

And do you honestly think a £5000 set of gold plated wheels imported from pimp my ride would also go with the car. Wake up call (Shake shake)

 

Are we to believe that You have repossessed cars and resold them?

[buzby]

I think we both realise there is money to be made from Cherished Numbers, but the only folk who do with any certainly are the DVLA! The problem here is to whose benefit would the realisation of a 'fair' price for a number plate actually be? Certainly not the finance house, as after the sale they come after the renter with a bill for the residuals and will pursue them. I remain convinced that they take a perverse pride in skewering anyone who doesn't meet their contractural obligations, and I've yet to hear of anyone looking after the interests of the defaulter - there may be someone with a golden heart out there who may take a Christian attitude to the renter's misfortune, but they'll certainly be in the minority!

 

As I mentioned earlier, what consitutes a cherished number is open to interpretation, I have owned 3 for almost 30 years now, (nothing flash, just my initials and a 4-digit number to disguise the age of the vehicle). However, DVLA for years have fooled many people into putting a value on plates that actually bear year letters, simply because they can play with the initials or word created. So, a 2005 car, bearing a 1967 plate (with an 'E' suffix) is somehow valuable? I wouldn't give it house room or think it worth the £80 transfer fee, but folk queue up because someone somewhere, probably a dealer, 'invents' a value for it. And let's not forget, you're only buying a right to use, the number is never 'yours' and should the DVLA decide we all switch to barcodes in 2009, this investment will disappear overnight fdor a non-cherished 24-digit number.

 

Sorrey, I drifted off topic. A finance house isn't going to bother achieving a high value for something as fickle as a cherished number. If it's A1 or something genuinely pre-1950, then they might - but if it's just the former owners initials on a plate with a year letter, there really IS no value, and they're not in the marketplace to diversify their interests.

 

As you your last line - you got some words in slightly the wrong order - I've had cars reposessed, but I managed to rescue my plates before the vehicle went back!

[breadline]

Well coming from some one who repossessed cars for 2 years you have no ideal what goes on behind scenes.

 

My advice to anyone who has a car repossessed is take photos of your car, possible cam recordings, follow your car to auction and take evidence again.

 

What i have witnessed in my employment bares belief.

 

And as for the lender having a golden heart for the owner, yes your right there is zero chance of that, but an account manager who has the ability of gaining an extra £200 bonus that month belive me they will make sure they get it, and by getting that they have to increase thier collection turn over.

 

So as I say unless you know behind the scenes you have no ideal and are in no place to comment.

 

Sorry about that but its the way it is, I most certainly would not take the time to post here and reply to your comments unless i knew i was correct as I have better things to do with my time.

[buzby]

Well coming from some one who repossessed cars for 2 years you have no ideal what goes on behind scenes. My advice to anyone who has a car repossessed is take photos of your car, possible cam recordings, follow your car to auction and take evidence again.

Sorry about that but its the way it is, I most certainly would not take the time to post here and reply to your comments unless i knew i was correct as I have better things to do with my time.

 

First I thought we were on the same hymn sheet - but I see we're not. "Follow the car and take pictures" ? Excuse me? "Go to the auction and take evidence". Of what exactly? Some things that may have not crossed your mind;

 

1) The car is removed on a trailer, the hirer is not told where it is being taken (there is no disclosure right).

2) The finance house subcontracts third parties to dispose and submit achieved funds (less expenses).

3) Challenges to the 'fair market value' have never to my knowledge succeeded where the vehicles were sold at public auction. Prolonging the agony of seeing your pride and joy go under the hammer at £11k when it is worth £15k is one thing, finding your account allowance for the vehicle sale is just £9k, because expense of the sale and agents are an allowable expense.

 

So - giving you the same respect you've kindly afforded me, I suggest you stop giving members false hope and needless 'busy work' that they have a realistric chance of doing anything at this late stage to mitigate their losses, either before during or after a sale, and in expecting any recompense for a worthless 'personal plate' I may only have had one car reposesssed, but the information I gleaned ensured I never lost out more than I should, and my interest in how the banks treated customers in similar situations has not changed.

 

The bottom line? It's only a car - mitigate your loss, and if it's going to have to go back, act quickly to ensure any additional value you have given it remains with you and does not benefit the lender.

 

And a final tip - the DVLA hold additional information about your vehicle that is not shown on the V5 or disclosed to you as a Registered Keeper. Finance houses have the ability to note their interest in the vehicle and can be advised of any changes to specification (and registration number) without your intervention or agreement. This should not be confused with the HPI database, which additionally holds data. A current action I am currently pursuing against a bank, is having their 'interest' in my vehicle removed from the DVLA records. The agreement was concluded, however the bank having missed out on serveral £1k of punitive charges for bumped-up fees stopped all action for recovery - because they knew they'd lose - but they refuse to update the vehicle record and the DVLA (and probably HPI) hold incorrect (and adverse) data. Fair? Reasonable? Of course not, but the more you know, the more empowered you become.

[breadline]

suggest you stop giving members false hope and needless 'busy work

 

I have no intention on replying to this and if you feel this is an issue then please make your concerns known to admin immediately.

I stand by what i advise, I have witnessed 1st hand what I have advised. Therefore I will be happy to continue this once you have logged your complaint.

[Ant84]

So, in a nutshell, am I liable to pay every single penny they ask for? Is there any way of getting out of it, or getting the amount reduced?

 

I'm 21 and, to be honest, I can't afford to be paying £22,000 back for something I don't even own. As I've said, what's the point in repossession if I still had to pay for it all?

[buzby]

Well - like any arrangement, if you make an agreement and don't keep your side of the bargain, you can be held liable for those actions. There's nothing magical that can be done to make it go away (short of plastic surgery and a new identity). An IVA and Bankrupcy are other ways to resolve the issue if it becomes unmanageable. HOWEVER, the golden lining is that many of these firms get greedy, trying to load the arrangement so that it quickly becimes impossible for you to know where to start, never mind paying anything off.

 

You can be an effective thorn in their side by querying the validity of EVERY default charge applied to your account - taken in isolation they may not look much, but together it's a different situation. Their penalties may be punitive, and you could argue in court that despite your best endeavours, the finance house has not worked with you and conspired to deprive you of your car, the money you paid etc etc (get the picture?).

 

Debtors normally sit placitly whilst they get their teeth kicked in, but not here! Get a statement of charges, push them for a breakdown and ask politely for them to be re-calculated as you feel they are unreasonable. If they don't, they'll have to take you to court and then you get your chance to explain why the charges sued for are unjustified. Remembering that you don't even have the benefit of the vehicle, you may find the courts particularly helpful.... so it's not all bad news, honest!

[Ant84]

Well - like any arrangement, if you make an agreement and don't keep your side of the bargain, you can be held liable for those actions. There's nothing magical that can be done to make it go away (short of plastic surgery and a new identity). An IVA and Bankrupcy are other ways to resolve the issue if it becomes unmanageable. HOWEVER, the golden lining is that many of these firms get greedy, trying to load the arrangement so that it quickly becimes impossible for you to know where to start, never mind paying anything off.

 

You can be an effective thorn in their side by querying the validity of EVERY default charge applied to your account - taken in isolation they may not look much, but together it's a different situation. Their penalties may be punitive, and you could argue in court that despite your best endeavours, the finance house has not worked with you and conspired to deprive you of your car, the money you paid etc etc (get the picture?).

 

Debtors normally sit placitly whilst they get their teeth kicked in, but not here! Get a statement of charges, push them for a breakdown and ask politely for them to be re-calculated as you feel they are unreasonable. If they don't, they'll have to take you to court and then you get your chance to explain why the charges sued for are unjustified. Remembering that you don't even have the benefit of the vehicle, you may find the courts particularly helpful.... so it's not all bad news, honest!

 

Thanks for that, mate. It's good to know that it's not all doom and gloom and that there might be some light at the end of the tunnel. Really annoys me how these greedy companies have got their backs covered in every way, yet the consumer has no protection whatsoever. I'd hope that any decent judge would want to put a stop to these finance companies taking consumers for every last penny they have.

 

What's the next step for me now, then? Get in touch with them and ask for a breakdown and a re-calculation?