Asking for a friend. Really. I'd never finance a car. I got a family member out of this once under a Hire Purchase agreement. I read the contract and it said that once 50% was paid you could give the car back. As long as it wasn't damaged, and then you'd have to pay for the damage also.
So if the car was £20,000 and you've paid £10,000 or more you're in the clear. But don't get the extra back. Over here it's covered by the Consumer Credit Act.
But I recently informed a mate about this, and he took it to the dealership, and they just point blank refused. And it's right there in the contract. People are now saying he has to employ a solicitor.
But thought I'd throw this out there. I know the law is different everywhere, but hardly anyone seems to know about this. Or maybe it's just people in the UK. 🤨
Hi Alex, I can shed you some light on this topic. What he needs to do is call the finance company and tell them that he wants to VT his car. VT stands for, Voluntary Termination. As you have written on your post, its exactly what a VT is. I had a car, paid half off,called the finance company and did a VT which they send out a form. Once they have it back they process it. I had to take my car to Manheim car auctions in Bristol, they are all over the UK, they took it off me and the log book and that was that. I had a letter to say its all ended and checked my credit score and it showed as settled and was able to get other credit such as phone and credit card. One thing to note though, even though I dont think they can legally do it but do anyway, they blackball you from further credit with them, a VT costs them a bomb so they arent pleased doing them. Your friend doesnt need a solicitor, just call their finance company and tell them they want to voluntary terminate the car. it is worth getting a hold of the BVRLA wear and tear guide book, its what is used to determine wear and tear damage to a car and stops the finance company taking the mickey. Mine tried to charge me a fortune for swirls and a few small stone chips, i used the BVRLA and argued it was wear and tear due to the age and miles on the car and that it is unreasonable for them to expect a 5 year old car with 144k miles on the clock to be in showroom condition.
Sorry for the long message, its a fairly straight forward thing to get going, its the finance companies hate doing them so can be a bit childish at the end, stick to your guns and argue with them.
Best wishes
Ben
Much appreciated @BenHannan it pretty much played out that way. It's great to have posts like this where people state their experiences. Even when I did it for a family member I remember asking over 4 solicitors to review the contract as a second opinion and none of them had apparently heard of voluntarily terminating a contract this way.
I think it's just people in the UK. They have no such thing here in the States
yet another reason for me to migrate to the States
Because of a dealership? There are sleazy ones all over the world, not only in UK!
Thank you @ScottyKilmer yet another reason for me to migrate to the States. I'll fit right in I promise. 🤣
Getting a lawyer / solicitor might be the only way to get it enforced.
I am curious to read the fine print of the section you are referring to. Could you link the text, or copy and paste the exact word for word text? I’ve never heard of such a thing. Very interesting.
I'm not very technical - I've worked out how to snip the image onto a JPG document, but I don't know how to paste that onto this reply. Be happy to do it if someone explained it to me, but here's the text if interested:
Termination: Your rights:
You have a right to end this agreement. To do so, you should write to the person you make your payments to. They will then be entitled to the return of the goods, and to half the amount payable under this agreement. That is (amount specified). If you have already paid this amount, plus any overdue installments, and taken reasonable care of the goods, you will not have to pay any more.
This means that you can terminate your agreement at any time before your final payment falls due by giving us written notice. You will have to return the vehicle and pay (i) any arrears and any other sums that are repayable under the agreement before termination (including any excess mileage charge). Plus (ii) the amount (if any) by which one half by which the total amount payable by you exceeds the amount paid by you including the advance payment plus (iii) if you do not return the vehicle in good repair and condition, the sum required to compensate us for this. This will be your maximum liability if you comply with these requirements.
Worth noting was the paragraph under the signed section:
"This is a hire purchase agreement regulated by the Consumer Credit Act 1974. Sign it only if you want to be legally bound by its terms. This agreement is made and becomes binding on you when you sign it. The goods will not become your property until you have made all the payments. You must not sell them before then".
I found the section (ii) pretty wordy, but it essentially means what they said in the first paragraph. It was also interesting that companies like "We Buy Any Car" said they can buy the car off you, but it says the opposite in the contract. Although I remember the finance company agreeing to this - but I'd get it in writing.
Learning as I get older that the less contracts and T&Cs in my life, the better it is.
From a quick look at Wikipedia, I think the best people to help you are the Financial Ombudsman Service
https://en.wikipedia.org/wiki/Financial_Ombudsman_Service
Very interesting. It seems your friend may have a case!