Car Finance Voluntary Termination - Tips?

ShadowMan

ShadowMan

ShadowMan

Associate
Joined
18 Oct 2002
Posts
1,803
Hi

About to VT my car finance agreement in the next few weeks as the owed amount surpasses the value (edited for clarification) figure by quite a sum. I have received a promotion at work which includes a company car and fuel car (No cash option) so this seems like the best route to take.

I want to ensure they cannot hold me liable for anything on the car and it is in my opinion a good example of a car of its age with no major faults or marks.

Everything I read talks about fair wear and tear. The car is a 2003/4 Audi A4 Avant with 120k miles on it. There are no rips in the seat and the paintwork is in good condition (Had a front end respray in 2010 following a non-fault accident).

Has anyone who has VT'd their car got any hints on what they are likely to look for? I have 1 payment left to make and will be handing it back end of March with only a week or 2 left until MOT day. Tyres are all in good condition and it was fully serviced 3 weeks ago.

I have considered the options and feel VT is best for me and I just want to be rid.

Thanks
 
Last edited:
One of the problems with VT is that it will be marked on the agreement on your credit file as VT. Future financiers may run a mile when they see this.

I've no experience of actually doing this, or of anyone being declined - I just know somebody who does car finance and mentioned this in another discussion on another board.
 
I did this back in 2006.

I spoke to the finance company, they sent someone to have a look and said I had to pay x amount, think it was a few hundred quid, as the car had some marks on it.

Then I dropped it off at a local Manheim Auctions place and that was it, done.
 
I am not too worried about it appearing on my credit file as I cannot forsee me wanting to take our credit on a car again. Future purchases should be via savings. Learnt this lesson the hard way.

I have had a brief conversation with the finance co who said I can drop it off at the local auction site in my home town so bonus for no travelling but still concerned of what they will try and say I own for marks etc. Stonechips on a 120k 9 year old car are inevitable and I think should be part of wear and tear etc.

Any specifics to watch for or examples would be greatly appreciated.

Thanks
 
The settlement figure is just that - the figure to settle the agreement. If the amount owed is more than the settlement figure thats highly unusual but surely good for you, as they seem to want less than you owe in order to settle, so why not just.. settle?

I am confused as to how you are in a situation where you have a 9 year old 120k mile car yet owe a pile of finance on it? Did you take out a 10 year finance package or finance a car that was already pretty old or something?
 
That was a mis-type. Should read :"Amount owed in the settlement figure is more than it it is worth (I could reasonably sell it for). Typing 2 things at once and mixed them up.

I am in this position as I came from a position of having a company car and buying what I thought was a good deal on finance. I was happy with the terms and did not expect to be offered a company car during the term of the deal. Now I have been I have looked into how much is owed at just under 50% of the term and it is more than I could sell it for.

As such I want to VT.

Thanks for pointing out the mis-type as it did not actually make any sense as it was written. Will edit now.

For reference, I owe £4200 and I could sell it for between £3 and £3500. So I can either VT and owe nothing and get a mark on my credit record saying I VT'd or I can stump up £700-£1200 to get rid of it. It was bought with just over 60k miles on it and the rest I have put on over nearly 2 years (Did not expect this sort of mileage when I bought it as using it for work which is why I am now getting the company car and promotion).

Thanks
 
Last edited:
VTing shouldn't be a problem just as long as your car is in reasonable condition for its age and mileage.

Although it will appear on your credit file it will not make a difference to your credit score, your current lender might take a different view when offering you finance.

Ie: offering you finance less termination rights.
 
ShadowMan said:
I am not too worried about it appearing on my credit file as I cannot forsee me wanting to take our credit on a car again. Future purchases should be via savings. Learnt this lesson the hard way.

I have had a brief conversation with the finance co who said I can drop it off at the local auction site in my home town so bonus for no travelling but still concerned of what they will try and say I own for marks etc. Stonechips on a 120k 9 year old car are inevitable and I think should be part of wear and tear etc.

Any specifics to watch for or examples would be greatly appreciated.

Thanks
Click to expand...

Pft, Cash is King.

So what if it hits your credit score. I doubt it'll do that much damage.
 
The credit side of things wont just effect you trying to get a car on cerdit remember, it will efect you in any credit you apply for, or at least will show up.

Credit card, mobiles, mortgage whatever a search is done for the VT marker would show up AFAIK
 
~Divine~Wind~ said:
The credit side of things wont just effect you trying to get a car on cerdit remember, it will efect you in any credit you apply for, or at least will show up.

Credit card, mobiles, mortgage whatever a search is done for the VT marker would show up AFAIK
Click to expand...

VTing a car does NOT adversely affect your credit rating, it MAY or MAY NOT influence the current lenders decision to lend again (understandably).
 
Maz said:
VTing a car does NOT adversely affect your credit rating,
Click to expand...

There is no such thing as a 'credit rating' therefore I guess this is completely true, but not for the reason you think it is, if that makes sense.

All there is is a credit file - which lenders can access and use the information on it to make decisions about whether to offer you credit, under which terms, etc etc.

Which means that..

it MAY or MAY NOT influence the current lenders decision to lend again (understandably).
Click to expand...

Is basically what people mean when they say it affects your 'credit rating'.
 
[TW]Fox;21309891 said:
There is no such thing as a 'credit rating' therefore I guess this is completely true, but not for the reason you think it is, if that makes sense.

All there is is a credit file - which lenders can access and use the information on it to make decisions about whether to offer you credit, under which terms, etc etc.

Which means that..



Is basically what people mean when they say it affects your 'credit rating'.
Click to expand...

Rating / Score. Most lenders do a quick search on a score first, and if the score is high enough then further underwriting is not required 'rare situation'.

If you VT'd a car with Santander for example, then it will NOT affect your ability to get credit from say Blackhorse.

Santander may offer you another loan but on terms without VT rights, but then again not always.

On your credit file it will simply be updated with 'settled', providing you have not missed or had any late payments then your score will not be affected and no adverse information left on your credit file.
 
Maz said:
Santander may offer you another loan but on terms without VT rights, but then again not always.
Click to expand...

You cannot be offered HP but without VT rights. If its regulated under the Consumer Credit Act (1974) (Which almost all agreements are), the customer has VT rights. It isn't something the lender can choose to grant - it's a statuary right under the act.
 
rafster said:
VT does not leave any different mark on your credit file than paying it off. Surely it will show "Settled"?
Click to expand...

Nope, its there for them to see.

According to Experian:

The following information may also be included with account details on your report.

Voluntary
termination
The lender has reported that the account has been closed under Section 99 of the
Consumer Credit Act 1974.
Click to expand...
 
[TW]Fox;21309978 said:
You cannot be offered HP but without VT rights. If its regulated under the Consumer Credit Act (1974) (Which almost all agreements are), the customer has VT rights. It isn't something the lender can choose to grant - it's a statuary right under the act.
Click to expand...

Correct, they can however offer you the same deal but as a 'Personal Loan' or 'Motor Loan'.

This is what happens to people with loads of negative equity as the lender understandably wants to protect themselves from the customer borrowing more than the car was worth initially and then VTing the car at 1/2 way leaving them with the outstanding negative equity - by removing those rights and switching them into a different product.
 
Ok but thats pretty much the same as being refused hire purchase, becuase thats effectively what they are doing - refusing to offer you HP :p

Surely more risk for the lender doing that anyway as they wont own the car if its a personal loan. Infact arguably a customer is usually better off with a personal loan.
 
[TW]Fox;21310028 said:
Ok but thats pretty much the same as being refused hire purchase, becuase thats effectively what they are doing - refusing to offer you HP :p

Surely more risk for the lender doing that anyway as they wont own the car if its a personal loan. Infact arguably a customer is usually better off with a personal loan.
Click to expand...

Well no, the current lender might not offer you HP because you VT'd a car with them but it wouldn't stop or affect another finance companies decision to offer you HP.

No they won't but they still have an interest in the amount lent out so have powers to repossess to satisfy that debt and the HPI register is marked with this financial interest so the customer can't sell the car without settling, so not as beneficial to the customer but more so for the finance company.
 
You must log in or register to reply here.
Back
Top Bottom