Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

[R0b]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

There is no legal requirement or obligation for you to sign anything once you have invoked your right to terminate, it only states that it need be in a reasonable condition, not sign or agree to any additional paperwork. There may be 2 sections on the condition report, an initial inspection and an inspection prior to it being sold at auction and this is where you might get stung. Although I never signed my inspection report there was paragraph at the bottom acknowledging that I agree to any costs of damages highlighted on the report including the inspection prior to auction. Now I don't know whether yours would be the same but why would you want to put yourself in a position and sign a document which has the potential to cause you further liability?

Although you cold argue just because you've signed something doesn't mean you would have to pay it unless it went to court but a signature by yourself would be quite persuasive in a court.

As Ostell has said, take plenty of photos in case they come back at you but I would strongly go against signing the report. Of course I can't stop you but if it comes back to bite you then you will only have yourself to blame!

Lenders are always coming up with new ways to try and reclaim monies they may have lost because of the right to terminate at the halfway point and want to recoup what they have lost or gain some profit.

[ieuuu]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

There is no legal requirement or obligation for you to sign anything once you have invoked your right to terminate, it only states that it need be in a reasonable condition, not sign or agree to any additional paperwork. There may be 2 sections on the condition report, an initial inspection and an inspection prior to it being sold at auction and this is where you might get stung. Although I never signed my inspection report there was paragraph at the bottom acknowledging that I agree to any costs of damages highlighted on the report including the inspection prior to auction. Now I don't know whether yours would be the same but why would you want to put yourself in a position and sign a document which has the potential to cause you further liability?

Although you cold argue just because you've signed something doesn't mean you would have to pay it unless it went to court but a signature by yourself would be quite persuasive in a court.

As Ostell has said, take plenty of photos in case they come back at you but I would strongly go against signing the report. Of course I can't stop you but if it comes back to bite you then you will only have yourself to blame!

Lenders are always coming up with new ways to try and reclaim monies they may have lost because of the right to terminate at the halfway point and want to recoup what they have lost or gain some profit.

Thank you very much for the advise. Don't think I will be signing any documents! I will let you know how things progress... Hoping it will be straight forward

[James1982]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Hello, following my post a few days ago, would somebody be kind enough to have a quick read through the below letter I am intending to send to Honda. I have used the template from this forum. Is there anything that I should be excluding / anything else that I need to include?



Dear Sir/Madam

VOLUNTARY TERMINATION OF AGREEMENT

Agreement No: xxxxxxx (Honda Civic xxxxxxx)

I am writing to notify you that I am exercising my right to terminate the above Agreement under Section 99 of the Consumer Credit Act 1974. You will understand that the aforementioned section permits the debtor to terminate the agreement at any time before the last payment is due. There is no restriction regarding exercising this statutory right, particularly none in respect of any perceived arrears or monies due on termination.

I understand that I shall be liable to you for the amount calculated under the formula in Sections 99 and 100 of the Consumer Credit Act 1974. Please forward notice of any sums lawfully due for consideration and payment.

Relating to the above, having exceeded the 50 per cent repayment threshold with no outstanding arrears there is nothing further for me to pay under this agreement (the direct debit payment of £xxx taken on xxx will be the last).

The above agreement will be terminated 14 days from the date of this notice, that is 21/01/2016.

You will be aware that statute prevents you from levying a charge for the recovery of this vehicle; guidelines also state that if you require me to deliver this vehicle it must be no more than a short (reasonable distance) from my registered address.

Regarding the above point, I received the pack in the post that you wish me to sign to proceed with the VT. Section A of the pack asks me to either return the vehicle to an auction house in Birmingham or have the vehicle collected at a charge of £108. As mentioned above in bold, neither of these are enforceable under the Consumer Credit Act 1974. Please offer either an alternative local auction house to my home address where I can return the vehicle or collect free of charge. Alternatively I am willing to return to a Honda dealer within 40 miles of my home address which I consider a reasonable distance to travel.

If by 21/01/2016 there has been no progress with this I will have no option but to cancel the tax and insurance and leave the vehicle on the public highway. At this point I will also complete and send off section 6 of the V5 document to the DVLA transferring the registered keeper rights to Honda UK.

I am under no legal obligation to sign and return the VT documents you have sent me, this letter is all that is required to proceed with the VT under the Consumer Credit Act 1974.

The below section of the pack I have received (page 2) is not valid under the Consumer Credit Act 1974. If there is any delay with the car being collected thus taking it over the 14 days I will not be liable to pay the outstanding balance.

‘Where we are unable to recover the vehicle within 14 days or you fail to deliver the vehicle to the auction house within 14 days, the outstanding balance on the agreement becomes immediately payable in full’



Please confirm receipt of this request by phone on xxxx or by email to xxxxx


I have also posted a copy of this letter via recorded delivery

[R0b]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Just a few suggestions below.

I understand that I shall be liable to you for the amount calculated under the formula in Sections 99 and 100 of the Consumer Credit Act 1974. Please forward notice of any sums lawfully due for consideration and payment.

This is optional but your giving them ammunition to send you an invoice of charges. Let them come back at you with the charges they want to levy.

The above agreement will be terminated 14 days from the date of this notice, that is 21/01/2016.

I would say the agreement is terminated effective immediately but if you wish to have this then that's fine, the only problem is they might collect the car within 14 days and then charge you for excess mileage. If the agreement has not ended then potentially you could be liable as it was invoiced prior to terminated of s.99

You will be aware that (statute) the Consumer Credit Act prevents you from levying a charge for the recovery of this vehicle; guidelines also state that if you require me to deliver this vehicle it must be no more than a short (reasonable distance) from my registered address; I consider a reasonable distance of 40 miles. If you wish for me to return the vehicle more than a reasonable distance, I require recompensed for all reasonable costs and expenses. Please confirm by return which option you would prefer.

Replace red with blue, I've inserted wording in orange from the quote below, the last sentence is optional if you want to add in. FYI I would consider a reasonable distance to be no more than lets say 20 miles from your home. If you want to be more generous then thats up to you. Just means that you will have to put fuel to pay and then any expenses to get home incurred by yourself.

Alternatively I am willing to return to a Honda dealer within 40 miles of my home address which I consider a reasonable distance to travel.

Remove this point as put this in bold paragraph as above.

I refer to the paragraph in your letter dated [ ] which states the following: The below section of the pack I have received (page 2) is not valid under the Consumer Credit Act 1974. If there is any delay with the car being collected thus taking it over the 14 days I will not be liable to pay the outstanding balance.

‘Where we are unable to recover the vehicle within 14 days or you fail to deliver the vehicle to the auction house within 14 days, the outstanding balance on the agreement becomes immediately payable in full’

May I remind you that, as I have invoked my right to terminate the agreement in accordance with s99 of the CCA, my liability is restricted to half the total amount payable and therefore you cannot enforce the total amount under the agreement. [Furthermore, there is no provision within the agreement which states that you have the right to charge the total price of the agreement where you have failed to collect the car within 14 days. In any event, this would be deemed as a penalty and is not a genuine pre-estimate of your losses.]

Suggested wording in blue, remove wording in red. The last paragraph highlighted in blue in brackets is optional as I don't know if there is any clause that says they can do this. If there isn't then you could include it, if there is something in there then just remove the bold writing.

One other point to make could be what happens if the car is not collected within 14 days due to no fault of your own. You could also include failure on their part to collect within 14 days without any valid reason, you reserve the right to cancel any tax/insurance on the vehicle and shall charge £XX per day until it is collected.

Other than that everything else is fine.

[James1982]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

This is brilliant R0b thank you for such a detailed reply :-)

[James1982]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Hi R0b, I have amended the letter with your recommendations. There indeed isn't a clause in the agreement that states I am liable to pay the outstanding amount in full if the car isn't collected within 14 days so looks like they are trying it on. Can you advise on the below wording used in the pack Honda have sent to me (which I am not signing)

'I understand that until such a time as the collection or return of the vehicle and the sale process has been concluded, I remain liable for all amounts outstanding on the agreememnt'

I am not signing the pack anyway but does this mean if I did sign it then I would be liable to continue with the monthly repayment until the car is sold at auction? If so, that is crazy.

[R0b]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Well, theoretically they could argue that you've signed the paperwork agreeing that your liable however, because the CCA says your liability is restricted, any term imposing further liability even if you sign something would be said to be void. s173 says any term which is inconsistent with the Act (in this case s99) then it is void.

So even if you did sign it, you shouldn't be charged although if it did go to court, the judge might find in favour of the lender as a result of signing the paperwork and would probably need appealing to have some set a precedent. It would just cause further cost to yourself and more hassle from the lender chasing the amount.

[James1982]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Thanks R0b. It is incidental anyway as I am not signing. I think I am confident enough now to send the email and back it up with letter sent recorded delivery. Just one more thing if you may. The part where you recommend me to say I am terminating immediately to avoid being charged excess mileage collection charges - I have checked the agreement and excess mileage is only payable if my address is more than 100 miles from my nearest auction house which it isn't. So does that mean I can give the 14 days notice (ie terminate on 21/01) without fear of being charged excess mileage?

[R0b]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

What I mean by excess mileage is that usually in the agreement there is a clause that says you agree to do X miles per annum if you exceed that amount in any yearly period then they will charge you X pence per mile over and above the amount stated. It's quite standard in hire purchase or conditional sale agreements. If it's not in yours you are one of the lucky ones.

[James1982]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Ah I see what you mean now. The car was six years old when I entered the agreement so I presume excess miles only applies to new cars.

[James1982]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Hi R0b. I am looking to get a scuff repaired on the bumper before I hand the car back. Do you think this is a good idea? I have a quote of £200 but can I leave it and when it gets highlighted on the inspection report just give Honda the quote I have if they try to charge me an arm and a leg to repair? Would this be an option?

[R0b]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Personally, if the car is in a reasonable condition given its age and the scuff isn't that horrendous where it would drastically affect the value of the car then I would leave it. The car will go to auction anyway and lenders don't pay to get the car fixed, they get a report or cost as to what it would cost to have it fixed. Even if they did fix it there is no guarantee that the car would have sold at that value because it was placed in auction and you would expect to get less than anticipated anyway, well that's my argument at least

The choice is yours, will be worthwhile getting a couple of quotes, ask them to put in writing even on some headed paper and then if the lender tries to charge an extortionate amount you can argue that actually it would cost X from the quotes you have got. Even still the lender is likely to have a discounted rate with a specific company to complete the repairs so it might be argued the price is inflated to cover the cost of the repair plus profit.

There's a shedload of arguments both sides can say to recover or dismiss the charges so ultimately its up to what you think.

Edit: can it not be touched up with a bit of spray the day before the inspection? might help reduce any charges.

[James1982]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Thanks R0b. Even though the scuff isn't that bad I think it is noticeable enough if I tried to cover it up with spray.I think I will get a few more quotes and if one is cheap enough I will get it fixed just so I can sleep easy after returning the car without fear of being whacked with excessive charges / bailiffs etc.

- - - Updated - - -

And by the above I don't mean fear of being whacked by a bailiff! That would be something else entirely :-)

[R0b]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

The issue lenders currently have with the reasonable condition section under CCA is that they would need to provide some sort of substantive evidence which can prove the market value of the vehicle as it currently is and the market value if it was in a reasonable condition. That is a difficult task in itself and it will also cost time and money, which they then have to question is it commercially viable to go down that route. The other point to note is by the time you put that to them, the vehicle is likely to have sold at auction so it would be even more difficult to prove.

But anyway if you go ahead and have it repaired take a copy of the receipt of work done so you have proof.

[James1982]

Re: Voluntary Termination of a Hire purchase or conditional loan under the CCA 1974

Thanks again R0b. Undecided what to do, will have to weigh it up I suppose if the second quote comes out at £200 also. Appreciate the advice.