Voluntary Termination on Car HP Finance

[johnjones]

Hi All,

I'm new here and hoping for a bit of advice please!

I have a HP agreement with a company called Welcome Finance

I agreed finance on a car over 4yrs and have had the car 3yrs now having 4 payment breaks along the way (as agreed with managers of Welcome).

I recently wrote requesting to voluntary terminate the agreement as the car is no longer suitable for my growing family

I was told by their head office that I would still be liable for the 4 missed payments even though I have paid well over 1/2 the agreement and the figure quoted on my finance agreement.

They also advised me that I would be liable for the remaining balance on the GAP and Breakdown cover that is quoted on the finance agreement.

Does anyone know if I have to pay the 4 missed payments before I can hand the car back and also if I am legally required to pay the remaining GAP and breakdown cover as I will no longer have the car!

Welcome say that I have to pay this as they orignially paid out for GAP & Breakdown cover and refinanced it to myself!!

I can't wait to get out of dealing with Welcome and will never deal with a company like it again, best save up for a car!

Any advice would be greatly appreciated

Thanks.

[erimus1]

Hi John. before I continue - If you need another car on finance, you may well be able to negotiate with this finance company if you agree to re-finance with them.

If you're not keen on this, i'm afraid that I would not be able to advise specifically as I do not have sight of the contract. But all is not lost. Do bare in mind that many financial institutions (even larger ones) take a chance and include terms (covenants) that are actually against the law - in other word, just because is says one thing does not mean that it is correct. Look at the contract and correlate with the 1977 Unfair Contract Terms Act, and Terms in Consumer Contracts Regulations, and the Consumer Credit Act - this last one may well give you specific outs to the credit agreement.

Good luck and sorry I couldn't be of any more assistance.
Steve

[gammaray]

You should check out your agreement very carefully. You'll probably discover all kinds of small print that refers to early settlement and the repayment of both interest and any sweeteners the comapny offered as an inducement to sign in the first place.

[spaced]

GAP is your insurance cover in the event of you car being written off. This will aid you in pating the ourstanding finance. As an insurance you will HAVE to pay the GAP insurance until the contract, you signed andf agreed, has terminated - whether you have the car or not.

[J99]

If all else fails go to the financial Ombudsman Service all financial bodies report to them. It costs the company �360 to take the case on so they are more likely to settle than pay the fee and whatever the ombudsman decides they should offer you.

It is likely the whole will cost the company less to cancel the agreement than go thru all that paperwork!

[LoanArranger]

Beware Welcome - however, they will do deals that others won't - so the rates are high, the penalties alos.

Did they disclose commissions they were earning on ploicies arranged? No? I thought not, very naughty, even 3 or 4 years ago.

You've paid half so that can't repossess without court order - they will have punative, and I mean punative penalties for late or missed payments and the payment holidays you took will have been added to the loan and extra interest charges, compound growth at penalty rates applied - horrendous!

Don't miss any payments, don't just hand the car back - they'll sell it for �50 quid and chase you for the whoole amount they dare invoice - sorry but it is fact of life - and they'll also be adding negatives to your credit file and when any lender sees default with Welcome even i-group (G E Capital) run a mile!

Write to them - don't phone, write! Proof of posting is free but is essential. Tell them about the unfair terms act, sale of goods act and ask them if the are applying 'the rule of 78' which is being outlkawed as soon as possible now - most firms will avoid publicity on this nasty peice of consumer credit act 1978 but only will all three phase Welcome and yes, the ombudsman ought to focus thier minds more cooperatively.