Voluntary Termination or Voluntary Surrender of your vehicle if your circumstances change
We understand that everyone’s circumstances, financial or personal, can change at any moment. Such changes may mean that you need to look at your options to return your vehicle. This could be because you no longer need your vehicle, need a different vehicle, or sadly can no longer afford your current vehicle.
You have different options when it comes to ending your hire purchase agreement.
Changing your vehicle or repaying early
If you are looking to purchase another vehicle, then the option to part exchange may be the most suitable for you. This way you are minimising your losses and receiving a new vehicle at the same time.
You can also look to settle your agreement early. An early settlement figure may give you a rebate of interest, depending on the time in the agreement you settle. Speak to us for further information on the different options around this.
Selling your vehicle
Until you have settled your hire purchase agreement, you do not legally own the vehicle. Therefore you cannot simply sell your vehicle on without our permission. Doing so could result in severe consequences as it is a criminal offence to knowingly sell goods you don’t own.
In limited circumstances we may be willing to grant permission for the vehicle to be sold providing that this results in the hire purchase agreement being settled.
Handing the vehicle back to us
If you are simply looking to end your finance agreement and return your vehicle, then you have the following options.
Voluntary Termination
Under the Consumer Credit Act 1974, you have a legal right to end a car finance agreement, as long as certain conditions are met.
Voluntary Termination involves the return of the vehicle to us and repaying at least 50% of the total amount payable under the agreement. This includes any fees and interest.
You will usually reach the 50% repayment point about halfway through the agreement term. However, if you are unsure then as a lender we can confirm how much you have repaid and how many more payments are required.
For this option, the vehicle needs to be in a good working order, have a valid MOT and have all documents up to date. You will be responsible for any faults and damages not classed as general wear and tear.
If the vehicle does not have a valid MOT. It is subject to a non-roadworthy charge of £90.
A voluntary termination may leave a record on your credit report and this may make it more difficult to obtain credit in the future.
Voluntary Surrender
Voluntary Surrender of the vehicle involves the return of the vehicle at any point in the agreement. The vehicle is returned to us and then sold at an auction. Once sold, the proceeds from the auction will be deducted from your outstanding balance and we will contact you to confirm the shortfall balance you are liable for.
At this point this is classed as an unsecured debt and you are liable to repay this in full. However dependant on the account review and your current circumstances, other options for repayment can be looked at.
Returning the vehicle
For either of the above options, the vehicle can be returned by a local drop off (FREE of charge) or a collection at a location of your choice. A collection costs a minimum of £300, if the vehicle is non-roadworthy/without a valid MOT, further charges will be added for transportation and the costs of these vary per area. In some cases, it may be cheaper for you to organise your own transport of the car.
Voluntary Termination or Voluntary Surrender – What should you do next?
- Contact our collections team to confirm the figures for a voluntary termination and surrender. Our agents can help you decide which option would leave a lower debt for you to pay at the end.
- Assess your situation and make a final decision.
- Notify our agents of your decision and arrange the return of your vehicle by drop off or collection. Our agents will advise of the closest collection point to you. You will be asked to sign a form to confirm the option you chose.
- Return the vehicle and await contact from our agents to confirm any balances left to pay or closure of your agreement.
If you are still unsure, please contact us to discuss all your options in full. This will allow you to make an informed decision most suitable for you.
