If you have problems paying off your car, you have several options. This depends on the type of funding agreement you have. For more information on different types of agreements, see the following tabs. For example, if you have already repaid $10,000 and the total amount of funding is $25,000, you must pay an additional $5,000 to reach 50%. The good news is that there are opportunities to terminate a car finance contract. The exact way and cost depends on whether the agreement is PPC or HP, but in both cases you can expect to have to pay sooner than you want to terminate the contract. Note that if the car is leased on a personal contract (PCH), your rights are much more limited and it can be much more difficult to terminate the contract prematurely. As with any credit, if you are in trouble or if you think you are about to talk to the financial company. It is in the company`s best interest to continue your contract to ensure that you can pay monthly payments and that the company gets its money back. Z.B you had a three-year lease that paid $200 a month and wanted to terminate the contract after two years, it would cost you $1,200 (50% of the 12 months in price). Your debts may have an administrative fee or a fee for the collection and disposal of the vehicle that has been added to it. If you don`t pay it, the financial company could hire collection companies or take legal action. If you don`t pay these debts, it will probably affect your credit score.
It is important to remember that the voluntary termination of your car financing contract will not be refunded. So if you paid 65% of the total amount of financing, you will not have repaid the 15% more you paid. Your right to pre-enter into a lease-sale (HP) or personal purchase (PCP) is defined in Section 99 of the Consumer Credit Act 1974. This legislation is designed to protect you if you enter into a financing contract that you will later find unaffordable. If you have not repaid 50% of the total amount of financing, you can still terminate the agreement prematurely by paying the difference. For example, if you have already repaid $15,000 and the total amount of funding is $40,000, you must pay an additional $5,000 to reach 50%. If you have already paid back more than 50%, you can voluntarily terminate your PCP contract. But you won`t get a refund. Leases usually take between 2 and 5 years, the last 3 most common years. Under a lease-sale agreement, the consumer does not own the goods until after the payment of the last tranche, although he has made full use of the goods throughout the repayment period. Depending on your exact contract, you can use “early termination” to conclude the contract.
In general, however, at least half of the remaining costs are paid. If you have repaid 50% or more of the total amount of financing to the financial firm, you can use the voluntary termination clause to terminate your PCP contract. This is a last resort that can only be used if your circumstances are so bad that you have no hope of repaying the lender and you have to return the car to the lender, perhaps without making any further payments. Even if you return the car, you can expect the lender to chase you for more money, as you are in negative equity for much of the term of the contract, the car being worth less than the remaining financing balance. Frequent use of voluntary termination to make cars at an early stage, however, may look bad on your credit file. This is because it costs financial firms more to terminate the agreements prematurely.
