hire purchase voluntary termination - Mullard

[welly_59]

I'm trying to do a vt on my hire purchase of my car.

 

I've paid half the money due.

 

I've contacted to finance company and

 

they are trying to say that if I vt then they will sell the car at auction

and I will have to pay any shortfall in the cash raised.

 

I say they are wrong,

 

am I right?

[oddjobbob]

Yes you are correct, UNLESS it's a lease or personal loan - i.e. needs to be a standard HP agreement, and payments not in arrears.

 

 

The half is half of the total amount due on the agreement, so if you borrowed £5000 and the total repayable is £7500 you need to have paid £3750.

 

 

And there is no mark on your credit file due to doing this.

[National Debtline]

Hello there,

 

If you are looking to excercise your voluntary termination rights you *must* do this in writing. We have a sample letter that you can use which you can find *here*.

 

You can terminate so long as you haven't defaulted on the agreement. Arrears are fine so long as the creditor hasn't served a default notice which has expired without you bringing the payments up-to-date.

 

Once you VT, the value they get for the car at auction is of no concern to you. The only concern you have is that have either paid 50% of the finance or more - or that you will ensure that you do so at somepoint after you've terminated.

 

Our fact sheet explains more.

 

Best wishes,

 

David @ NDL.

[welly_59]

Thanks guys, I knew I was right but wanted assurance. I have asked them to put their position on this to me via email, as soon as I receive it I will post here.

 

I have also contacted the citizens advice bureau and the consumer credit association who agree with me.

[National Debtline]

You're on the right track for sure. You just need to ensure that you've made it clear that you've exercised your right as per section 99 of the Consumer Credit Act.

 

David.

[welly_59]

This is the email reply i just received from them:

 

Further to your telephone call today

you requested I send you an email to explain voluntary termination:

 

If you wish to voluntarily terminate the contract you may do so,

I will arrange for the auctions to collect the vehicle,

 

once collected it will be sold

 

if there is a shortfall after it has been sold Mallard will contact .....to put an arrangement in place to clear.

 

I strongly suggest that you use the 50% handback clause (we have emailed you the relevant paperwork),

with the 50% as long as you have adhered to our criteria you will not be left with an outstanding debt which is beneficial to you.

 

Yours sincerely

 

 

The 50% hand back clause they are trying to make me do consists of me driving the car 200 miles to their offices, paying £100 for an independent assessment from the aa and leaving the car taxed for them

 

Their 50% clausr is explained to me like this:

We understand that you wish to terminate your agreement with us under the “termination-your rights” or 50% clause.

 

There is a set procedure that you are required to follow and

we enclose herewith an undertaking document which both explains the procedure in more detail

and sets out your responsibilities in respect of the condition and delivery of the vehicle.

 

Once you have read the undertaking you must complete and return it to us at the address above,

together with the current inspection fee of £85 and any other amounts due.

 

Please note that the vehicle must be driven to this office where it will be inspected

to ensure that it is in a condition that will allow you to take advantage of the termination clause.

 

In addition you must keep the vehicle comprehensively insured until it has been delivered and accepted by us.

 

Finally, we confirm that the termination will be recorded on your credit file.

 

Yours sincerely,

 

Mallard Vehicle Finance

 

And this is what they want me to complete for their 50% clause:

 

I/we wish to return the above vehicle under the terms of the “termination – your rights” clause.

 

I/we have paid 50% of the total amount payable or if not, agree to pay £0.00 together with outstanding charges of £nil

to bring the account up to the 50% figure (inclusive of all outstanding arrears, if any).

 

I/we confirm that any amounts payable must be paid before another instalment falls due (see next payment date above),

together with the inspection fee of £85.00.

 

In addition to the above, I/we agree to repay the outstanding insurance balance of £0.00 (see clause10 of the agreement), if applicable.

 

I/we have received and return herewith fully completed a Condition Report.

 

I/we confirm that before I/we attempt to deliver the vehicle in accordance with the provisions below

I/we will procure confirmation from Mallard Vehicle Finance that the Condition Report

demonstrates that the vehicle appears to be of satisfactory condition

and meets the standards required to enable me/us to take advantage of my/our rights as described above.

 

I/we note that subject to the above the vehicle must be delivered to the office of

Mallard Vehicle Finance at Hophouse, Maltings Park,West Bergholt, Colchester,CO6 3TJ where the vehicle will be inspected.

 

I/we also acknowledge that if the vehicle fails to comply with the Condition Report

sent for whatever reason or is delivered with any of the items in the list 1 – 6 below missing,

 

I/we will not be able to take advantage of the returns clause.

 

Delivery to the above office can only take place, Monday to Friday, 10.00am to 4.00pm on normal working days.

 

Please ensure you telephone for an appointment to deliver.

 

I/we confirm that the car is in a good and roadworthy condition as specified and will be delivered complete with:-

 

Original V5/logbook (a copy is not acceptable)

Current MoT (minimum unexpired validity 6 months). Actual expiry date:……..

Service history or proof or service within last 6 months

The Radio/Stereo Code ……………………………...

Spare or additional keys (confirm number)………….

Current road fund licence (vehicle must have a current tax disc.) Expiry:……….

(The vehicle will not be accepted if items 1,2,3,4 & 6 are missing/not as stated)

 

The vehicle will also be cleaned inside and out and my/our personal effects removed

and will remain comprehensively insured until it is confirmed that it is acceptable for return handover.

 

Signed:……………………………………………..Date:……………………………..

(Where there are 2 hirers both should sign)

 

Mallard Hirer Condition Report

 

Complete the form below making sure your description is as accurate as possible.

 

Please note if the vehicle arrives and the condition of the vehicle does not match your description the vehicle will not be accepted.

 

Please mark on diagram using the symbols

Below.

 

Current MOT expiry date:………………………

 

Current Road Fund Licence expiry:…………………….

 

All tyres including spare tyre must have at least 2mm tread depth over ¾ of the tyre surface.

 

Put simply I should not do this and just do a voluntary termination?

[theoldrouge]

you MUST terminate using the nat debtline letter under s99,

 

pers I would add this to that letter--

 

You will be well aware that statute prevents you from levying a charge for the collection of this vehicle,

guidelines also state that if you require me to deliver this vehicle it must be no more than a short distance from my registered address.--

--do not sign any of their forms,

they must allow vt under the terms of s99/100 not their terms.

It is very much in your interest to be present at the condition inspection nothing to stop you having it done at your premises

and tell them to be present and to collect the car

[dx100uk]

CORRECT

and there should be NO CHARGES either.

 

dx

[National Debtline]

Under a VT they can expect you to return the vehicle, however the distance should be around the same distance from your home as the place where you bought the car from. In short, it needs to be reasonable. If they do not allow this, it would be likely that they will be falling foul of the Unfair Terms in Consumer Contract Regulations 1999.

[welly_59]

Thanks so much for the advice! The journey to their office from my house is 360 miles longer than the journey to the car dealership for a round trip so I think that can be ruled as unreasonable lol. I'll get my letter written up tonight and post it for your perusal before I post it

 

this is my letter, my repayments are over £1500 a year so i can terminate with 14 days notice instead of 28. i am going to send it when i return from holiday incase they try to contact me when im away:

 

Dear Sir/Madam

 

VOLUNTARY TERMINATION OF AGREEMENT

 

Account No: (xxxxxxx)

 

I am writing to notify you that I am exercising my right to terminate the above Agreement under Section 99 of the Consumer Credit Act 1974. You will understand that the aforementioned section permits the debtor to terminate the agreement at any time before the last payment is due. There is no restriction regarding the exercising this statutory right, particularly none in respect of any perceived arrears or monies due on termination

 

I understand that I shall be liable to you for the amount calculated under the formula in Section 100 of the Consumer Credit Act 1974. As I have paid more than the amount calculated under the formula in Section 100 the amount due is zero.

 

The above agreement will be terminated 14 days from the date of this notice.

 

Please send me details of how the vehicle can be returned to you.

 

You will be aware that statute prevents you from levying a charge for the recovery of this vehicle; guidelines also state that if you require me to deliver this vehicle it must be no more than a short (reasonable distance) from my registered address.

Please confirm receipt of this request by telephone/email within 7 days of receipt (my number / email address).

[gregs07]

Stick to your guns. It's unfair what they are asking the car needs to roadworthy i'd cash the the tax in too. Best of luck.

[welly_59]

last time i vt'd a car i kept the tax, the guy collecting it actually give it back to me and said he doesnt need it. these lot though are acting like a bunch of jokers right now.

 

I told them that i had vt'd a car before so i know the procedure and they replied 'but you havent vt'd with us before sir and this is how we do it', uh sorry mallard the consumer credit act is law and it over-rules any unfair clauses you have in your contract

[welly_59]

Ok update on this guys.

 

 

I sent the letter to them last week,

 

 

received a snotty phone call yesterday 'highly recommending' i follow their procedure to return the vehicle.

 

 

I insisted i want to do a vt as per s99 and again they insisted i would you the shortfall when they sold the car.

 

 

I immediately sent off a letter of formal complaint stating again that i wished to vt as per my original letter

and that the 14 day notice period was still in effect from the date of the original letter.

 

Today i have recieved an email with a breakdown of the money that i would owe them f i vt. I will post the contents once i get home.

 

This is literally making me sick

[sequenci]

Get the FOS involved. Request their complaints procedure. Keep all information and e-mails.

[theoldrouge]

since you have paid over half the total agreement, and the car is in reasonable condition for its age,

 

regardless of what they say, you will not owe them anything.

 

stick to your termination date, and do not sign any of their forms,

 

and as sequenci says it can go to the fos to resolve if they do not comply

[SeanG79]

As the others have said, and I would complain to the FCA (Financial Conduct Authority), they are pushing for fair treatment of customers.

[Conniff]

This is dragging out - hows it going welly ?