Finance on Motor
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My girlfreind got a BMW 3 series compact on finance two years ago, im at work (black sea) so unable to look specifically at the paperwork etc. If you decide to pay the balance off early would you still incure the interest charges for the full period.Apolgies for the 1.lack of facts 2.lack of knowledge on finance. Always bought cars cash!! Is it a case of the individual loan agreement?
Thanks in advance
Thanks in advance
If she has a regulated HP agreement then she has the option to do a voluntary termination. Basically once 50% of the total amount payable under the terms of the agreement has been paid she can return the vehicle to the finance company and walk away. This apparently does not effect her credit rating as she excercising her rights under the terms of the agreement.
If settling in full then a settlement figure will be calculated using what is now called the actuarial rate but is similar to rule of 78. A settlement figure will contain an element of interest outstanding for the remaining term.
The voluntary termination is a good fall back position but it is the sort of thing you could only really do once!!
Hope this helps
If settling in full then a settlement figure will be calculated using what is now called the actuarial rate but is similar to rule of 78. A settlement figure will contain an element of interest outstanding for the remaining term.
The voluntary termination is a good fall back position but it is the sort of thing you could only really do once!!
Hope this helps
sam919 said:
Deva - It was over four years and inlcluded some other finance on the previous car.
She's paid two years off it 9 grand for the car borrowed, pays back something like 11, for a car now worth 6.5, very sad!
Realise you're guessing a bit, but those figures must be miles out - unless you mean she's already paid back £11K?She's paid two years off it 9 grand for the car borrowed, pays back something like 11, for a car now worth 6.5, very sad!
If she borrowed £9K over 4 years, even at 6% APR then she'll be paying back £15K in total.
She's paid back two years, around 7 grand. And they say she's owe another 7 odd, which is including around 3 from the previous car, so 11 grand odd was with this car and the approx 3 from the previous making 14 odd, which isnt far from the 15. Hope that makes more sense, certainly doesnt to me 
It's a bit pointless guessing without seeing the docs - all this info should be clearly detailed.
It sounds like she may well have paid (inlcuding the p/x value) more than half of the total amount owing so as Mr CF pointed out, if the car is worth less than the amount she owes now, then she could just hand it back under the voluntary termination rules.
It sounds like she may well have paid (inlcuding the p/x value) more than half of the total amount owing so as Mr CF pointed out, if the car is worth less than the amount she owes now, then she could just hand it back under the voluntary termination rules.
Mr Car Finance said:
If she has a regulated HP agreement then she has the option to do a voluntary termination. Basically once 50% of the total amount payable under the terms of the agreement has been paid she can return the vehicle to the finance company and walk away. This apparently does not effect her credit rating as she excercising her rights under the terms of the agreement.
If settling in full then a settlement figure will be calculated using what is now called the actuarial rate but is similar to rule of 78. A settlement figure will contain an element of interest outstanding for the remaining term.
The voluntary termination is a good fall back position but it is the sort of thing you could only really do once!!
Hope this helps
Indeed - would certainly advise against doing a voluntary termination if at all possible - although it does not officially effect your credit rating, it does show on your credit file - and this can influence a finance company's decision as to whether they are happy to lend money to you again.If settling in full then a settlement figure will be calculated using what is now called the actuarial rate but is similar to rule of 78. A settlement figure will contain an element of interest outstanding for the remaining term.
The voluntary termination is a good fall back position but it is the sort of thing you could only really do once!!
Hope this helps
Hopefully she is in a situation where she does have equity in the car now so this wont' be a necessary step for her!
Mr Car Finance said:
If she has a regulated HP agreement then she has the option to do a voluntary termination. Basically once 50% of the total amount payable under the terms of the agreement has been paid she can return the vehicle to the finance company and walk away. This apparently does not effect her credit rating as she excercising her rights under the terms of the agreement.
If settling in full then a settlement figure will be calculated using what is now called the actuarial rate but is similar to rule of 78. A settlement figure will contain an element of interest outstanding for the remaining term.
The voluntary termination is a good fall back position but it is the sort of thing you could only really do once!!
Hope this helps
Nice one ill look into it, sorry about the late reply.If settling in full then a settlement figure will be calculated using what is now called the actuarial rate but is similar to rule of 78. A settlement figure will contain an element of interest outstanding for the remaining term.
The voluntary termination is a good fall back position but it is the sort of thing you could only really do once!!
Hope this helps
rfoster said:
Mr Car Finance said:
If she has a regulated HP agreement then she has the option to do a voluntary termination. Basically once 50% of the total amount payable under the terms of the agreement has been paid she can return the vehicle to the finance company and walk away. This apparently does not effect her credit rating as she excercising her rights under the terms of the agreement.
If settling in full then a settlement figure will be calculated using what is now called the actuarial rate but is similar to rule of 78. A settlement figure will contain an element of interest outstanding for the remaining term.
The voluntary termination is a good fall back position but it is the sort of thing you could only really do once!!
Hope this helps
Indeed - would certainly advise against doing a voluntary termination if at all possible - although it does not officially effect your credit rating, it does show on your credit file - and this can influence a finance company's decision as to whether they are happy to lend money to you again.If settling in full then a settlement figure will be calculated using what is now called the actuarial rate but is similar to rule of 78. A settlement figure will contain an element of interest outstanding for the remaining term.
The voluntary termination is a good fall back position but it is the sort of thing you could only really do once!!
Hope this helps
Hopefully she is in a situation where she does have equity in the car now so this wont' be a necessary step for her!
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