Novation vs Volutary Termination

[kologna]

Hi

 

My brother acquired an Audi A4 on finance with Hitachi Vehicle Solutions three yrs ago (originally 3 yr agreement...with right to purchase at the end of the three yrs).

 

Initally the car gave numerous problems and was finally replaced by the Audi dealer. At this time, my brother who had a change in career & was rewarded with a reduced pay, decided to extend the term of the agreement to 4 yrs.

 

The agreement is due to end next July, and he is currently a month in arrears, as he struggles to meet the monthly payments.

 

Option 1: Selling the vehicle privately would mean that he would have to make up the shortfall as the asking price is less than the amount outstanding on vehicle

 

Option 2: Novating the agreement has proved futile, as the pundits who have been interested have failed Hitachi's credit scoring system (3 pundits so far!)

 

Option 3: Voluntary Termination??? Sounds like a possibility, reading from other forum postings...can someone please explain how this could work...or has anybody Voluntarily Terminated an agreement with Hitachi?

 

It does sound like this could be the answer to my brother's challenge...any help/suggestions would be greatly appreciated.

 

P.S - Is there a template letter to request the VT of an agreement?

 

Thanks

[sequenci]

here you are:

 

http://www.nationaldebtline.co.uk/england_wales/temp/5253_50081.pdf

 

more info on VTs in general:

 

National Debtline England & Wales | Debt Advice | Factsheet 16 How To Deal With Hire Purchase Debt

[kologna]

Thanks Sequeci, this information has been very useful (online so far)...i will get him to call the Nat'l Debtline this week, and will keep you posted.

 

Kolo

[kologna]

Question:

 

Granted that your credit rating is automatically affected, if you are in arrears with your finance agreement...i was wondering what long term effects, if any, does a voluntary termination have on the credit status of the individual?

[kologna]

Please help - as we are receiving conflicting information here!

 

We asked for a copy of the hire purchase agreement be sent, and have since discovered that the agreement is NON-REGULATED ...possibly because the purchase price of the vehicle was just over the £25000.

 

The agreement stipulates that 46 payments of £400 be made with a final payment of £10000 in the 47th month.

 

He has spoken with the finance company and they have told him that if he voluntarily terminates the agreement he will be liable for the HALF of the FULL value of the car (purchase price + interest = £30k) minus what he has already paid in installments.

 

Alternatively he can have them sell it at auction and then be liable for the difference.

 

How is this possible when he is only repaying 47 payments of £400

(approx £21000)?

 

Is he protected under the Consumer Credit Act (2006) which has since removed the £25000 financial limit, even though the agreement was signed in 2004?

 

Kolo

 

Also