Voluntary Termination of HP - Question

[cervinia]

Hi,

 

I am 2 and half years into a 4 year agreement with regards to my car. Basically the car at the moment is worth £3000.00 less than I owe under the agreement. I have estimated that by the end of the agreemant, the vehicle will only have a value equal to the Balloon payment that is due. So for the next 18 months as I have zero equity, I will be effectivley Hiring the car at way above Contract Hire rates, having effectively already done this for the last 30 months.

 

I blame this on the very high intrest rates that the manufacturer's finance arms charge and to get out of this agreement I am thinking of Voluntary Terminating the agreement as I completed well over 50% of the payments all of which have been paid on time.

 

The one nagging doubt that I have is, will this have an adverse effect on my Credit Rating?

[bakedalasker]

I'm afaid a voluntary termination (VT) will leave a "coded mark" on your credit file. This mark will be seen by all finance houses when they do a credit search on you. How they judge it will totally depend on the house itself.

 

I have heard stories of someone having a VT on their file but being pushed aside by a certain house because of one reason or the other. I know one companies VT is totally ignored. Suppose it is down to the actual house who you apply to.

 

Whatever, a VT leaves its mark.