Personal Contract Hire and getting out of it early!!!

[mj2000uk]

Hi all, someone out there must be able to help me on this one.

I have a Toyota Avensis which I have on a personal contract hire 3 year agreement with Toyota Financial Services. I have had the car 9 months and just been made redundant. I have no problems finding a new job but finding it difficult to take the car with me.

After speaking with Toyota, they informed me that to get out of my contract would cost me �6800.00!!!

Does anyone have any tips on ways of getting out of this without paying, sneaky things like creating a situation where Toyota are to blaim and they have no issues on the agreement being terminated.

Think people, and thanks in advance!!!

[Loosehead]

The only way is to convince them that you cannot pay. Tell them you are now unemployed. Make them beleive they will get nothing. Get them to take the car back as full an final settlement. They will whine but in the end they will prefer that to having to reposess it later. Draw up a letter referring to the car and get them to sign saying they take possession. The key phrase is "in full and final settlement" make sure the car is mentioned by reg number take copies of all documents.

When I hear questions like this I wonder how they sell new cars to private punters. They are soooo expensive and you lose half your money within 1 year in most cases. In fact I'm going to post.............

[mj2000uk]

Thanks Loosehead, is that really the only way to do this!!! Its a case of just standing you ground then it seems.

I really could not believe the settlement when they told me, I mean they get nearly 7K from me and resell the car for another 12K so its a huge moneyu spinner for them!!!

What advice is there if I am in the position where I have to provide a car for work use in the future? When I got this one I had no deposit so PCH was the only real option.

[Loosehead]

I understand entirely. It's not a question of standing your ground really, it's more a question of making them realise what their best option is. You have to convince them that they can have something or if they mess about they'll get nothing. Do not though lose sight of the fact that they are in the right and they will be trying to enforce a contract. I do realise that in this situation that the costs or punative. With the corrrect approach though you should be able to get out effeciently. Do not bury your head in the sand though it will not go away. Remember everything is negotiable. Good luck!

[Loosehead]

Sorry mj I just reread your response.

If you need a car, for work and you have no money then clearly credit is necessary. However if you can get a contract lease then you can get a bank loan. You do not need a brand new car. Borrow 5K and you'll get something more than adequate at auction. I'm willing to bet you've paid the best part of that in 9 months already.

As an example my car cost �45k new I paid 5300. Ok it ain't new but who's taken the hit? I've owned it for a year and without boring you with the detail it's been fine. What I'm saying it regardless of the question the answer is very rarely new car! Sorry rant over!

[DebtDr]

Hi MJ,

Check your agreement. Is it a HP agreement? If you make 50% of your payments on a HP agreement then you can hand the car back without penalty.

If you can afford it then make the payments as this will probably be cheaper than the settlement figure.

If you miss payments then ready yourself for CCJ's, charges, costs, baillif visit etc. Don't just rely on trying to convince the finance company of their best option.

Hope this helps,

Ed

Debt Dr

[mj2000uk]

Hi Ed (Debt Dr)

Thanks for the answer, I am really scratching my head on this one!!!

The finance agreement states the rental to be a "Contract Hire Drive Plan Scheme".

The contract is set out and under the "Hire Period & Finance Details" section it lists that 36 monthly payments are required at �471.42 and at the end of the agreement, the car is handed back and I dont pay anyhting further unless I have exceeded 90000 miles in the damn thing!!!

Does that give you any more clues, I dont see the term HP on there anywhere.

Thanks!!!

[themas]

A Hire Purchase agreement is one where the car becomes yours when you have made all the contracted payments. Yours looks like a contract lease. But are you sure the car just goes back at the end of the three years? If it does you have paid nearly �17K and have nothing to show for it at the end!

Whatever, I think you will have difficulty - as DebtDr says you will be sued if you don't pay and your credit record could then be shot to pieces. You can try to negotiate but may find it very difficult to get anywhere.

[acwilderwick]

Ed (Debt Dr)

I am also thinking of exiting early form my Hire Purchase agreement, i am have paid 2 years out of 3 so have already paid 50% of the final figure. If i hand the car back as you mentioned will they still penalise me on excess mileage? i have done approx �3k of excess mileage so your help would be greatly appreciated!

Thanks

Andy