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Thread: Voluntary Termination: Letter Templates

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    Default Voluntary Termination: Letter Templates

    Voluntary termination letter to lender
    You can use this template to give notice to terminate our agreement. Be sure to amend the template to suit your needs.

    Dear Sir / Madam,

    TERMINATION OF AGREEMENT PURSUANT TO S.99
    OF THE CONSUMER CREDIT ACT 1974

    Agreement number:
    Registration:

    I am writing to notify you that I wish to invoke my statutory right under section 99 of the Consumer Credit Act 1974 and hereby give you notice that the agreement is terminated effective immediately from the date of this letter. Please confirm by return acknowledgement of this letter and to make arrangements for collection of the vehicle.

    The condition of the car is noted as being in a reasonable condition for its age and photographic evidence has been taken in the event of any future dispute as to the condition of the vehicle.

    You will be aware that the Consumer Credit Act limits my liability to half of the total amount payable under the agreement but excludes any sum payable as a penalty, compensation or damages for a breach of the terms of the agreement. Such terms imposed are inconsistent with my rights under the Act and are therefore deemed void and unenforceable.

    The vehicle is now available for collection and I would be grateful if you could contact me on [NUMBER] to arrange a suitable time within the next 14 days.

    Yours faithfully,

    [NAME]

    ---------------------------------------------------------------------------------------------

    Response to lender disputing excess mileage charges #1
    This is a standard response template to a lender claiming excess mileage charges. There is certain wording in square brackets which you may wish to include or exclude as part of your letter to the lender.

    Dear Sir/Madam,

    Re: Voluntary Termination

    Agreement Number:
    Vehicle Registration:

    I am writing further to your letter dated [DATE].

    Please note that liability in relation to the alleged outstanding balance for excess mileage is denied.

    You have suggested in your letter that I am liable to pay excess mileage under the terms of the agreement, however this is not correct. Section 100(1) confirms that liability is restricted to one half of the total price payable. The CCA defines ‘total price’ as “total sum payable by the debtor under a hire-purchase agreement or a conditional sale agreement, including any sum payable on the exercise of an option to purchase, but excluding any sum payable as a penalty or as compensation or damages for a breach of the agreement” (emphasis added).

    As you have already alluded to, the excess mileage is a contractual term of the agreement and therefore cannot be included as an amount which is owed. This position is further clarified under section 173 of the Act in that any contractual term which is inconsistent with any rights under the CCA and imposes additional liability, whether direct or indirect, shall be void and unenforceable.

    [I note that your letter refers to s.100 of the Consumer Credit Act insofar as the vehicle is not in a reasonable condition as a result of the excess mileage. Despite this claim, you have not provided any evidence outlining specifically the damage caused to the vehicle due to the excess mileage. I am of the opinion that the vehicle was maintained in a reasonable condition throughout the period of the agreement. Therefore, such damage charges you are claiming would amount to fair wear and tear and the vehicle does not need to be returned to you in any better condition other than a reasonable one.]

    Nonetheless, the excess mileage clause is based on the principle of ascertaining an estimated value of the car, taking into account its age and anticipated mileage at the end of the hire period. The hirer is then offered the option to purchase the vehicle at the suggested price. Mileage which exceeds the stipulated amount under the terms does not however, mean that the vehicle is not in a reasonable condition.

    In any event, such sums you are alleging to be owed may only be recovered by a court order only and should you wish to pursue this matter in court, your application will be strongly defended.

    Please confirm by return that this matter is now closed.
    Yours faithfully,

    [NAME]

    ---------------------------------------------------------------------------------------------

    Response to lender disputing excess mileage charges #2
    This template is an example response to certain lenders e.g. BMW who suggest that s.99(2) allows them to recover the excess mileage charges since they 'accrued' immediately before termination of the agreement. There is some wording in square brackets which is optional depending on your circumstances and you may wish to include or exclude from your letter.

    Dear Sir or Madam,

    Voluntary termination of the Hire Purchase Agreement dated [DATE]

    I am writing further to your letter of [DATE] in connection with the above matter. Your comments are noted and I have set out below the following response.

    In your letter, you referred to section 99(2) of the Consumer Credit Act 1974 as the reason why you believe that the excess mileage charges are recoverable following termination of the agreement. In particular, you stated that because the excess mileage charges accrued immediately prior to the termination.

    Whilst I agree with your interpretation of section 99(2), I believe that you are misguided in your understanding of how this section applies when a debtor terminates the agreement voluntarily. This is because sections 99 and the 100 must be read together in order to fully understand what (if any) liabilities the creditor can recover. For the avoidance of doubt, I have set out below section 100(1) which stipulates the debtor’s liability when the agreement is terminated under section 99:

    Where a regulated hire-purchase or regulated conditional sale agreement is terminated under section 99 the debtor shall be liable, unless the agreement provides for a smaller payment, or does not provide for any payment, to pay to the creditor the amount (if any) by which one-half of the total price exceeds the aggregate of the sums paid and the sums due in respect of the total price immediately before the termination.

    As you can see, the provision clearly states that where a debtor terminates the agreement in accordance with section 99 (that is by giving notice in writing to the creditor), then the debtor’s liability shall be limited to one half of the total price payable including any sums owed in connection with the total price that became due immediately before termination.

    Although I have already referred to the definition of ‘total price’ in previous correspondence, I would like to reiterate that the definition of ‘total price’ means any sums relating to the total price payable including the option to exercise price but specifically excludes:

    (a) penalty charges;
    (b) damages for breaches of the agreement; or
    (c) compensation.

    I am sure you will agree that, any ordinary reasonable person interpreting such a provision would have no hesitation in coming to the conclusion that exceeding the agreed mileage under clause [clause no.] would be a breach of the agreement and thus fall into category (b) above. Indeed, it is also reasonable to suggest that it may also fall into category (c). Put simply, your suggestion that the excess mileage charges can be recovered under section 99(2) is wrong. Admittedly, any overdue instalments may be recovered (as the instalments form part of the total price payable) but this does not extend to excess mileage charges for the reasons I have set out above.

    In the circumstances, I believe that I have a very strong case against you should the matter end up in court and I would therefore invite you to close down this matter. If, however, you do not agree with the above interpretation, I ask that you provide detailed reasons as to why you still maintain that the excess charges are recoverable.

    I look forward to hearing from you.

    Yours faithfully,

    [NAME]

    ---------------------------------------------------------------------------------------------

    Response to lender disputing condition of the vehicle

    This is an example response to the lender dispute the condition of the vehicle.

    Dear Sir/Madam,

    Re: Voluntary Termination

    Agreement Number:
    Vehicle Registration:

    I am writing to you with reference to the above matter and your letter dated [DATE]. Please note that liability in relation to the alleged outstanding balance for excessive damage to the vehicle is denied.

    The vehicle was maintained in a reasonable condition throughout the period of the agreement and therefore such damage charges you are claiming would amount to fair wear and tear; the vehicle does not need to be returned to you in any better condition other than a reasonable one. Photographic evidence was taken prior to the vehicle being transferred to you which clearly shows that the vehicle was in a reasonable condition. The onus is on you to prove that the alleged damage caused was more than reasonable fair wear and tear.

    Notwithstanding the above, I have paid circa [XX%] of the total amount payable and any alleged damage to the vehicle would be covered by these additional payments.

    [USE THE EITHER THE PARAGRAPH ABOVE OR BELOW]

    Notwithstanding the above, I am prepared to pay a reasonable sum of [£XXX.XX] relating to the [DESCRIBE WHAT COSTS ARE FOR].

    In any event, such sums you are alleging to be owed may only be recovered by a court order only and should you wish to pursue this matter in court, your application will be strongly defended.

    Please confirm by return that you agree to the payment above / this matter is now closed.

    Yours faithfully,


    [NAME]

    ---------------------------------------------------------------------------------------------

    Response to lender disputing collection charges
    A letter denying that collection charges are recoverable and sets out the reasons why.

    Dear Sir/Madam,

    Re: Voluntary Termination

    Agreement Number:
    Vehicle Registration:

    I am writing further to your letter dated [DATE].

    I am under no obligation to pay any fees for the collection of the vehicle. The Consumer Credit Act 1974 explicitly states that, my liability under the agreement is limited to half the total amount payable and any terms under the agreement which imposes additional liability directly or indirectly is strictly prohibited by the Act.

    May I remind you that I wrote to you on [DATE] confirming termination of the vehicle, allowing 14 days for you to collect the vehicle which this date [has now passed / will shortly be on upon us]. In the spirit of resolving this matter, I am prepared to allow a further [7/14] days to enable you to arrange collection of the vehicle. If the vehicle is not collected by [DATE], I will cancel the remaining tax and insurance and notify the DVLA that you are the registered keeper. Please note that the vehicle is currently parked on a public highway and any subsequent liability shall rest with you, since you have had more than a reasonable amount of time to arrange collection.

    I would therefore urge you to contact me to arrange a date to collect the vehicle at the earliest opportunity to avoid any issues with the vehicle. Alternatively, I am happy to deliver the vehicle to a specific location provided that you confirm in writing to agree to pay all reasonable costs and expenses in doing so.

    Yours faithfully,

    [NAME]

    ---------------------------------------------------------------------------------------------

    Letter to the lender notifying them of your intention to sell the goods
    This letter is self-explanatory and can be used where the lender has failed to respond to you or acknowledge your VT letter or other correspondence asking them to collect the car. The legislation referenced in the letter allows you to sell the goods without being held liable provided that you attempt to contact the owner of the goods and require them to collect it within a reasonable time - this letter can't be used if monies are owed to you prior to the letter being sent.
    Lenders won't like the letter but there has been some success in sending it, as suddenly, lenders contact you pretty quickly following receipt. It may also be wise to send the letter by post and email so that there can be no excuse that it is not received.

    [YOUR NAME]
    [ADDRESS 1]
    [ADDRESS 2]
    [ADDRESS 3]
    [POSTCODE]

    [LENDER’S NAME]
    [ADDRESS 1]
    [ADDRESS 2]
    [ADDRESS 3]
    [POSTCODE]

    [SENT BY POST AND EMAIL TO [EMAIL ADDRESS]]

    [INSERT DATE]


    Dear Sir or Madam,

    NOTICE OF INTENTION TO SELL GOODS UNDER THE TORTS (INTERFERENCE WITH GOODS) ACT 1977

    Agreement number: [INSERT REFERENCE]
    Vehicle Registration: [REGISTRATION NUMBER]

    I am writing to you in relation to the above matter. Following my notice of termination of the [hire-purchase agreement] and despite repeated requests to arrange collection of the above-named vehicle, I have received no response or acknowledgement.

    The purpose of this letter is to put you on notice that in accordance with section 12 of the Torts (Interference with Goods) Act 1977, unless you collect the vehicle by [14 DAYS FROM DATE OF LETTER], I will consider the vehicle as abandoned to which arrangements will be made for it to be sold at the nearest auction. I am lawfully entitled to deduct any associated costs in the sale of the vehicle including but not limited to, storage costs, auction fees, insurance and tax coverage. Furthermore, I cannot be held liable for any losses suffered as a result of the vehicle’s sale. Once the vehicle has been sold, I will contact you further to arrange for the remaining proceeds to be transferred to a bank account of your choosing.

    [Notwithstanding the above, your vehicle is currently parked on my driveway and is causing an obstruction for other vehicles, particularly as I have now purchased a newer vehicle. The vehicle is no longer authorised to remain on my property and continued refusal to remove it will constitute a trespass to land. Accordingly, a reasonable charge of £10.00 per day shall be levied (beginning on the day following the date of this letter) until the vehicle is removed.]

    The vehicle is available for collection from my address at the head of this letter and I would suggest that you contact me on [NUMBER] to arrange a suitable time.

    I look forward to hearing from you by [DATE].

    Sincerely,

    [YOUR NAME]
    Last edited by R0b; 24th August 2017 at 08:24:AM.
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