rowley Posted January 25, 2009 Report Share Posted January 25, 2009 (edited) Hi, Well after much thought and reflection I (think) I have decided to hand my car back to VW. I am working a lot more away from home these days (getting there by train etc), so I'm not doing as much driving. The GTI is 3 years old on March 1st, it probably needs 4 new tyres, and the tax is due at the end of Feb as will be the MOT I guess. Plus I'm paying approx £450 a month on Options. So I think with a heavy heart It makes sense at this moment in time to say goodbye to it. As this is the first new car I have ever had, and the first car on finance, I was just wondering how easy it is to hand back? I have a few options I guess: 1. I could sell it privately, and pay the finance off that way - but I'm hardly around at the moment and second hand cars don't see to be shifting quickly??? The car is well looked after and immaculate so it would make a good home for someone 2. I could keep it, but I'll be paying out quite a lot for very little driving at the moment. 3. I could settle the finance myself and pay it off, but probably will look at something new when I'm not working away so much. 4. Or I can give it back to VW - how does this work? Looking at the agreement, I can hand it back with nothing further to pay, when I have paid at least 50% of the amount payable under the agreement - so after 34 payments of £450 I should have done this? I also put a £1500 deposit down when I bought it. Guess I will just lose all of this, and the only other way to really get this back would be try and sell it privately.. I'm guess I'm just wondering if it is really as simple as ringing up the finance company and saying I want to terminate? Do i then just take the car back to VW Warrington and thats it? Is there also a notice period that I need to give VW or can it be immediate? Any advice would be great, apologies if these are naive questions! Thanks Rowley Edited January 25, 2009 by rowley Link to comment Share on other sites More sharing options...
DHA Posted January 25, 2009 Report Share Posted January 25, 2009 With your deposit and monthly payment its a pretty similar price to what I pay with Bank of Scotland so I suspect your balloon will be in the region of £9,500-£10,000. With trade prices as they are you wont get that for a 3 year old GTI (I was offered £9,750 for my 2 year old car late last year). To hand it back just give VW finance a call, they will collect at your home as the finance is separate form dealerships. Is there any damage to the car? It might need correcting before you hand it back. Also have you kept within the contracted mileage? Link to comment Share on other sites More sharing options...
JonC Posted January 26, 2009 Report Share Posted January 26, 2009 I was offered £9,750 for my 2 year old car late last year That kind of money for this kind of car doesn't bear thinking about. Link to comment Share on other sites More sharing options...
DHA Posted January 26, 2009 Report Share Posted January 26, 2009 That kind of money for this kind of car doesn't bear thinking about. It doesn't, partly the reason I didn't change! :mad: Link to comment Share on other sites More sharing options...
rowley Posted January 27, 2009 Author Report Share Posted January 27, 2009 (edited) Hi DHA, The car is in very good condition, really well looked after, very very small dent in the rear passenger door that VW did when i took it in for my first service. The contract says "reasonable care of the goods" so i'm assuming this will come under that... I'm currently on 31,000 miles, but my 42 month contract say 35,000 miles, so does this mean I am under or over? As i could leave it on the drive now and not hit 35,000 miles, so they can't really tell me that I am over? I think this is based on 10,000 miles a year, so I am slightly over in that respect...... Edited January 27, 2009 by rowley Link to comment Share on other sites More sharing options...
DHA Posted January 27, 2009 Report Share Posted January 27, 2009 Ah if you are not at the official end of the contract you will have two options; 1- Obtain a "settlement figure" from VW finance, this is what it will cost to terminate the agreement without giving the car back to VW finance. I would phone around some dealers and see what they are willing to give you for it. If its more than the settlement figure you keep the difference, any less then you need to pay this to the finance company. 2- Check your finance documents, there will be a voluntary termination clause (it might be called something different) but it will basically be if you have paid 50% of the total finance cost (that includes the balloon payment at the end) then you can walk away. I have PM'd someone on here who deals in finance to see if I have correctly written this all down. Cheers Link to comment Share on other sites More sharing options...
shao_khan Posted January 28, 2009 Report Share Posted January 28, 2009 Dont forget that voluntary termination only applies on regulated agreements, above £25k borrowed and the clauses will depend upon the agreement signed. As it was I handed back my A4 to Audi FInance, ran them up, they came and inspected the vehicle, and took it away - that was that. Link to comment Share on other sites More sharing options...
Booster Posted January 28, 2009 Report Share Posted January 28, 2009 Dont forget that voluntary termination only applies on regulated agreements, above £25k borrowed and the clauses will depend upon the agreement signed. I take it that you mean that over £25k different rules apply? Because looking at how long he has had the car it would have been before the £25k limit was lifited therefore as long as his original amount borrowed was below £25k, he will be able to hand the car back once he has paid half the total amount payable. rowley, as long as you have the clause in the agreement that is something like: You have a right to end this agreement. To do so you should contact the person you make your payments to. They will be entitled to the return of the goods and to half the total amount payable under this agreement, that is £XXXX. If you have already paid this amount plus any overdue instalments and have taken reasonable care of the goods, you will not have to pay any more." E.G. Car costs £10,000. You pay £1500 deposit and borrow £8500. You have interest charges and fees of £2000. The total amount repayable is £12,000. You need to have paid a total of £6000 to hand back. Dave is dead right in what he says. The only thing to bear in mind is that if you do hand the vehicle back having paid your half, then the account will be marked on your credit file at Equifax and Experian as "Voluntary Termination." It is the subject of much debate as to whether this is detrimental or not. In theory, it isn't since you have just exercised your right under the agreement but how lenders look at things (especially underwriters who aren't familiar with vehicle finance) look at this is subjective. Link to comment Share on other sites More sharing options...
Tipex Posted January 28, 2009 Report Share Posted January 28, 2009 The only thing to bear in mind is that if you do hand the vehicle back having paid your half, then the account will be marked on your credit file at Equifax and Experian as "Voluntary Termination." It is the subject of much debate as to whether this is detrimental or not. In theory, it isn't since you have just exercised your right under the agreement but how lenders look at things (especially underwriters who aren't familiar with vehicle finance) look at this is subjective. I've always wondered how it would affect your credit rating if you handed a car back, I never have done, but I've thought about it a few times, due to the mileage I do, I lose a fortune on cars, and it'd save me a few quid to hand a car back half way through an agreement and start another one. Link to comment Share on other sites More sharing options...
lenny Posted January 28, 2009 Report Share Posted January 28, 2009 I'm in eactly the same situation with my R32 ATM... Come May I will have paid 50% of the loan amount off... The car is worth so little now there is no way in hell I want to keep it. TBH the quicker I stop paying for it the better. The final nail in the coffin for me was vw's stunt selling new R32's at knock down prices. I have a perfect credit score so I hope it doesn't go against me. Its funny that even though you have made the repayments required (and on time) that they will hold the Voluntary Termination against you! LOL.... I'm even going to buy the new Rocco using the same solutions scheme. Link to comment Share on other sites More sharing options...
Booster Posted January 28, 2009 Report Share Posted January 28, 2009 Its funny that even though you have made the repayments required (and on time) that they will hold the Voluntary Termination against you! They won't necessarily. You will find that finance companies are asking for bigger deposits and shorter agreement periods on regulated agreements that contain the "half" clause because of the way that cars are depreciating at the moment. Link to comment Share on other sites More sharing options...
Vagabond Posted January 28, 2009 Report Share Posted January 28, 2009 I handed back a car half way through a couple of years ago. The finance company registered it with the agencies and when i went to pick a new car i was refused HP. They would only offer a personal loan. That's all i have had since. They have in effect made sure that i won't be handing anything else back!! Can't beat 'em unfortunately. Link to comment Share on other sites More sharing options...
rowley Posted January 29, 2009 Author Report Share Posted January 29, 2009 Booster, I have that exact statement in my contract and as I've made 34 payments now of 450 quid plus a £1500 deposit i have definitely paid more than 50%. So its sounds like I shouldn't have any problems. I guess the only thing that worries me now is this credit rating issue - it seems rather unfair that you are using you rights under the contact and they then hold this against you. I would love to get a new car again in a few years, but its just not right to keep paying out at the moment Car will need mot - 50 quid 4 new tyres - 500 quid? 450 quid a month 210 quid tax in march 600 quid a year insurance warranty runs out don't know which the lesser of two evils is? But I guess at the moment its best to go with getting rid and cross the potential HP problem at a later time.... what to do! Link to comment Share on other sites More sharing options...
Booster Posted January 29, 2009 Report Share Posted January 29, 2009 How much is your settlement figure at the moment? Link to comment Share on other sites More sharing options...
rowley Posted January 29, 2009 Author Report Share Posted January 29, 2009 Current figure is £11,126.39 valid until 26th of Feb...... Not sure I would get this at this moment in time from a dealer or privately?? Link to comment Share on other sites More sharing options...
Booster Posted January 29, 2009 Report Share Posted January 29, 2009 (edited) Ring round a few dealers and find out what they would offer. If there is only a few hundred shortfall it might be worth paying that yourself to avoid the hassle of the termination business. Edited January 29, 2009 by Booster I can't spell! Link to comment Share on other sites More sharing options...
rowley Posted January 29, 2009 Author Report Share Posted January 29, 2009 vw dealers or dealers just in general - sorry for niave questions, just never done this before. Thanks Link to comment Share on other sites More sharing options...
DHA Posted January 29, 2009 Report Share Posted January 29, 2009 VW dealers, they will give you a "better" price. Ask to speak to the used car buyer when you call up, it will get you speaking to the correct person. They might give you a mobile number as they are sometimes not office based. Link to comment Share on other sites More sharing options...
shao_khan Posted January 30, 2009 Report Share Posted January 30, 2009 I handed back a car half way through a couple of years ago. The finance company registered it with the agencies and when i went to pick a new car i was refused HP. They would only offer a personal loan. That's all i have had since. They have in effect made sure that i won't be handing anything else back!! Can't beat 'em unfortunately. Its odd isnt it - because I have never had any issue since I handed mine back and would do the same again if in teh same position. Link to comment Share on other sites More sharing options...
rowley Posted January 31, 2009 Author Report Share Posted January 31, 2009 Well I've phoned up VW Finance - chap on the phone was very good Basically he checked that I have paid over 50% of the amount and he said I could exercise my right as per the contract. I just need to fax them to make it official. It will then take up to 3 weeks to collect (from my house), and their handler is British Car Auctions - so sounds like it will go for auction straight away - so someone might get a bargain as its in very good nick. Looking at it this morning, gleaming outside, its going to be a real shame, but its the right thing for me at the moment So when its picked up by the end of Feb, I will cancel my direct debit and thats it. It will save me buying new tax, getting the first MOT, buying 4 new tyes and then it going out of warrenty also. Plus in the short term anyhow my monthly payments will stop, my insurance will be refunded and my running costs will go. I also asked about the affect on credit scoring, and he says all that goes on your credit score is that you closed the loan - which people do all the time when they can pay off early - he said at the end of the day I have paid all my stuff on time and they would welcome my business in the future. So I guess I have to take that at face value and hope its true when I look at a new car in the future. Gutted, but pragmatic I guess. Half of me wishes it wasn't that easy. Link to comment Share on other sites More sharing options...
lenny Posted January 31, 2009 Report Share Posted January 31, 2009 I'm going to do the same... I would love to have kept my R32 but the final payment is way more than its worth.. Plus if I end the contract now the final few months loan repayments can be saved for my new motor... Thats great news about the credit scoring thing. I was starting to worry a bt about that as my credit profile is perfect.. At the end of the day a car is just a piece of worthless metal that costs us a fortune. Link to comment Share on other sites More sharing options...
Booster Posted January 31, 2009 Report Share Posted January 31, 2009 Don't forget that the people in call centres often don't have a clue. I don't know of any finance company that wouldn't record it as a VT on your file. Check your own files with Experian and Equifax after a couple of months to see what they have done. Link to comment Share on other sites More sharing options...
JonC Posted January 31, 2009 Report Share Posted January 31, 2009 At the end of the day a car is just a piece of worthless metal that costs us a fortune. But look what joy, excitment and pride can be had from the worthless box. Link to comment Share on other sites More sharing options...
DHA Posted January 31, 2009 Report Share Posted January 31, 2009 Don't forget that the people in call centres often don't have a clue. I don't know of any finance company that wouldn't record it as a VT on your file. Check your own files with Experian and Equifax after a couple of months to see what they have done. What happens if you run to the end of an agreement but hand the car back and do not take the option of paying the balloon payment? Link to comment Share on other sites More sharing options...
Booster Posted February 1, 2009 Report Share Posted February 1, 2009 The account gets closed and marked as settled. Balloon and VT have different settlement flags. Link to comment Share on other sites More sharing options...
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