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Vehicle Finance Termination Help!


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Hi there!


I'm hoping you may be able to offer me some advice.


Back in August my (2 year old - bought from new) car had to have the engine replaced due to a 'common fault' which causes the third cylinder to disintegrate. The manufacturer had the car for 9 weeks and during that time I lost total confidence in them and the vehicle.


I decided to VT the car and used the letter template from this website to do so. The contract I have states Hire Purchase at the top and has the standard 'nothing further to pay' statement but does include a balloon payment.


The finance company arranged for the car to be collected and taken to auction. The next thing I received was a bill from a debt collection agency for excess mileage and damages to the vehicle - my 'debt' has apparently been sold on to them without any prior correspondence from the finance company.


I wrote to them disputing the charges as i took photos on the collection day which showed no damage and they've since backed down on this point BUT they are still claiming £1,400 in mileage charges as they advise in an email that:


'The Consumer Credit Act stipulates that by paying over 50% of the total amount payable under a hire purchase agreement you may terminate the agreement with no contractual penalties. The excess mileage charge is your end of contract charges.'


Is this correct or does the 'nothing further to pay' stand? And if so, how best should i proceed with disputing the matter?


Many thanks!



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What did your agreement say about mileage?


How old was the car when you Vt'd it and what mileage did it have?


The agreement I signed states that on voluntary termination after paying 50% of the sum owed there would be nothing further to pay. I had paid 50% plus an additional £2,000 over and above.


Excess mileage was only mentioned in a separate terms and conditions document (unsigned) and says it may be payable on ending the agreement if we have exceeded 12k per year.


The car was 2 years and 7 months old at the time of VT and had 47k miles BUT only 6k of this was on the new engine.

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Also aren't I supposed to be notified by the finance company before they pass it over to debt collectors?


The company demanding the money came out of nowhere and I've had nothing at all from the finance company since they got the car back - I copied them in on the dispute letter but they appear to have ignored it. Am I supposed to just trust the debt collectors when they say they've been ''appointed by" the finance co and just hand over my cash?

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Thread moved to debt Collection Industry.

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