has any body here terminated a hp agreement, apparently I can terminate the agreement and the finance company will recover the car and I can walk away, seems like a good idea as the car isn't worth what I owe and ive gone over the half way point in the term. Has any one any experience in this practice ?
Best speak to the finance company to see how you can get away lightly. DaveK.
"DaveK" mumbled:
And find out whether it'll affect any future applications for credit.
Steve declared:
With UK HP the car is not yours until (normally, but check the small print) two thirds of the re-payments have been made, and if at *any time* up to then you default in the re-payments the HP company can repossess the vehicle and you lose *everything* and you still "have* to pay the outstanding balance. This arrangement varies from country to country, but this is the case in mainland UK. One other problem with defaulting on UK HP agreements - An entry can exist on your permanent credit record that is as destructive as a CCJ: A
*Default*. If you miss two to three payments of an agreement (Hire Purchase, Lease etc) the creditor can send you a formal default letter. A CCJ and a Default are both regarded as serious information by lenders etc. The problem in the case of HP is that you *cannot* pay or satisfy a Default: it is just there! An inexperienced clerk at any HP finance company can send a Default to you and have it added to your credit record without any supervision or even if you are not in serious default.I have heard that there are circumstances in which you can return the car, not owe any more money and they cannot put a mark on your credit file. I think it might be after you have paid 2/3 of the debt, but you'd need to check.
Apparently its becoming a common issue - the fall in used car prices mean that its more economical to walk away. I'd ask on uk.legal or go to Citizen's Advice and then follow it up on the relevant web site - the consequences of getting it wrong are pretty high!
Tim
Just doing it now, so ask me in a few weeks time!
Rang them, sent them a letter (recorded) stating wish to terminate, got letter back to acknowledge, this was a week ago, car being picked up today (must be road legal / suitable condition as per agreement), then I believe that's it.
Bollocks.
It's a contractual termination, the contract allows it so you are terminating as per agreement.
Well ive been in touch with the organisation recommended by watchdog and they have confirmed that if you have reached the minimum point in the contract to which is roughly two thirds then you can hand the goods back and not have to pay any more, and as you are exercising your rights under the contract then you have not defaulted on the payment. Assuming that the car isn't worth as much as I owe and the HP company would have to take the car and dispose of some how, maybe they would be prepared to accept an offer for the car around what it is worth ? I shall ring them tomorrow and find out !
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