Car finance hire purchase clause

[MarcA1888]

Hi , i have a hire purchase agreement with black horse, i have paid 22 out of 48 payments and i am looking to hand the car back to start Fresh. There is a baloon payment at the end of the term to keep the car but i want a new one now, i was told i could hand this back at the halfway (24month) point but upon read my documents it says it can be handed back once i have paid £14,775 which wont be untill november. Can i still terminate at 24month point or will i be liable to make up the difference to 14,775 ?

 

Also Any suggestions of how to get out of contract appart from trade in as i would still have nevative equity on the car.

 

Many thanks

 

Marc

Edited March 23, 2013 by Conniff

[Conniff]

Welcome Marc

 

You can hand the car back without penalty when you have paid 50% which can be different than the half way point of the agreement.

 

If there are any arrears, these will also have to be paid.

[MarcA1888]

Hi there and thank you for replying on this matter as i find it rather confusing.

 

To confirm you say 50% may be different from the half way point you mean that it may be more like 35 payments rather than 24 out of 48 ?

 

Basicaly the total loan repayable is 29,000 and when i have reached 14,500 regardless of which number of month i am on then i can hand back?

 

Thanks

 

Marc

[Conniff]

yes. If you go ahead with it, take pictures of the car before they have it in their possession, never trust them.

[crem]

Yes. The "1/2 way point" refers to the VALUE of the payments, ot the term of the payments. So if, for example, you had paid a £5,000 deposit, you are already well on the way to the 1/2 way value even before you pick the car up.

 

You also don't have to have paid 50% of the value when you VT the car, but of course you will have to pay them the shortfall to get to that value. i.e. you can terminate now, but you will owe them the difference between your payments to date (including deposit) and the £14,775 they say is the 1/2 value point.

 

Also, make sure you are clear that you are "Voluntary Terminating" the agreement and not doing a "Voluntary Surrender". They may sound similar but they are totally different in law! A VT is a legal option you have to end the agreement as denoted by a clause in the document and as such you owe nothing else and your credit file is unaffected. If you VS the agreement it means you simply want to give them the car back coz you can't afford the payments maybe, but it also means you are still liable for the full £29,000 cost. They will take the car, sell it (at a loss) then send you a bill for the difference to get to the £29,000. I am sure this isn't what you want to happen!!