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Had crash,not my fault 3rd party failed to stop at scene. Car being repaired, new front door and sill. Because i have just paid two years off four year agreement. Can i give the car back to the finance company and walk away freeing me to buy another car with what i would pay anyway to the finance company. Feel car wont be the same wont enjoy driving it anymore. Anyone done this ie give a car back any problems???????
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Careful.
some finance deals are structured so that you own the car so it is collateral for the debt. In that case, IIRC giving up the collateral is deemed to be a default on the debt and might affect your credit rating. Getting a new car might then be difficult.
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Luckily not the case, Patently, though finance companies would love it if it were.
s.99 or 100 of the Consumer Credit Act 1974 (I forget) requires that any 'conditional sale' be structured, to protect against extortionate bargains, so that once 50% of the total credit price has been paid (i.e., if this has its usual meaning, of the total amount including interest) then the buyer is free to hand back the goods, if in reasonable condition.
This is then treated not as a default but as a settlement. If you get a good deal on the car in the first place, this is usually not much of an advantage - basically you'd only be better off if you spent more than half of the agreement in negative equity. However, where the car is/was overpriced/a big depreciator, this can be a useful way out of a deal that's strangling you.
In this case, the quality of the repair needs to be perfect and there will probably be deductions made for anything such as missed services, scratches, dents, rips in the seat, non-OEM parts.
The above provision is another reason why finance companies love PCPs - the balloon payment may amount to 30% of the total credit price, meaning that there is a much smaller time in which the car can be handed back. Oh and of course it goes without saying that it's only a good idea to hand back a car if it is currently worth less in a private sale than 50% of the total credit price...
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I agree my car worth £1850 trade owe £2800. Bought two yrs ago for £5300. Only got it cos of 0% and £400 fully comp ins
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How can you still owe £2800 after half the time if the car was only £5300 and on 0% finance? Or are you about to make the payment that will push it below the limit?
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Luckily not the case, Patently, though finance companies would love it if it were.
Now there's a useful piece of information ... thank you. Odd how finance companies alert you to every aspect of the legals & financials about the contract except that one.
I thought they liked PCPs because the car was still legally theirs, so if you default they ask the manufacturer for a new key for their car and turn up to drive it off. No need for messy and expensive court action to transfer ownership.
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No, that's contract hire. A PCP is just a conditional sale where there is a balloon payment at the end.
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IIRC, when I was in the Finance bus. the total HP or Credit price was the cash price of the car plus all the finance charges. Once 1/3rd. of this had been paid repossession in case of default was not legal without a court order. Naturally we made every effort to repossess from a late payer before the magic 1/3rd. had been paid.
Once 1/2 of the total credit price had been paid the hirer could return the car, pay any arrears and after making due allowance for unfair wear and tear, that was the end of it for him. This often could cause unfair loss to the finance co.as even after making allowances for damage it was hard to sell the car for the outstanding balance. Of course the punters were NEVER reminded about this option - they had to know & ask!
Oh, yes in the dim & distant days we would never again advance credit to them and always made it clear if approached for a reference how the account had been conducted.
Roger.
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If, on the other hand, the borrowing is a personal loan not tied to the car - tough - keep paying! Much easier (at that time) to get a judgement on a PL than HP, which is one reason why many finance houses switched to loans for cars.
Anyway, finance reps had better things to do than lurk in grotty alleyways in NW10 to snatch some tired old heap, neglected by the hirer as he wasn't paying for it!
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Especially after a hard day trying to get (clean!) new business! Many is the time I and a colleague lurked to repossess and knocked on doors very late at night - before so called "harassing" defaulters by late evening collecting was not allowed. You might find it hard to believe, but we received no overtime pay whatsoever for all this after hours work and many were the nights when I returned home well after midnight absolutely cream crackered.
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Good lord, that's pretty much how it was with me too! Remember going to do a repo on the Leigh Park estate in Portsmouth. It was 1990 and hand-portable phones were still relatively rare on the streets.
As I walked through the precinct, past the boarded up shops and gangs of skin-heads, my 'phone rang.
And I ran like I've never run before!
I can't say I miss those days.
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You were late in thr biz., N.D. I worked for the self styled "Britains Best Finance House" from 1967 to 1974. When It was swallowed by Natwest I bailed out & set up an agency - Big Mistake! Not long afterwards the min. deposit went up to 40% and the maximum repayment to 24 months! Result - little new business and soaring defaults. We used to underwrite by the seat of our trousers - no credit scoring rubbish and there WERE definite "no credit at any price" areas. These days it's all computers and no personal contact.
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I don't think I would have been much of an asset to the personal finance industry in 1974.... I was 4.
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I was a debt collector in the late 70s/early 80s for a company who specialised in lending £5 - £50 to people who couldn't afford it and then lending them more money to pay for the original loan.
Many is the time it took two of us; with one in the car keeping the engine running and the passenger door open ready!
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