Santander car loan

[The Debt Star]

Re: Santander car loan

Good posts FF, thanks.

[fiscalfool]

Re: Santander car loan

Quick update to the above post.

Jen, while I agree with most of what you are saying. In my experience of VT'ing several times, it doesn't really have an effect on credit rating. BUT because finance companies hate it so much and have tried to get it removed from the Consumer Credit Agreements, this is why they try to push you towards Personal Finance by trying to scare you off.

Let's face it ... They have a big loan that they don't have to deal with a crappy car half way through, that has depreciated like a brick and potentially lose out on half the interest payments too.

Secondly IF it's Personal Finance, you DON'T get a VT clause at all. You can Voluntarily Surrender, but NOT VT.

Lastly ... use the WeBuyAnyCar.com site to give you the very worse case price for the vehicle. It's what it would achieve in an auction. Use www.Parkers.co.uk to get a better valuation (if you don't have access to a friendly salesman with Glass' Guide).

[fiscalfool]

Re: Santander car loan

I have a motor loan with Santander. Originally GE money. Used it purchase a car from the car shop in November 2008. its for 5 year term so I'm just under half way through (half way in May).

I want to give them (Santander) the keys and walk away from the loan.

Unfortunately the contract states that I have to pay a cash lump sum if terminating early. There's no mention of any return of goods for termination payment, just cash settlement.

On my wife's car loan with Black Horse it clearly states that she can, if she wants, hand the car over in settlement once half the repayments have been made.

With my motor loan this does not appear to be possible.

Does anyone any experience of this? Does the contract HAVE to stipulate that return of goods is permissible?

I haven't read all the replies but, from what I know there are multiple ways to finance a car purchase (note not lease):

* Cash - Car is yours
* Bank Loan - Car is yours, bank have no interest in car
* Personal Finance - Arranged when the car is bought, but essentially just a loan for the value of the car. Finance company has no interest in car. Sometimes a lump sum payment at the end.
* Hire Purchase - Car is owned by the finance company until certain payments have been made.

Let me explain Hire Purchase in more detail:
Generally Hire Purchase agreements of less than £25k will have a "Voluntary Termination" clause. This means that once you have paid half of the original amount, then you can terminate the agreement. Hand back the car and the keys, and the agreement is terminated. Car finance companies HATE this, because you can finance a car over 5 years, keep interest low, and then hand back the car after 2.5 years. They say "It will affect your credit rating ... but I've done it several times without worry".

Now, if you have HP, then if you default on the agreement without paying 1/3 of the amount owed, they can turn up and just take the car back. So long as it's on public property.

If you've paid more than 1/3 ... then they have to apply to the court for a Return Order.

This is generally termed the "Rule of Thirds and Halves".

If you go bankrupt with HP, then you have NO claim over the car at all.



If you have Personal Finance and are experiencing issues, then speak to the finance company. They might be able to change payments, or come to a short term arrangement.

The other option is that you can "Voluntarily Surrender" the vehicle, whereby you hand it back to the finance company, they put it through auction and get very little for it, and they subtract that from what you owe. REALLY BAD idea, best to sell privately and then ask the Finance Company for a "Redemption Figure".

Remember a "Redemption Figure" is a bit like Del Boy saying "Come on then geezer, give us a discount if I pay it all of now!", whereas "Outstanding Balance" is just the amount remaining to be paid.

[The Debt Star]

Re: Santander car loan

yeah, not the news eh, but confirms the webuyanycar.com quote

i'm always the bridesmaid...will catch me some good luck someday

[jen_br]

Re: Santander car loan

I hope my email helps sorry not the news your looking for, but rest assured you now have options

[The Debt Star]

Re: Santander car loan

guys - brilliant posts - thank you. Again, this site has demonstrated excatly what these forums are all about. Well done y'all.

Jen i will PM you.

DS

[jen_br]

Re: Santander car loan

And he does stress that all though you aren't suppose to get discriminated against for having a VT-- you will.

[Never-In-Doubt]

Re: Santander car loan

I'd go speak to phil Mitchell mate!

Jen, brilliant info. Thanks a lot.

[jen_br]

Re: Santander car loan

Ok, he said after looking at it they aren't offering a VT which by rights they have to and the automotive industry has a different batch of rules heres your options:

Allow the Finance company to sell it for you (they would do this and issue you with a VT) because a lot of people are having this issue. but you will be liable for any monies still owing

Why do you think your car has lost that much in value? What type of car is this and who is giving you this figure? If your going to garages yes they will undercut.. he did say give me the make model etc he will get a value for you (well value without seeing and only through Private messaging)

You can sell the car privately and get a lot more chances are-- HOWEVER you must pay the finance off before you sell so the buyer pays the finance direct or pays you to pay them ... but this must be paid off! Because most people will check on an HPI register.

So those are your options

car companies are taught NOT to mention VT by the finance companies customers can talk about it but the sales staff can just agree and not make any comments... but you must be HALF way through your payments.

[Never-In-Doubt]

Re: Santander car loan

Jen the clause regards to handing keys back is the legislation written into cca1974 that I mentioned. As I say, their contract can say anything but you know what? The cca1974 supersedes it. Lol

It'd be interesting to see what other errors mr BR will find, handy to have around. Does he want a job lol. Yea right, you pair on here would be a nightmare haha

[jen_br]

Re: Santander car loan

BTW if you hand your car in you will get marked with a VT (voluntary termination) all though this is NOT suppose to go against you... in the real world it does.

My husband is just reading your agreement now he will tell you exactly what will happen give him a few .....slow reader.

[jen_br]

Re: Santander car loan

Hi I just wanted to say my husband is a car salesman and generally (now MB uses a different finance company) but he did say to look through because generally there is a clause that says you can hand in your keys

ONCE you are half way through your contract minimum

If you hand your keys back now technically they would auction your car and lets say you had 3k left on it for finance at auction if it made more youd get the more... if it made less youd still owe

Hope this helps Its handy having an FSA approved guy in the motor industry

If you need any further help pending on the type of car it is pm me

[Never-In-Doubt]

Re: Santander car loan

One is the rate for finance (interest rate) the other is under the ppi bracket which was slightly higher. It wasn't applicable of course as no ppi taken.

The admin fee is rated separately as it was added to the loan as separate finance at 7%.

[oscar]

Re: Santander car loan

Just a quick query - Page 1 - why is there two differing interest rates?

Not to up on Car loans so may be simple answer....

[Never-In-Doubt]

Re: Santander car loan

ps when I say cca I mean consumer credit act 1974 - not an agreement lol.