Hi there

I took out a 43 month lease on a second-hand car in Sep 07. I now want to hand it back as I am having trouble making the payments.

Is there a way of doing this without affecting my credit-rating? If I am happy to have my already bad credit bashed, what options are available to me?

I'd quite happily just give it back and now have to pay anymore.

If you give it back, you still have to make the payments. They may well knock something off for whatever they sell the car for (trade price, of course) and add something on for the trouble, but handing the car back wont get you out of the agreement and it is usually a worse option than asking for permission to sell the car and settle up after the sale.

To add, there should be a Voluntary Termination point in your contract where you can hand the car back once half of the total amount payable is paid if the car is in a reasonable condition.

This might be a more feasable option as the likelihood of your car's value being anywhere near that of the settlement figure is slim.

JJ

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You gotta tie yourself to the mast my friend, and the storm will end.

Check whether your agreement is a conditional sale or a credit sale agreement. If it is conditional sale then under the VT clauses in the CCA (1974) if 50% of the total amount due has been paid you can send it back with no penalty. You should have an option to purchase clause for the balloon payment under a PCP agreement (i.e. to acquire the vehicle if you want to) however check your agreement as this is usually optional. In other words the total amount due should not really include the "option to purchase" payment in case they try and include this.

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Compareiseasy:

In other words the total amount due should not really include the "option to purchase" payment in case they try and include this.

Incorrect.

A PCP agreement is an agreement to buy the car with an option to handback at the final payment point. If you take no action, the finance company will try to take the 'balloon' payment as a Direct Debit one month after your last monthly installment. This is set out in your schedule of payments in the beginning.

The Optional Final Payment (Guaranteed Future Value) is indeed part of the total amount payable.

JJ

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You gotta tie yourself to the mast my friend, and the storm will end.

JJ

I stand corrected and you are right as the GMFV will be taken into account. The wording in the Act is a bit ambiguous i.e. "total amount due" but I double checked with two sources who both concurred with what you have said. Apologies for the confusion.

Hi

The question I need to ask 1st is where did you sign the agreement? Because there are certain agreements that need to be signed on trade premises and if you have obtained your car from one of the many internet brokers we see today then the agreement may be unforceable by the finance company.

I would take this up with Citizens advice or the office of fair trading