Voluntary Termination of Car Finance

Hello there, I have paid over 50% of the agreement and no longer wish to have a car. I signed for voluntary Termination. What do I do now?

Hi Sarah, thank you for your question relating to voluntary termination.

If you've made all payments on time for your existing car and you're over 50% of the way through the agreement you are well within your rights to hand the car back (depending upon which finance company you have your current loan with and whether you have a hire purchase agreement or a personal loan).

All you need to do is call your current lender up and say you wish to "VT" your agreement and ask for detailed instructions on how to hand the car back. They may try and make it difficult for you but persist. I'd also advise to get your car serviced (if required) and make sure the car is in the best possible condition to prevent excess charges from the finance company when you hand the car back.

I hope that helps and if you need car finance moving forward please come back to us and make an application. When approved we offer a no obligation quote and you can buy a car from any dealer - we offer very competitive rates and can beat what the dealer offers. Kind Regards, Edwin

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Further Questions & Answers

Hi Wayne, thank you for your question and apologies for the delayed response.

From what you have said you're not terminating your agreement by handing the car back to the finance company. You're going to be part exchanging it via Lookers and they will be settling your existing finance for you (as they'll give you an amount for your current car in part exchange).

Do you know how much finance is outstanding and what your car is worth (trade value)? In all honesty as you're part exchanging the car for a newer one i wouldn't bother at all in getting the bumper repaired.

Just so you know we can beat dealer finance rates. Please make an application and once approved we provide a no obligation quote and you can buy a car from any dealer in the UK. Kind Regards, Edwin

Hi Edwin, It looks as though you have helped a lot of people.

I have looked through the Q&A below to see if there is a similar question to the one i have but my circumstances must be different as sometimes the answer is to have any damage repaired yourself but then other times it says to hand the car back and see what the dealer says.

My situation is that I have a VW Polo which is coming to an end of its 3 year term in November. I have had a letter from Lookers saying I can go into the branch I bought the car from and discuss the purchase of a new car.

I have cracked my back bumper and don’t know whether to get this repaired prior to visiting them. Can you advise?

Posted by Wayne O'donnell on

Hi Paul, thank you for your question.

As your car has been maintained to a good standard i wouldn't have thought the service history should matter. Also, i wouldn't mention the change in tyres as they may not notice.

However, i would advise that you call and speak with BMW and ask what the typical charges are when you VT your agreement. They should be able to advise further. Kind Regards, Edwin

Hi, I have a car on finance through BMW and I am soon coming up to 50% mark and want to VT. The car is serviced and its MOT is up to date but not with a BMW garage - is that a problem?

Also, the car originally had run flat tyres which I changed to normal ones. Would I need to replace the run flats to avoid any charges? The rest of the car is in good condition so I can't see any other reason I would be charged. Many Thanks!

Posted by Paul Robinson on

Hi Tamoor, thank you for your question.

As you have a PCP deal you would have to settle the whole agreement in one go rather than being allowed to make over-payments. Is this what you had in mind?

If so, the benefits are that you can save yourself quite a bit of money if you settle the agreement before it expires as you'll be saving the interest that would be due over the course of the 4 years. The only negative that i can foresee is that you may have to pay a small penalty fee for settling early. You'd have to check with the lender what this fee is or if there is one at all. Kind Regards, Edwin

Hi there, I recently took a car finance agreement for a 4 year deal. I have gone with the PCP option and was wondering what would happen if I wanted to pay the car amount off early?

There has recently been a high rise in overtime at work so I could earn a bit of money and pay the car off. What would the pros and cons of this be? Cheers

Posted by Tamoor Tahir on

Hi Gerry,

As long as you are 50% of the way through the term of the agreement (30 months) you should be able to terminate your agreement. Please take advice from your current lender though and make sure you follow their instructions to the letter. Make sure the car is in the best possible condition when it goes back too and you don't want any nasty charges applied at a later date. Kind Regards, Edwin

Hi there, I started a 5 year car finance agreement around 33 months ago and was wondering if I am able to simply hand the car back now to settle the agreement?

Is it the half way mark in terms of months i.e 30 months or is it a half way mark in terms of half of the payments before i can "VT" my agreement? I think the interest maybe be front loaded.

Posted by Gerry on

Hi John, thank you for your question relating to your son's car finance agreement.

The £1800 seems very excessive for charges on a 7.5 year old car. I'd imagine they are trying to recoup their losses as best they can. The £1800 may well be the difference between the price they received for the car at auction and the settlement figure on the finance agreement when your son handed the car back. This is a theory but you'd need to find out how much they sold the car for at auction. Is this possible?

I'm not a lawyer unfortunately and i haven't read the credit agreement that your son initially signed - i would 100% advise though to read the credit agreement and the terms relating to "voluntarily terminating" the agreement after the 50% mark was reached and seek some free legal advice. Most finance companies usually charge a few hundred pounds but £1800 is really high especially if you're saying the car was in fair condition.

I'd also take the case up with a manager at the finance company to see if this fee can be negotiated down dramatically. Good luck and keep me posted. I'm sure the rest of our readers would appreciate the outcome. Kind regards, Edwin

Posted by Edwin Miles on

Hi, my son returned a car after 50% of his credit agreement was reached. This car was serviced up to date and had been serviced by the manufacturer dealership 3 days before collection. My son asked the dealership if the car was ok for wear and tear items due to its age (he bought it as a 5 year old car). They told him that the car was ok, this included the fly wheel which was getting to its limit but due to the cars age was fair wear and tear.

The car was collected and after a week or so my son received a letter from some agency requesting £1800+ for repairs. I spoke to the agency on his behalf and with the agency's agreement. I asked them first of all what they were basing the condition of the car against (it was 5 years old when it was bought). A gentleman told me that he was basing it on a 7.5 year old car and what it should look like. And he also said that whatever happened a £500 bill for the flywheel was not negotiable. He asked what my son was willing to pay. I asked him for receipts for the repairs, he said that there were none. I asked him where the car was and he said it had been sold at auction.

Is my son being conned? Can this agency really demand this money. Where would my son stand legally?

Posted by John Walker on

Hi Mike, apologies for the delayed response.

Thank you very much for coming back and updating me on your daughters case. This will obviously offer a lot of comfort to people who are in the same situation when visiting this Q&A section.

I'm glad that the finance has been settled and that the finance company haven't come after you for any additional charges.

Hi Edwin, I wrote to you in January this year to tell you about my daughters finance company giving a sales pitch regarding her supposedly not getting credit in the future if she were to hand her car back.

Anyway, the car went back with a few scrapes, but the collection driver said it was in better condition than most he collects. The loan is settled and no come back from the finance company, so a result there! Thanks for all your help. Mike

Posted by Mike Drysdale on

Hi Scott, thank you for your question.

That's good news that you can "VT" your agreement but in relation to the service history it may prove beneficial to actually get the car serviced before you hand it back otherwise some lenders do have hefty charges that they can levy if the car isn't up to retail-able standard.

I'd also make sure the car has an MOT and full valet before going back to prevent any unnecessary charges too. It may be worth speaking with your lender to see what they can actually charge you for and make sure the car is in as good a condition as possible before you hand it back.

I hope this advice has helped you out a little. Have a good evening. Edwin

Hello, i have had a letter confirmation that i can send my car back on VT. But it states that it has to have an up-to-date service history.

I haven't had it done for the past year. Does this affect my VT?

Posted by Scott Lewis on

Hi John, you may well be able to VT your agreement and hand the car back but i'm not 100% on Santander's T&C's when it comes to voluntarily terminating your agreement. Your best bet would be to get them on the phone asap and ask a few questions. The car may well have to be in good working order if you wanted to hand it back. Please let me know either way as i'd be interested in the outcome. Good luck. Kind Regards, Edwin

I have a vehicle on car finance from Santander. I am more than half way through the agreement. I had a 60 month agreement and have paid 48 months. Am I allowed to voluntary terminate as the car is no longer usable. The turbo has blown on the car which has also seized the engine. The cost to get this repaired is £6500-8000. The value of the car is on £3500. What can I do as I don't want to paying finance for the next year on a car that has to be scrapped.

Posted by John Davies on

Hi Rick, the only advice i can give you is to obtain a copy of your credit report from "Credit Expert". This will show you exactly what Mercedes will be seeing when they do a credit check. Obvious other problems that spring to mind though are as follows: Are you on the electoral roll at your current address? Are you maxed out on all your credit agreements (if so lenders may see you as over-committed)? The old "VT" shouldn't be causing you any issues though as long as you made all payments on time to BMW.

Hi, My credit profile is A1, yet I have recently been refused a lease agreement by Mercedes Finance UK. I suspect this is because I did a VT 3 years ago with BMW. What are your thoughts. Merc' wont discuss why they declined me.

Posted by Rick Wright on

Hi Rebecca, are you actually 30 months of the way through your 60 month agreement? If so, you can hand you car back. If not you'll have to wait until the 50% mark has been reached. Please confirm. Edwin

Hi there, I am so angry in hindsight that I got a car on finance from Carcraft. We have paid off every month but now we have a daughter the car is useless as its a two seater smart car. But on the finance agreement it states that after we pay back half the amount due over the 5 years we can hand it back. Obviously this includes interest so, if we want to hand it back now and terminate can we do so if we have paid off the amount of the interest by itself? It's a bit complicated to write down but please let me know if you need numbers etc? Thanks, Rebecca

Posted by Rebecca on

Hi Jade, apologies for the delayed response. You are indeed within your rights to hand the car back to First Response (they will tell you where to take it or they will come and collect it) after you have paid 50% of the agreement. There may well be a fee involved to take the car back but this will be detailed in your finance agreement. Whatever you do please don't stop making payments otherwise First Response will come and take the car from you and it will damage your credit profile. Keep paying until the 50% has been paid and you're ready to hand the car back. Edwin

Hello, i am looking to "VT" in December and by then i will have paid over 50% of the way. My finance is with First Response. Do you know where i take it back to? I spoke with them and they got really funny about it saying i have to pay a liability fee even though it's over 50% of the way. I'm due a baby in Jan and am working till Dec hence why i need the car till then. I just feel in a dead end and I don't want them to repossess it. Thanks x

Posted by Jade Pancoust on

Hi Jane, what you're describing sounds like a PCP rather than a hire purchase agreement. The best way of finding out would be to call Ford Credit. It may be an option but i'm not 100%. Edwin

Hi, i have a car on Ford options where i pay a monthly fee for two years and then have the option to buy the car, get a new car or walk away at the end. I have paid for around 14 months now but would like to finish early if possible. Can a VT be used with something like this? Many thanks

Posted by Jane on

Hi Matt, the finance company do reserve the right to charge for any discrepancies according to their T&C's. The only thing you can do is to negotiate the fee with a manager and see if you can get it down.

Hi there, I stupidly got a car on finance from carcraft a few years back but have kept up my payments and reached the 50% mark so now intend on sending it back. The finance company said the vehicles service history must be up to date with the manufacture recommendation or they will charge me £300 but when carcraft sold me the car it only had part service history then but I kept it regularly serviced on my part. Do they have right to bill me? and / or is there anything I can do to prevent them billing me? Thankyou

Posted by Matt on

Hi Matthew, handing back your car won't effect your credit rating as long as you don't miss any payments from now until the agreement is terminated. Please beware that your finance company can come after you for charges if the car isn't in immaculate condition. It'd be best to check with your current finance company the rules & regs as they change from lender to lender. Edwin

Hi Edwin, I am looking at buying a new car and have been advised by a salesman to VT my current vehicle as it has negative equity. Would this go against me getting a new car, I am 22, in full time employment and have a guarantor. I also have an average credit rating, I am worried in-case I don't get approved for a new car as I need a vehicle.

Posted by Matthew A on

Hi Matthew, you can get a re-print of your MOT certificate from the garage that carried out the MOT. The finance company can also see online via VOSA that the car has an MOT so you wouldn't be charged for the lost certificate :-)

Hi Edwin, I am in the process of VT'ing my car. It is in good condition has service history and valid MOT only problem is I have lost the MOT certificate, can I be charged for not having the paper certificate?

Posted by Matthew on

Hi Danielle, yes you are still eligable to hand the vehicle back to the finance company, however I would advise that you get the vehicle repaired and to a good standard before you hand it back, as the finance company will charge you for any damage and it is usually more than what it would be if you got it repaired at a local garage. I hope this helps. Edwin

Hi, I am over 50% of my car agreement but have just had 2 accidents in my car in January and last week. The first was minimal damage and the second last week was more damage. The car is in the process of getting repaired. Am I still able to voluntarily terminate??Thank you

Posted by Danielle on

Hi Michelle. Unfortunately you are liable for the condition of the vehicle. I would advise that you get the car up to scratch though a local garage (they will probably charge you a lot less than the finance company). I hope this helps. Edwin

Hello, I'm in the middle of VT'ing my car. I've paid more than 50% and within my rights but I'm worried that the finance company will charge me for a small bump in the boot and in my agreements it states that I should have the car serviced as per manufacturer instructions which I haven't. Am I liable for charges and how do they decide how much I should pay? Thanks

Posted by Michelle Thomas on

Hi Natalie, Apologies for the late reply. Do you have a warranty on the vehicle? If so then if the vehicle has been repaired 3 times (for the same issue) then you can legally reject the vehicle. However if not then the dealer is only responsible for the vehicle for the first 3 months. I would advise that you call the finance company and see what they suggest, they may be able to advise you a little better. Thanks, Edwin

Hello I bought a car on finance in April 2012 on a 3 year agreement. I have had nothing but trouble with the car since. The week I bought it I had to take it back to the garage due to an oil leak,a couple months later the car lost all power so had to take it back to the garage again and paid over £150 for new plugs, then the exhaust started blowing and when we looked under the car the hole had already been patched up with some gauze so the hole obviously appeared before I bought the car and now the car has an oil leak again in which the garage had "repaired" previously. I have had nothing but bad luck with the car and I really need to get rid before anything else goes wrong with it. Please can you help? Kind Regards Natalie

Posted by Natalie on

Hi Phil, Thanks for your question. The good news is that with a personal loan the loan is not secured against the vehicle so you can sell the vehicle privately and settle off the finance. I hope this helps. Edwin

Hi there, would you be able to help with a question? I currently have outstanding finance on my car through Black horse, I was under the assumption it was a HP agreement, but since speaking with BH, they have informed me that it is not HP agreement and has no VT rights.They say it is actually a personal loan agreement. Does this actually mean then that i am able to sell the car, as it is a PL and not secured against the car? I am wanting to get rid of the car, but i am unsure now as what to do. there is no option to PX as it has major negative equity, hence the reason i was looking to VT.

Posted by Phil on

Hi Matthew, May I firstly ask how long your agreement is for? As if you have paid half of the finance you will be able to voluntary terminate the vehicle. However if you are not half way through you will need to pay the difference. Alternatively if you want to keep the vehicle you can request a settlement figure from the finance company (This should be slightly less than what you owe as it reduces the interest). I hope this helps. Edwin

Hi I got a car on hp from car giant. i've only had it a year i've paid all payments on time but i've lost my job and want to end it and give the car back. How does that work? will they take the car back and will I still owe them money? Thanks

Posted by Matthew on

Hi William, I apologise for the late reply. I can only suggest that you call the finance company and ask the question. Most lenders we work with will require a fee if you exceed the agreed mileage. However this should be shown in your original documentation. I'm sorry I could not be of any more help.

Hi Edwin. I have been reading some of the comments as I am thinking about using my right to VT soon, However I dont remember agreeing a set mileage per year and I have done on average 13000 a year since I bought my car. Is this in every contract? Mines is HP and I have read over it and cant see anything about excess mileage. Thanks. William

Posted by William on

Hi Louise, I wouldn't ignore the letter. I advise that you check your original documentation and your VT rights. As I know that in most cases you are liable to pay for any damage to the vehicle if you want to VT it as it affects how much the finance company can get for the vehicle at auction. Your agreement may not be classed as settled until this payment has been made. It is usually advised that you get the vehicle in top condition before you VT as the fee will usually be more than what it would have cost you to fix it at your local garage. I'm sorry I couldn't be of any more help. Edwin

I have completed my VT for my vehicle and it was taken away about 3 weeks ago. I have just recieved a letter from an auction company telling me I owe them £450 for damage. The only damage on the vehicle was minor, a scuff on the alloy wheel and a small parking dent on the door. Nothing but fair wear and tear on a six year old car. Do I have to pay this or can I just ignore the letter?

Posted by Louise on

Hi Matt, as far as I am aware once you VT you do not owe anything. The only time they usually charge you is if you have exceeded the maximum set mileage or have done damage to the vehicle. I would advise that you call your finance company to discuss it further. Thanks Edwin

I have contacted fortis lease and they have agreed to vt my Honda, I have £6500 left to pay so I'm over my 50% . If they sell the car at auction for say £5000 will I be given a bill for the difference or is it just a case of handing it back

Posted by Matt on

Hi Darren. I would definitely advise that you go to a local garage and get the vehicle repaired as the lender will charge you ridiculous amounts for this (more than it would cost you to get it repaired). This will be stated in your agreement. I hope this helps. Edwin

hi, ive already phoned audi finanace in relation to my agreement and they have agreed i can vt next month.unfortunately some one hit my door in a car park today causing a fair amount of damage to the door....but as it was 50% fault me and 50% them we decided to sort our own damage.can i hand it back damaged or are they going to charge me?

Posted by Darren on

Hi Mike, I apologise for the later reply. With regards to the phone call your daughter experienced this is not uncommon. Many lenders try and make it as difficult as possible to VT an agreement. Saying that VT'ing an agreement will prevent her from getting a mortgage etc in the future is not true. It may however impact on her gaining a vehicle on HP in future as she will be seen as a slightly higher risk. However if she has kept up to date on her payments then it shouldn't make too much of a difference. I would advise that she doesn't cancel the direct debit as this will then go on her credit profile as missed/late payments which will definitely affect her credit profile. You need to be persistent with the finance company and don't miss a payment until the car has been collected. From experience as far as I know it is the finance companies responsibility to collect the vehicle and your daughter will need to keep up payments until the vehicle has been sold at auction. I hope this helps. Edwin

Hi Jake, All I can suggest is that you call the finance company and see what your options are. You never know, they may be able to find an alternative solution to handing the vehicle back that will suit your partner! Thanks, Edwin

Hi Edwin my daughter has a car on finance and next month the finance will be 50% complete, she rang the finance people yesterday to tell them she intended to VT the loan. What can only be describes as a sales pitch was launched on her, stating if she did this she would never get another mortgage, credit card or another loan for a car, ever. I don't think this is actually true, she has said that she will cancel the direct debit, but you do say that people should wait until the payment comes out of their account and the car is collected, is that so. Also who has responsibility for collecting the car? The lady has said just take it back to the dealers but they really do not have any stake in the car, do they? I would have thought the finance company have to arrange collection.

Posted by Mike on

Hi Edwin, Jake here again , I have looked in to my fiancé's documents, it's a 5 year deal and she is only one year and 3 months into it . Like I said her mum is a guarantor and I have looked into the documents and it says nothing about voluntary termination , any ideas or help would be great , thanks again Jake

Posted by Jake on

Hi Gary. There is no definite answer to your question. For example if you are wanting to take out another HP agreement some lenders may not like that you opted to VT your previous agreement and may decline your application. However if you kept up to date on your payments they may accept it. As far as I am aware it shouldn't really affect your credit score as a whole (as long as you have kept up your payments) and shouldn't affect your chances of taking out other forms of credit such as a credit card etc. Different lenders also use different credit scoring systems. Some of these will show up that you have voluntary terminated an agreement and others may show this up just as a settled agreement. I hope this makes sense. Thanks, Edwin

Hi Edwin.If I VT my HP finance agreement after the half way period of payments. Can or does this black mark my credit file ? I have so many differing opinions !

Posted by Gary on

Hi Jake, There may be something you can do. How long is the agreement? If she is half way through she could look to voluntary terminate (check your documents to see if you have this option) and hand the car back with no penalties. I hope this helps. Edwin

Hi, my fiancé and i have been looking of ways of giving her car back , she is only 1 year and 3 months into her contract but she has no job now. Her mum is her guarantor . Is there anything we can do to get out of the finance ? Thanks

Posted by Jake on

Hi Amy. Ok, if you have signed a HP agreement you should have voluntary termination rights. However usually the finance company withhold this right if you have not kept up to date on payments and may charge you if you have exceeded any mileage limit they set. This should be stated in your agreement. As far as I am aware you are entitled to VT as long as it is a HP agreement you have signed that does not exceed £25k (different rules apply here). I would advise that you contact the finance company again and see what your options are. They will have a copy of your original documentation. Keep in mind that sometimes finance companies can try and make it very difficult for you to VT but please persist. I hope this helps, Edwin

Hi Edwin, I am about 3/4 months away to completing 50% of my finananc deal, I spoke to some one from VW finance back in Sep 2012 about VT my car as that one of the options they gave me, however, looking through my contract, I cannot find where it states I can do this. Does it need to state this on my agreement? Or I am wihtin my rights to do so once reaching 50% of my deal? Thanks!

Posted by Amy on

Hi Maggie, This should not be showing as a default on your profile for 1 missed payment! Are you sure this is showing up on your credit profile? You may want to give equifax or experian a call along with the letter and request a check (it may be false information). If it does stand as a default then you can explain to them the situation and ask them to contact the finance company and request a revision. This should not affect your credit profile as its status should be settled! I appreciate how difficult they are making it for you but you need to persits! All the best - Edwin

Hi Edwin..further to my posts above about my injured husband and sending his car back under VT.....the finance company are not being helpful at all....they are saying that the late payment allthough being dissputed was not received until after the 30days clause was met....we had no idea about any 30 day clause..and we had received no letters from the company because we where out of the uk in Cyporus...I have explained to them all about my husbands injuries...they say that this is just black and white...and the late payment will stay as a default notice on our account for the next 6yrs although shown as sattisfied...I have now written as sugested a Notice of Correction on my husbands credit file...explaining what occurred...will this help to alter our credit rating...as at the moment we will not now be able to get our mortgage deal renewed ???? they have again been writing to our uk home address although the company know that we are in Cyprus and need to be contacted by email...help!!!

Posted by Maggie on

Hi Vikki, If you've kept up to date on your payments through the agreement you should be able to voluntary terminate. You need to give them a call and discuss your options. It is likely that they may try and make it difficult for you but persist.I hope this answers your question. Edwin :)

Hi I have finance through blackhorse and have paid 31 payments out of 60 ,I would like to voluntary terminate my agreement and I have been registered disabled and the vehicle is no longer suitable . It is in good condition would I be able to do this thanks vikki

Posted by Vikki on

Hi Katie, as long as you make all the payments required and don't cancel your direct debit before BMW have collected your car you won't get any negative marks on your credit profile - you can confirm this with BMW in writing beforehand. Kind Regards, Edwin

Hi, I have a hire puchase agreement with BMW and would like to surrender the car due to impending maternity leave, so that I can reduce the finances within the home. I have paid 50% of the agreement and BMW are happy to collect, however, I have been informed that by surrendering the car this would effect my credit score and possible black list me. Is this accurate. Also how long would this effect future finances.

Posted by Katie on

Dear Edwin, Thanks for your reply...sadly my husband will never get better or recover....but thanks for your well wishes....I have written a letter of complaint to their complaints department as advised. I am awaiting their reply. if not satisfactory I will then contact euifax and ask for them to assist.....are those the right things to do? many many thanks maggie x

Posted by Maggie on

Hi Adam, call your finance company and request a copy of your original credit agreement - once you have this you'll be able to read through the VT clause. Good luck.

Hi, thanks for the response. I don't have a copy of the terms and conditions. How on earth can I escape this mess or do I accept my fate?

Posted by Adam K on

Hi Maggie, that sounds outrageous! Firstly, i hope your husband is ok and recovering. Secondly, have you contacted a manager within your finance company to make a complaint? They will send you a complaints procedure that you'll need to follow. There should be no reason why there is a default on your file just for making 1 late payment. The account should show as settled on your credit profile - not in default. Have you taken a look at your credit profile to check the status? They could have given you the incorrect information on the telephone. If that's not the case and there is a default showing on your file you can make a "notice of correction". I'd advise doing this first and then take up the argument with the finance company. They are the only ones that can remove the default from your file. I'd also contact Equifax & Experian to see if they can have the default removed as they can place pressure on the finance company. Kind Regards, Edwin (Good luck).

Hi Adam, thank you for your question and apologies for the delayed response. I have heard of this happening before to be honest whereby a company won't let you VT the agreement if you have been in arrears. It is unfair i agree however, you may find that you can get round this by reading through the contract terms and conditions. Good luck

Edwin, Further to my earlier question and your advice to haggle over additional repair charges, I managed to haggle them down to £66 including collection fee and avoided any messy legal issues. Thanks for making me see sense.

Posted by Steve Thorpe on

Hi, my husband got injured seriously at work and ended up sending his car back under VT. He had paid 65% of the car. We had a disagreement with the company over the last payment. My husband was so ill that moth that the car went back 1 day into the next month. The company demanded another full months payment for that 1 day. We argued over it but eventually paid the full amount. But they have now put on my husbands credit rating rating that he is a defaulter, although he had never missed a payment or paid a late payment. What can we do as they are now saying that this default will stay on our credit rating for the next 6 yrs and we cannot now get our mortgage re financed - help !!!

Posted by Maggie on

Hi, It looks like voluntary termination is quite a common question on here. I am looking at doing the same but I did earlier in my agreement enter a default through being made redundant. I informed the company in question a told them my situation. It was then they issued me with a notice of default in which they threatened to repossess my car. I found another job 8 weeks later so I saved up the money and cleared the arrears and ever since then 14 months ago my account has been up to date, no late payments. Once I requested my VT they are saying that for this reason I am unable to hand the car back which seems quite unfair. Any advice would be very much grateful.

Posted by Adam K on

If the ex girlfriend keeps paying me the money for the car then i have no problems in keeping the agreement we have, but then all i have is her word that she will so i just wanted to find out what my options were in the event that things go bad that's all.

Posted by Adam Woodhouse on

Hi Adam, that shouldn't matter to be honest but if you were to VT your agreement you would have to hand the car back. Does your ex-girlfriend know you're about to do this? Edwin

Hi, i took finance out on a car which i'm well over half way of the payments. My problem is that because i have other means of transport i let my gf at the time have the car to use. We have split and i've allowed her to keep the car changing the v5 into her name. To VT the car would i need to have the v5 in my name? Cheers

Posted by Adam Woodhouse on

Hi Steve, i appreciate the question and if i'm being honest i'd get them on the phone and try and settle for £65. It'll save you a lot of time and hassle and it may be the best outcome you'll get. You can contest the charges completely but i don;t know of anyone who has had the charges wiped out. You could be the first though so keep us all posted. Kind Regards, Edwin

I recently handed our car back under a Clause 99 Voluntary Termination. The car has been very well looked after, in perfect mechanical order and the interior was immaculate. I had the car cleaned up and any more serious damage repaired. The exterior was excellent considering it had 65k on the clock and in my view, in near showroom condition and certainly well within what could be described as fair wear and tear. I did take photographs of the car and all of the minor points. I was being ultra vigilant as I have read about issues on your website. There were a couple of tiny stone chips, a hardly noticeable minor indent less than L 5mm x H 5mm x D 1mm and a couple of surface scratches which were only in the clear lacquer (these could be polished out very easily). The finance company have subsequently come back to me with £130 worth of repair charges. They are threatening me with cancelling the VT and accusing me of defaulting on the finance agreement if I don't pay up immediately. My questions are, do I have any means of disputing their inspection outcome? Can I quote the BVRLA Fair Wear and Tear guide in any way? Are they obliged to say how this does not constitute fair wear and tear?

Posted by Steve T on

Hi Zoe, news to me - i'm not 100% sure. It'd be worth reading your contract and perhaps seeking a little free legal advice. Sorry i can't help further.

Hi Edwin, Interestingly the finance company are now saying that as we financed over £25,000 that the VT is not applicable? Is that correct? I thought the 25k limit had been lifted?

Posted by Zoe on

Hi Richard, inspectors look for cosmetic defects - so paintwork, interior condition, alloys etc. They also look at the service maintenance that the vehicle has had since it has been in your possession... Kind Regards, Edwin

Hi Edwin. I am 50% through my car finance and looking to hand my vehicle back in order to get a newer vehicle. I am aware that the finance company will send an 'Independent Inspector' out to look at the car. I look after my car's and it is in good condition but just wondered if you knew the kind of things they look at when coming to inspect the car?. Don't want to be stung if i can do some of the work myself. Thanks!

Posted by Richard on

Hi Paul, it may well be worth taking a little legal advice on how best to approach the situation. Have you spoken with your finance company to make a full and final settlement offer of say £200 which sometimes works? Other than that you'd have to speak with a manager within the organisation and give your side of the argument.

Hi, I returned my car recently and have now been sent a bill for scratches to the bumper and side. THe car is worth approx £3k and they are asking for £500 to fix scratches?!? I feel the car was in great condition given its age and the fact I was not the first owner. They have sent me pictures which show very little and I am now wondering where I stand with regards to their invoice? Thanks, Paul

Posted by Paul Savage on

Hi Steve, you may be within your rights to get an independent inspection on the vehicle but in all honesty that would involve further cost. I'd wait to see what your current finance company come back and say to you before taking any action. It would then be a matter between yourself and the finance company.

I recently instigated a VT under section 99 and made reparation to the minor damage on the car. Any remaining damage was minor and what I would say was reasonable wear and tear under the BVRLA standards. However, the finance company sent an untrained collection agent who was devolving any responsibility and just writing down any and all damage regardless of how minuscule it was. If the finance company subsequently try to charge me for these minor blemishes, what rights do I have? As far as I was concerned the car was in near showroom condition.

Posted by Steve T on

Hi James, this is really a matter between you and your current finance company. There should be some leniency from your finance company to help you out and it's not unheard of for a finance company to help get your car fixed. The issue you have is that the car isn't in running order so the finance company won't let you VT your agreement. Good luck. Edwin

Hi, I have paid more than 50% of my car loan. The car broke after only 5 months of having it (it needs a full rebuild at £5k). Can I VT the car in this condition or is there anyway that because the car developed the fault in a short space of time, the finance company can assist in having it fixed. The original garage folded at about the same time the car developed the faults.

Posted by James Watson on

Hi Julie, i've not come across your circumstance before if i'm honest so i don't really know what to say. It may be worth ringing a local solicitors and seeking some fee advice. Other than that you may have to fix the car before handing it back - why won't it run?

Hi, I'm in a bad situation. I took out a 4 year agreement with blackhorse on hire purchase and i have paid 50% but owe some arrears aswell which i am paying. I opted for a VT but because the car is a non runner they say i can't hand it back or do anything and ill have to pay until the end of the agreement. I was wondering how i can get out of this without paying for repairs on the car. Any help would be highly appreciated.

Posted by Julie on

Hi Hayley, unfortunately that wouldn't be possible. You are however best selling the car privately and settling the finance with the proceeds :-)

Hi, I bought a vauxhall in August 2011, and haven't yet reached my halfway point which is £5300 my payments are only up to around the £2600 mark, but between me and my fiancé we have decided to only drop down to one car and my vauxhall isn't really practical when owning 2 large dogs we are looking to pay off the big lump sum to take me to the halfway point and handing the car back, is this possible to do and it won't affect my credit rating will it? Thanks

Posted by Hayley on

Hi Keith, yes - some finance companies work in this way however, if the car is in good condition it'll make good money at auction as good quality used cars are in high demand. Have you spoken to your finance company to confirm this is the case? Kind Regards, Edwin

Hi, Can you please advise; If voluntarily terminating a car hire purchase agreement and the car presumably goes too auction but does not meet the figure still outstanding on the agreement, would I be liable to make up the shortfall with the Finance company ? I have paid 50% of the figure under the agreement, the car is in mint condition (term not used lightly) but has 5000 miles more than the Maximum contractual mileage.

Posted by Keith Alexander on

Hi Ash, as long as you're 50% of the way through your Black Horse agreement i have a feeling you can hand the car back. Is the All in One finance a personal loan agreement? If so, it won't be secured against the car and you can just pay this back at your current rate. If it is a personal loan you won't be able to VT that agreement as such but you should be able to get out of the Black Horse agreement. Seek advice from Black Horse first and make sure that the All In One finance agreement is a personal loan. Once this has been confirmed beware that Black Horse can charge you depending upon the condition of the car when you hand it back. Good luck. Kind Regards, Edwin

Hi Edwin, Thank you for some really useful information on this page. I had no idea about a consumer's right to VT an agreement but it's definitely an option considering 'my' car is in negative equity. I went for a car on HP from carcraft with an included warranty. At the time, Black Horse finance would not provide enough credit for the entire purchase price of the car. The salesman 'got around' this with another loan from All in One Finance who have ties with Carcraft! Anyway, the long and short of it is that I currently repay ~£145pcm to Black Horse and ~£50pcm to All in One Finance. Does this mean that they have me hamstrung over the option to VT unless I pay off one of the loans in full first? Many thanks, Ash

Posted by Ash on

Hi Zoe, if i were you i'd just hand the car back at the 50% point in February. That way you get out of the car and the problem at the same time and you can then go and get a cheaper vehicle to suit you and in your own name. Have a great evening and good luck. Kind Regards, Edwin

The car will also be well below the mileage allowance (I've done 3000 miles in 2 years) does that score me any brownie points with the finance company for VT?

Posted by Zoe on

Hi Edwin, All they have mentioned is the current outstanding (as far as I know) and its mid term on the agreement in February so I can hand the car back and do something a bit less pricey! I'm not entirely keen to keep the car as I only drive about ten miles a week but if I could negotiate out of it now I would happily do so and go for something cheaper.

Posted by Zoe on

Hi Zoe, this may well be correct as the finance agreement is in your husbands name. Finance companies don't like changing agreements half way through. What options have they given you or your husband?

Hi Alex, thank you for your question. All finance companies that i know of charge for excess mileage completed. However, if they have notes on file stating that this wouldn't occur then you should get off paying the full amount. If they don't and you can't confirm what was said i'd negotiate with them and thank your lucky stars you don't have to pay £4500. Sorry i couldn't be of more help. Just one last thing, don't cancel any payments until the deal has been settled as any missed payments could adversely effect your credit profile. KR, Edwin

Hi, My soon to be ex husband has my car finance in his name, we've agreed that I take on ownership of the finance and the car - he's telling me that the finance company won't discuss any info with me or transfer the agreement to my name. Is that correct?

Posted by Zoe on

Hi Edwin, I have made more than 50% payments on my car and intend to VT it. I spoke to the finance company and they mentioned excess milage. I queried this with them as soon as I got the original documentation and they said that excess milage didn't apply however they now say it does. They have file notes that confirm my understanding (no mileage adjustement) and are now reviewing the phone call tape. The excess would be about £4,500! The company are suggesting some sort of "deal" but am I within my rights to just return the car and walk away despite the fact that they made a mistake because I have acted on their advice? Thanks Alex

Posted by Alex on

Hi Pearl, if they haven't collected the car yet it may not be too late. Call your sons finance company asap and see if they can stop the process. I'm sure something could be sorted out. Keep me posted. Edwin

Hi, my son sent a letter to ask his finance company to take his car back as he's paid about 75%. He has received a letter to say yes they accept and have terminated his contract and will collect his car. But now he has changed his mind and wants to keep the car - is it too late? Regards, Pearl

Posted by Pearl on

Hi Stuart, no - you can voluntarily terminate your agreement if you are over 50% of the way through your finance agreement. The whells won't matter as the finance company wouldn't have known what wheels were on the car. However, do be aware that your finance company can charge you for general wear & tear issues relating to your cars condition and mechanical history. Kind Regards, Edwin

Hi Edwin, our car dealer called us to advise us that as we were halfway through the finance agreement and that we could VT our cars. We would only be looking to VT one at the moment, however we got rid of it's alloys and replaced them with steel wheels as the alloys were dented and letting our air. Do you think the car not having the original whhels would be a sticking point? Also, if we could do both, is there normally only a window of opportunity in which cars can be VT'd? Many thanks

Posted by Stuart on

Cheers Edwin Luckily I'm prepared for the £2k hit on the mileage. Should have really thought more about it 3 years ago but when you are faced with a spanking new Audi A5 with all the toys a bit of excess mileage doesn't enter the frame lol! Harsh lesson, read all the detail and think ahead my dad said!, damn he was right......again! Best Regards Paul

Posted by Paul on

Hi Paul, i'm surprised Audi haven't mentioned the excess mileage to be honest. You will be charged from my knowledge so get yourself prepared. It'd be worthwhile to call Audi earlier rather than getting a shock later on. Regarding the condition of the vehicle they may add on certain charges for any cosmetic repairs they have to make but i couldn't tell you what unfortunately. Kind Regards, Edwin

Hi, I have agreed with my finance company to return my vehicle having paid over 50% in accordance with the contract. My mileage is 25 k over the agreed 18k for 3 years (I walked into that one! flash AUDI) however my contract states the usual 'You have the right to end this agreement etc. Then it states 'if you have already paid the said amount and taken reasonable care of the goods you will not have to pay any more'. In conversation and email correspondence no where has there been any mention of the excess mileage charge? Where do I stand legally? Also the fair wear and tear policy states the vehicle should be in good condition which is contrary to my contract (reasonable?) Can send you a copy of my contract if you like? Cheers mate

Posted by Paul on

Hi Colin, in the vast majority of cases the cars go straight to auction to be sold so i'm surprised to see that it hasn't sold after 4 weeks. Have you asked them to see how they are disposing of the car? Regarding the charges the finance company come back to you for is dependent upon the vehicles condition and maintenance records but all lenders have different rules so i couldn't help you on that particular question. Has the lender explained that there could be damage charges and how they would be assessed?

Hi Edwin, I voluntarily terminated my car but after 4 weeks when i chased it up because it wasn't showing as "settled" on my credit account they told me it will only show as settled once the car is sold on. So i asked if it didn't sell for 6 months would it still not show as settled and they said thats correct. Seems a little unfair to me. Is this normal? Also is there a time limit when they have to come back to you once vt'd for unreasonable damage? Thanks

Posted by Colin on

Hi, I got a car on hp, it was £5800, I put £1000 down upfront and got £4800 on finance - I now owe £2900. Can I VT as this is half the value of the car or do I have to have paid half the amount on hp? Thanks

Posted by Jan on

Hi Ben, when you get to the 50% mark you should be able to VT as long as all payments are up to date. Beware of any potential charges though in regards to the condition of the vehicle etc.

My girlfriend is nearly half way through her agreement. She recently lost her job and missed two payments which I have paid up to date. Can I still VT the car (she is with Santander and has also had a payment holiday)

Posted by Ben Frankcombe on

Hi Kris, unfortunately you won't be able to hand the car back as you're not over half way through the agreement. The only option you have is to get a settlement figure from Santander and hope that you can achieve the same amount via a private sale to clear off the outstanding finance. Kind Regards, Edwin

HI, I have had a car on finance for 1 year now. My financial circumstances have changed & i can not keep paying for the car. The deal was for 5 years and I reckon the total amount i have left to pay is £8000. The deal was for £10,000 so i have paid them £2000. Is there anything i can do to give them the car back? The deal was with santander consumer finance. Any help please. Thanks in advance

Posted by Kris on

Hi Naz, you'll need to contact Moneyway and get a written settlement figure so that we know how much finance exactly is outstanding.

Thanks for the fast reply!! Will I need to call moneyway first to inform them of my intentions or will you guys contact them to discuss the changeover?

Posted by Naz on

Hi Naz, yes - this wouldn't be a problem. Please make an application on our site and we'll go from there. Edwin

Hi, I have Moneyway car finance on my BMW which was bought from cargiant. I had a 3 year plan and October 7th 2013 is my last dd day! I can no longer afford the payments along with all the costs of running the car due to personal circumstances and the payments left in total are around the same amount as the value of my car! Is there anyway I can part exchange on a more economical car now? I have made a few late payments but I am not in any arrears currently.

Posted by Naz on

Hi Edwin. Re; My question on the 11/07/12. I was able to pay up to the 50% mark and voluntary terminate with Suzuki Finance. They could not have been more helpful.

Posted by Clive Evans on

Hi Gemma, the outstanding amount will be cleared when you return the car and the contract will be void. Please be aware that they will charge you for any excessive wear & tear on the vehicle.

I have reached the 50% mark for payments on my finance agreement and have not missed or been late on any payments. If I contact the finance company to ask to return the vehicle what happens to the outstanding balance on the finance? Is it cleared or will I still owe this? Thanks

Posted by Gemma on

Hi Patrick, was the initial agreement purely a lease agreement or a lease purchase (which gives you the option to buy the car at the end of the agreement)? If it was purely a lease agreement then Black Horse are within their rights to reclaim the vehicle. It just seems strange that no other agreement was signed. In theory after the agreement had finished you should have handed the car back. It may be worth taking some free legal advice and reviewing your lease agreement in detail. Edwin

Dear Edwin, thank you for your response and as to your question no I never signed another agreement. I just carried on with my direct debit from the bank paying the exact amount of monthly payments.

Posted by Patrick on

Hi patrick, if you're not paying for the car then Black Horse do have the rights to repossess your car. However, i'm confused as you say the original agreement has ended! Did you sign a new agreement extending the term? If you could clarify that first and then come back to me i'll be able to help you further. Regards, Edwin

I took a lease out over five and a half years ago with black horse finance. The lease originally was for a term of 3 years wich I paid every payment on but then I kept the car and carried on paying the payments for another 18 months. I stopped the payments in FEBUARY this year because things became a little bit tough financially but I kept using the car. I have worked it out I have paid about £18000 in payments the car at the time new was about the same value to buy they now want to take the car back. Were do I stand because they let me carry on the contract over the original contract period? Can you help me with what my legal stance is?

Posted by Patrick on

Hi Jim, thanks for your question. You should be able to VT but the finance company may charge you to get the car in working order. The charges you owe will also need to be cleared up from past experience. Have you spoken to your finance company yet? Regards, Edwin

Hi, I want to VT my car. I have had it for 3 out of 4 years so well over 50% - i have a couple of hundred pounds in charges due to late payments on an had hoc basis. Firstly do i have to pay these extra charges or will they be added to the balance? Secondly today the car didn't start. I think it might be a problem with the alternator but cannot be sure? Will the finance company let me vt under these circumstance do you think? Thanks

Posted by Jim on

Hi Luke, that may well be correct as lease agreements are different to HP agreements. If Mini have confirmed this then that would be the case.

Hi Edwin, I currently have a MINI on finance (lease not HP). I am looking to terminate the contract at 50% but MINI have said that I have to have paid 50% of the agreement and not just be 50% through the term, is that correct?

Posted by Luke Snowden on

Hi Colin, i'd strongly advise to keep the direct debit instruction open until the car has been settled as if you miss a payment the finance company could mark your credit record 1 down which would effect your credit score. Any over payments made could then be resolved with the finance company and taken off any charges (if there are any charges) etc.

Hi Edwin, thanks for the reply but what about my first question regarding my direct debit? If my car is collected in the next week and the next payment is 2nd of Sept, am I entitled to cancel the direct debit as I believe I won't be liable to further monthly payments on the agreement. Thanks

Posted by Colin on

Hi Colin, the agreement should be settled pretty quickly (within 1 week) in most circumstances. The finance company may come back with charges though and the agreement won't be settled until those charges have been paid from what i know. This may vary with some finance companies though as if they sell the vehicle at auction they will have to remove their interest in the car. It would be a question for your finance company though to be honest to get the exact information :-)

Sorry Edwin, another couple of questions. How long do you find that it takes to settle the agreement once car is collected? I ask because I can't really do without a car but until the current agreement is settled I guess i'ts unlikely that I will be allowed credit on a new vehicle.

Posted by Colin on

Hi Keith, thank you for your question. As you're half way through and made all of your payments in time you are within your rights to voluntary terminate your agreement. You may be hit with some penalty charges however but as all finance companies are different i can't advise you of what they are or will be. Please speak directly with your finance company, explain the situation and ask for their advice. They may well want to collect the car sooner or if they can't collect it on a specific date they may request for the car to be delivered by you to one of their desired locations. Good luck with your move. Edwin

Hi Edwin, I want to VT my car as I am moving to the USA at the end of September. I am more than half way through my HP agreement and excluding high miles the car is in good condition.There is no penalty in my contract for the high mileage. My DD is set for the 24th of the month but I leave the UK on the 24th of the month. It is more complicated as I am on holiday form 4th to the 19th September when I need the car. Obviously I don't want to make a payment for a month when I wont have the car so can I state that the car can only be dropped off or collected on those 2 days? Also should I inform them of this by letter and request correspondence by email whilst I'm away? Any help or advice? When should I terminate my agreement? Is it reasonable to put in that I would be out of the country and that the only opportunity for them to collect the car is between 20th and 23rd Sept?

Posted by Keith on

Hi Colin, just because you haven't serviced your car doesn't mean that you can't proceed with the VT process. However, your finance company may well be able to charge you additional fees depending upon the condition of the vehicle. Please discuss this over the telephone with them. Regards, Edwin

I have had my car on finance for just over 2.5 years and i am going through the process of voluntary termination. I have never serviced the car - does this matter? My agreement says you need to hand in your logbook and service info. Thanks in advance

Posted by Colin on

Hi Jocelyn, i find it hard to believe that lenders are telling you that you are declined purely because you have voluntary terminated your previous agreement. As long as you followed all of your previous lenders terms and conditions it shouldn't effect your credit history whatsoever. Do you still owe them money at all? Have you looked at your credit report recently to see if there are any negative items on there?

Hi, we voluntary terminated our car recently and now we are finding it difficult to get finance with any company. They all say it's only because we VT'd. All our payments have been on time etc. Can you give us any advice please? We need a car asap on finance. Thanks

Posted by Jocelyn on

Hi Sue, the answer to your question is No. You wouldn't be liable for the amount of remaining finance however, depending upon the condition of the car the finance company could well hit you with a few charges. You need to speak to your finance company first and then take the action required. Kind Regards, Edwin

Hello, I've paid over half of the "HP" on my car and wish to surrender it, but am i liable for the amount outstanding on the hp loan?

Posted by Sue on

Hi Clive, i don't think this is possible but i could be wrong. You'd need to check your agreement to see if this is a possibility or speak to your finance company. If you can do so it'd be the first time i've heard of it happening before. Please come back and let us know. Kind Regards, Edwin

I have a car on hire purchase for 5 years. By the time I make my September payment I will have paid 50% barring £7. I want to "VT" the agreement to purchase a new vehicle and wondered if I offered to pay the agreement up to the sum of the 50% stated, i could terminate before September?

Posted by Clive Evans on

Thank you for the fast response! I've called them and they have just said they will send a pack out. They were not intrested in talking about much on the phone other than to reduce my payments. Again thanks for the advice and quick response.

Posted by Kris on

Hi Kris, unfortunately i wouldn't be able to say. The best option would be to speak to black horse regarding their VT process and find out how they make any charges against you for damage to the vehicle. Kind Regards, Edwin

Hi Edwin, I am with black horse finance on a second hand car, I have paid about £1000 beyond the 50% mark. The car is missing a couple of services and it has a nasty scratch on the door which was a victim of being in a car park about a week after purchase. Do you or anyone else have any idea of the charges that may be headed my way on the VT?

Posted by Kris on

Hi Lloyd, i wouldn't be sure on the specifics but i'd strongly advise that you keep your DD active so that you don't get marked down for missing any payments. The letter you receive should state all the information you require. You can always reclaim the direct debit payment if it is wrongfully taken too. Regards, Edwin

I have decided to VT my Fiat Qubo and have paid over the 50% required. My query is regarding my next DD payment on 11/7/12. If the letter is received by FGA prior to this date should I cancel DD? Should this be written in letter? Or do I have to wait for their agreement.

Posted by Lloyd on

Hi Paul, it really all depends upon your finance company. Some agreements let you terminate at any point after the 50% has passed and others don't. You'll have to read your agreement or call your finance company. Once you find out though it'd be great if you could share the finance company name and their stance for our other users. Sorry i couldn't be of more help. Regards, Edwin

Edwin, I noticed on another question your answer stated "missed the window of opportunity". Is this window something that is attached to all credit agreements, if so how large is this window in terms of months over and above the 50% term? Thanks Paul

Posted by Paul on

Hi Sian, in all honesty that isn't a bad deal. However, i'd go back to them with a full and final settlement offer of £500 and see what they say. You may save an extra £250 but then again you may not. But it's certainly worth a try. Kind Regards, Edwin

Thanks for replying so quickly. Yes, I spoke to the manager of the Recovery Team who listened to the recorded conversation that I had with this customer advisor and manager and he admitted that they did in fact say that there would be no mileage charge. However, he based it on an "administrive error" on behalf of the advisor. He did then say that regardless, that I signed a contract which agreed to the 6,000 miles per annum. But my argument is that I wouldn't have voluntary terminated if I hadn't been advised of the no mileage charge. They have however agreed to let me pay solely the difference between the cars worth at 18,000 miles to 36,000 which is £725.00. Regardless of this though I feel that I shouldn't have to pay. Do you think that the deal they are offering me is as good as I can get? Thank you. Sian.

Posted by Sian on

Hi Sian, thank you for your detailed question and analysis. Firstly, let me clear up that your credit rating will not be effected because you have gone to the financial ombudsman. Secondly, you're free to apply for finance anywhere else immediately as long as you have made your final agreed monthly payment to Banque PSA Finance. Now onto the detail of the charge for the excess mileage. In theory the finance company are within their rights to charge you for the extra mileage as you signed a contract, whether you checked it or not, agreeing to 6000 miles per year. The fact that you have done almost double certainly devalues the car. The more mileage a car has done the less it is worth. Whether you have a claim against the dealer is a grey area as he could argue that you told him 6000 miles per year was correct and it'll be his word against yours so i don't see this as an avenue to explore to be honest. I suppose it's a harsh lesson learnt to always double check you finance documentation before putting pen to paper. Also you would have gotten cheaper monthly payments due to the lower mileage so you haven't lost out completely. The one good thing you have going for you is the fact that you were told over the phone by an advisor at Banque PSA Finance that you wouldn't have any extra payments to make once you had terminated your agreement. Do you have this in writing (email or letter) or do you have the persons name that you spoke to as the call should have been recorded. This is your only hope to get away without paying for the extra mileage. Please let us know how you get on and good luck. regards, Edwin

Hi Edwin, I have just voluntary terminated my contract with Banque PSA Finance. The reason for doing so was because I was in negative equity with my car by a large amount due to excess mileage. However, the salesperson that sold me the car was told that I needed it on a high mileage contract due to my work. But he put the annual mileage at 6,000 on the documentation. So when i handed the car back to the finance company they expected the car to have 18,000 miles on the clock but my car actually has 36,000. The reason I went ahead with the "VT" was because I spoke to a customer advisor and manager and they said on this occasion there would be no supplement charge because of the misleading contract. However when the RMS collection agency rang me they stated that the finance company was stipulating a mileage charge. So now I feel like I am caught over a barrel. I have contacted trading standards and the financial ombudsman but I feel that I am obliagted to pay the supplement charge even though i was advised otherwise. Also, because i have contacted the finanacial ombudsman will it affect my credit rating? How soon can i apply for finance on another car because I will be car less! Please help! Thanks, Sian.

Posted by Sian on

Hi Chris, thank you for sharing your experience with everyone and apologies for the delay in responding. Which finance company read you this script? I've never heard of this before if i'm honest. It sounds like scaring tactics. As long as you make all the agreed final payments the finance company shouldn't leave any negative marks on your file. If you can let us know who the finance company is then we'll see if any of our visitors have had any similar experiences. Regards, Edwin

Hello A. South, unfortunately you won't be due any funds back if you have just terminated your agreement. If you do get any money back please come back and let us all know - you'll be the first :-)

Hi Edwin, i have been told about voluntary terminating my agreement and that i am well within my rights to do so. However, when i phoned my car finance company, they read a script that said "this WILL effect my credit score and a mark will go against my name and i could be refused finance in the future" - How is this legal? If i "VT" and it has a negative effect on me, that is NOT my right. I feel like i am forced to pay what is left if i don't want a bad credit score. Yet in my contract to sates that I can VT when i get to the 50% mark in my agreement. Should i get the financial ombudsman involved? Many thanks

Posted by Chris on

Hi Edwin, i'm about to VT my agreement and i spoke with finance company who have confirmed everything is ok to do so. Out of a 48 month contract i am 27 months in. After the VT has gone through is there any chance i will be owed anything? Or does it not work like that?

Posted by A South on

Hi Melanie, it may be wise to get some free local legal advice as that sounds like a fob off tactic but i could be wrong. Good luck. Edwin

Hi Edwin, I received a response from my finance company that I can not VT as my agreement is a fixed term loan agreement. Is there anything else I can do please?

Posted by Melanie on

Hi Melanie, by law they should allow you to VT the agreement however, if you're over the 50% mark you may well have missed the window of opportunity to voluntary terminate but all lenders have different policies. Edwin :-)

Hi Edwin, Thank you for the reply. I am about to approach them, just want to know wether they can refuse me to VT my agreement because of the statement in their T's&C's.

Posted by Melanie on

Hi Melanie, yes you can approach your finance company to voluntary terminate your agreement. Please come back and let us know how you get on. Thank you. Edwin

Hi Paul, just because your partner has voluntary terminated her agreement does not mean that she won't be able to get finance again. As long as she made all her payments on time you should be able to secure finance on another BMW :-)

My finance agreement stated that it is regulated by the 1974 Act and below in small print it is saying that you can not cancel under the 1974 Act. All my payments are up to date and I've paid more than 50%. Can I approach my finance company to voluntary terminate my agreement under the 1974 Act?

Posted by Melanie on

Hi, I'm not sure if you can advise me but here goes. My partner only has her last payment with BMW finance to make and is looking to buy a new vehicle on finance. Also my car that we have just VT'd was in her name. The car has gone back now. Would this stop her being approved for new finance? She only has £188 to pay to BMW and the other car was handed back last month?

Posted by Paul on

Hi Tom, you'll have to check your finance agreement to see if you can voluntary terminate when you're half way through your agreement. If you can and you're up to date with your monthly payments then they can't do anything or charge you an extra (as long as the car is in good condition). Regards, Edwin

Hi Derek, No - the finance company can't change the agreement without your written consent so don't worry about that. I'd get up to date with your payments and then inform them you want to VT. You shouldn't have any problems as long as you follow their instructions :-)

Hi, I recently bought a vehicle from Vauxhall on a 5 year interest free plan thinking I got a good deal at the time. If I needed to hand the car back because I could no longer afford the payments how would I go about it and is it possible? Also would I be likely to owe a great sum of money? Thanks for your help.

Posted by Tom on

Thanks Edwin, but would they action any kind of repossession or withdraw/change my agreement if they knew I was looking to VT. My paperwork just states that I can VT upon 50% of the value paid?

Posted by Derek on

Hi Derek, in all honesty you'll have to call your car finance company to find out the fine details as many companies are different. Kind Regards, Edwin

Hi, what if I am a month behind and the new months payment is now due too, but I make last months payment leaving this months payment to be paid. Can I pay last months payment and tell them I want to VT? Thanks

Posted by Derek on

Hi Zoe, thank you for your question. Yes - you can still voluntary terminate your agreement even though you purchased a second hand car. You need to be 50% of the way through the agreement though before Moneyway will allow you to do so. However, voluntary terminating your agreement may not be the best thing to do if you want to get another car as when you come to 50% of the way through your agreement you may well have equity in your car meaning you can use this as a deposit on your newer car. Most individuals only "VT" an agreement if they no longer want to own a car or they are in negative equity in a big way. I hope this helps :-)

Hello, I got a second hand car with moneyway finance and it's value is £7250 according to my insurance company. I am roughly 40% of the way through my credit agreement. Can I still VT on a second hand car or is it only on new car finance that i can voluntary terminate? I received an early settlement figure of £7,200 so there is very little equity in the car.

Posted by Zoe on

Hi Derek, i'd imagine you would still be able to VT your agreement and i think you'd need to put this in writing first. However, as i don't know Lombard's rules and regulations that well i'd advise you call them first to discuss your options and allow them to inform you of exactly what is required :-)

Hi, I am looking to VT my car with Lombard but I have missed payments during my term but I am now back up to date. Can I still VT or not? Also, do I tell them this on the phone or in writing first? Cheers

Posted by Derek on

Hi James, i'm glad you got the issue resolved and thank you for sharing your good news with the rest of our readers. It will certainly help :-)

Edwin, many thanks for your response. I have phoned my previous finance company and they have stated to me that it was an automatic letter produced by their system even though it was titled "You are in arrears!" They explained that I would not have to pay anything as I had voluntarily terminated my agreement. My concern is to anyone else out there who receives a similar letter and who are non the wiser by deciding to phone a company to pay them the money. My impression was that the finance company would happily take it from them!! Just to highlight to all of those individuals out there, that are thinking of a VT, you can do it with no comeback providing you have paid half of the HP agreement! Many thanks again Ed. Kind regards, James

Posted by James on

Hi Chris, just because you're in negative equity this will not effect your rights to voluntarily terminate your existing agreement. Just make sure you read your agreement in full and follow all the T&C's to the letter. It's always handy to get on the phone to your finance company to discuss the VT process just so you don't miss anything. Good luck and let us know how it goes :-)

Hello, I have a car currently which has around 4 months left until I am half way through my agreement. I am wanting to VT my agreement with the car finance company but the car is in negative equity. Will this affect wether or not I will be able to VT the agreement? Thank you.

Posted by Chris on

Hi James, thank you very much for sharing your experience with our audience and i'm sorry that you got that letter. Firstly do you have anything in writing from your old finance company stating that you owed them nothing when they collected the vehicle from you? Also have you spoken to a solicitor? It'd be well worth spending a little bit of money on some legal help rather than having to shell out £2000. Do you still have your old credit agreement? Kind Regards, Edwin

Hello, I recently bought a new vehicle as I was losing so much money on my previous vehicle. I was delighted to hear that I could "VT" from the finance agreement. As I had paid over half of it, I phoned the finance company and put all of this information in writing to them. They came and collected the vehicle and it was in good order apart from a few scratches. I received a letter yesterday, over a month later, stating that I now owe them over £2000. From what I can translate from the the letter it's to cover the loss the vehicle made during its sale! I am confused and frustrated as I was assured I wouldn't owe them anything. I have now seen that some companies might make you liable if you withdraw from a contract instead of terminating? Surely to a normal person this terminology would represent the same thing? Thank you for your help. Regards, James

Posted by James on

Hi Mark, unfortunately the only advice i can give you is to call your current lender and explain the damage you have on your car and what their returns policy is? Is anything mentioned in your agreement regarding wear & tear? Some lenders are a great deal stricter than other so i don't want to give the wrong information out :-)

Hi Edwin, On average how picky are the finance companies regarding damage when i come to VT my agreement? I've a few small dents and some scuffs on the alloys but nothing major. A friend at a garage said that they woudn't be bothered but I don't want a bill for 4 new alloys! I know each will be different but is there any general patterns?

Posted by Mark on

Hi Natalie, different lenders will have different terms and conditions. I think it best if you call and speak to your current finance company as i don't want to give out any incorrect information :-)

Thank you for your reply. I am a little confused now from a reply you have written to someone else. Our contract says it has to be 50% of the total amount which is 10200 not 50% of the term. Are we reading that incorrectly? Thank you for your advice x

Posted by Natalie on

Hi Paul, in all honesty i'd get the dealer to speak to Black Horse first as see what the best route to take is. You may well have to VT first before getting a new car as if you applied for a new car at the same time they'd just give you a settlement figure on your current car and i take it the car is worth less than what you currently owe on the vehicle? If you don't want the dealer to call Black Horse on your behalf i'd ring yourself and quiz them about your options. Regards, Edwin

Edwin, thanks for your quick reply. The finance i have is with Black Horse who i have dealt with several times and each loan has been settled satisfactory and to the end of the term. I am self employed so a line of credit is important to me and i currently enjoy a credit score of 999. My worry is that i might need to VT my current loan and refinance for another vehicle for a larger amount. I know the dealer uses Black Horse, so i am concerned about doing a VT for fear of being refused further credit, or would Black Horse look kindly knowing they are loaning me a higher figure?

Posted by Paul Healey on

Thanks for the feedback Nigel - greatly appreciated and i'm sure other readers of this post will find that information useful :-)

Hi, just to follow up on my previous question with regards VT. I have now gone through with it with no problems. I spoke to & wrote to the finance company who have a department set up for terminations. I then paid upto the 50% stage & took my car to an auction house that they told me to. They checked the car over & said all was ok. That's it gone. Although the gap insurance still has to be paid separate until the term end, about £12 p/m but can live with that to be rid of a duff car. Now bought a much better car on a much better deal. Thanks.

Posted by Nigel on

Hi Natalie, yes - once you've paid the remaining 4 payments and you're 50% of the way through your agreement you are within your rights to hand the car back to the current finance company (please just check all the T&C's and communicate with the lender as to not cause any problems). With regards to the slight damage you'd need to speak with them as to what they would want you to do with the car. They might just take the car back off you in it's current condition so i wouldn't go out of your way to repair the vehicle just yet. Regards, Edwin

I have been advised today to voluntary terminate my car as the value has reduced so much that I will not be able to trade it in. It is now worth £6500 but I still have £11500 to pay. I have 4 months to pay until the 50% mark. The car has been curbed on two wheels and the wing mirror is damaged. Other than that it is immaculate and only 18 months old. Would I be billed to pay for this damage? Should I have it repaired prior to going through with voluntary termination? I cannot see anything on the agreement about it. Please advise. I am looking to buy a different car on finance.

Posted by Natalie on

Hi Paul, if you VT your agreement with your current finance company it may be true that they wouldn't offer you a loan in the future however, you'd have to check with them as each lender will have their own criteria. As long as you follow all the instructions the lender gives you then they can't legally downgrade your credit profile. Just make sure you don't cancel your direct debit until the lender informs you that you can.

Hi Chris, you can VT your agreement as long as you're over 50% of the way through your agreement and you have made all your monthly payments on time. So (a) is the answer :-)

Is it true that if you do VT your loan they won't give you another loan in the future and try and down grade your credit score.

Posted by Paul Healey on

Hi, Can you explain a little more on the VT criteria i.e. a) is it 50% of the term time b) 50% of purchase price c) 50% of total payable including interest Thanks, Chris

Posted by Chris on

Hi Chris, as long as you've made all of your payments on time in relation to the hire purchase agreement you are correct in saying that you can hand the vehicle back to the finance company and this won't have a negative effect on that particular credit account. Please speak to your finance company first and obtain all of the terms and conditions. As for obtaining further car finance it will all depend upon your credit history as a whole. We can help people who are in debt management plans but the rates of finance are higher than those seen on the high street obviously. A guarantor would strengthen your application and if you have a deposit that always helps. Regards, Edwin

Hi, i currently have a hp car agreement but i'm looking at terminating half way through in May 2013, which is in my rights to do so.... Will this affect me getting finance for another car after? I pay all my bills on time but in the past due to bad debt problems I had to go into a debt management plan which has made a mark on my credit file for six years even though that debt will be paid off in three years. With all this what would my chances of obtaining further finance be? Would I need a guarantor? Would that help me? I have a good income now of £2000 a month but with a poor past with debt. Please help x

Posted by Christopher on

Hi Nigel, in all honesty i think you'll have to continue paying until you're 50% of the way through the agreement. I could be wrong however, so i'd strongly advise that you call the finance company. Kind Regards, Edwin

Hi, I have had a terrible fiat punto evo for 2 years now but still have 3 years to pay. I have the money to pay the 6 months difference to take it upto the 50% stage. Will FGA allow me to do this then VT? I was thinking of phoning them & paying the lump sum off to take me upto the termination amount, then leaving it a day & phoning back to ask them to VT. they couldn't say no could they? Would they com & collect or would I have to take the car somewhere? Thanks for your help. Nigel

Posted by Nigel on

Hi Jo, once you have the finance companies agreement that you can VT your agreement then the last thing you'd be expected to pay is your last agreed payment with them. Then all you need to do is hand the car back. Don't stop your direct debit though until your final payment has been made. Each finance company will have their own criteria so please check with them to see if there are any extra charges and also check your finance agreement. Kind Regards, Edwin

Once you inform the finance company that you wish to vt what more would I be expected to pay other than maybe one last payment? Will I be liable for any further costs that they can enforce against me or is it really as straightforward as handing the car back?

Posted by Jo Mitchell on

Hi Lisa, if you've only had your finance agreement for 12 months it's highly unlikely that you'll be able to hand the car back now. I'd advise selling the vehicle privately but before doing so please speak to your finance company and see what they suggest. You never know - they may be able to help out. Kind Regards, Edwin

Hi Jo/Gillian, apologies for the late replies. My experience tells me that you need to be at the half way mark before you can Voluntary Terminate and hire purchase agreement however, your lender may have different rules and regulations so i'd advise you to pick up the phone and see where you stand. Sorry i can't be of any more help. Kind Regards, Edwin

I'm not quite at 50% of my loan term so am I able to vt now or do I have to wait?

Posted by Jo Mitchell on

Hi, I have had my car for 1 year only, never missed a payment. However I am leaving the UK and moving abroad. Can I still apply for VT as I'm not reached the 50% mark yet? Thank you

Posted by Lisa on

I have 2 cars and i want to VT on one of them. I have not yet paid 50%. I am roughly £550 short of this just now. Will i be able to pay this amount and hand the car back or do i need to wait until I am half way through the agreement?

Posted by Gillian Patrick on

Hi Richard, a great question - thank you. In a nutshell you can still "VT" or voluntary terminate your agreement without this having an effect on your credit rating. I'd advise to get this in writing first though from your current loan provider before carrying out the process. Also make sure you get a last payment date and pay it on time to prevent any missed payments being placed on your file. You are well within your rights to voluntary terminate as long as you have kept to all the lenders terms and conditions, mainly having made every single payment on time. Thank you

I am looking at a volentary termination on my car loan as over 50% of the loan has now been paid and I meet all the criteria. My concern is that a Volentary termination note will be put on my credit file and I do not know what impact that will have on my credit rating or ability to borrow for a mortgage? Can you advise?

Posted by Richard Cornwell on

Hi Kirstie, apologies for the delay in responding. As long as you have made all your payments on time you are well within your rights to VT "voluntary terminate" your agreement. However, if you have done excess mileage they can charge you for the extra mileage completed. Regards, Edwin

Hello. I have paid more than 50% and want to exercise my VT rights (voluntary termination) as I am out of work. Per my original agreement at this point the car should have 36000 miles on it. It is in very good condition but has 62000 miles on it. Can the finance company go after me for excess mileage charge?Many thanks

Posted by Kirstie Gould on

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