# What happens if i hand my car back to the finance company??



## liketoknow

Hi there, sorry if im posting in the wrong section , please move this if i have mods.
Im in the unfortunate position of not being able to afford my car repayments anymore. I contacted the financial institution who wanted to know nothing about reducing payments etc.
I did try sell it for 6k less than i owe and was willing to take the hit of 6k and pay the bank the 6k over a period of time but failed to find a buyer.
Im now going to write to the bank to tell them to come get the car. i havent missed a payment as yet and i have the money to pay tomorrows payment but after that i wont be paying for it and want them to come and take it. 
My Question is will i be blacklisted for this ?
What will happen when they take the car ?


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## Speedwell

This is called "Voluntary Surrender". You will have to write a letter to the financial institution stating that you are handing the car back. It will also have to state in the letter that you are liable for any money owed when sold. 

Basically you can do this without a black mark on your credit rating if you have paid a certain amount off your car. Read the T&C of your finance.

It is essential that you pay tomorrows payment and then when it is closer (perhaps 1 - 2 weeks) before your next repayment is due that you then send in the letter. You must write this letter before your next payment. It will take approx 1 week to 10 days for them to come collect your car. 

If they sell the car for less than is owed you will still have to pay the balance. Hope that this helps.


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## liketoknow

thanks veron,
i havent paid a third or a half off it so im wondering if i hand it back will i still get blacklisted even if its a voluntary reposession rather than an unvoluntary one ?


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## Speedwell

I am not sure about that. Read your T&C it might say something. Or else ring your finance house and ask them. 

All I do know is you will get black listed if you do not voluntarily surrender the car. 

Sorry for your trouble.


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## Bronte

I imagine you would be better off selling the car yourself, you will probably get a higher price than the finance company.


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## moneyhoney

Read this:

http://www.itsyourmoney.ie/files/publications/p_20080128041858Car Finance Jan 08.pdf

Don't confuse the 'third rule' with the 'half rule'

Third rule: If you have paid off less than one-third of the
hire-purchase price, a lender can take back the car
without taking legal action against you. A lender can
only do this if you broke the terms of the agreement
– for example, if you missed any payments or
damaged the car. The lender must give you notice in
writing and must give you 21 days’ notice to fix the
problem. *You would still be liable for the difference between what they sell the car for and what is owed.*

Half rule: Half rule: To end an agreement, you must let your
lender know in writing that you are ending it under
the half rule. Having ended the agreement, you must
pay half the hire-purchase price, less any payments
you have made to date (including any deposit you
paid), and return the car.


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## liketoknow

moneyhoney said:


> Read this:
> 
> http://www.itsyourmoney.ie/files/publications/p_20080128041858Car Finance Jan 08.pdf
> 
> Don't confuse the 'third rule' with the 'half rule'
> 
> Third rule: If you have paid off less than one-third of the
> hire-purchase price, a lender can take back the car
> without taking legal action against you. A lender can
> only do this if you broke the terms of the agreement
> – for example, if you missed any payments or
> damaged the car. The lender must give you notice in
> writing and must give you 21 days’ notice to fix the
> problem. *You would still be liable for the difference between what they sell the car for and what is owed.*
> 
> Half rule: Half rule: To end an agreement, you must let your
> lender know in writing that you are ending it under
> the half rule. Having ended the agreement, you must
> pay half the hire-purchase price, less any payments
> you have made to date (including any deposit you
> paid), and return the car.


thanks moneyhoney,
just read that , but it still doesnt say what happens if i vountarily hand over the car. i read my t and cs and they dont say much either


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## moneyhoney

If you voluntarily hand over the car, you still have to pay up! 

If you no longer want to keep the car, or find that
you cannot afford the repayments, you can end a
hire-purchase agreement at any time. However,
you must:
• give notice in writing and return the car;
• pay half the hire-purchase price, less the
total of your payments to date (including
any deposit you paid). This is sometimes called
the 'half rule' - see page 14; and
• pay the cost of any repairs needed if you
have not taken reasonable care of the car (see
page 16).

Half rule: To end an agreement, you must let your
lender know in writing that you are ending it under
the half rule. Having ended the agreement, you must
pay half the hire-purchase price, less any payments
you have made to date (including any deposit you
paid), and return the car.

If you don't tell them it's under the half rule, then they will sell the car, deduct what they get from what you owe them (probably not much) and you will owe the rest. Hard to know what would work out more expensive - how much have you paid off? How much more would you have to pay to reach the half?

*If you sign a “voluntary
surrender form”, you
give up your right to end
the agreement under the half rule. If
you are giving the car back under the
half rule, make sure you do not sign a
voluntary surrender form when you
leave back the car.*


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## delgirl

moneyhoney said:


> Once you have paid half the hire purchase price (HP price will be written on agreement) you can return the car & walk away with no further liability.
> 
> The half rule is a right under the Consumer Credit Act. Give free legal advice a call if you want further info on it.


We have discovered the hard way that this is only true if it's a personal hire purchase agreement.

We have a vehicle that we purchased thru our business partnership and are unable to give it back under the half rule as that only applies to consumers.

We've tried selling it way under market value and unfortunately there have been no takers.  The bank isn't interested and will only take it back under voluntary surrender, auction it and we have to pay the balance which could be as much as 10 or 12k.

OP definitely needs to speak to someone at MABS (1890 283 438), I found them very helpful with information, even though we couldn't get out of the hire purchase agreement.  

OP could also call It's your money on 1890 77 77 77.


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## hairy666

*personal loan*

i was told by my car company that i had hp but later found out it was personal loan can i vt my car


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## moneyhoney

hairy666 said:


> i was told by my car company that i had hp but later found out it was personal loan can i vt my car



Not sure what you mean by vt?

You can always sell the car & put the money towards the loan & try & make up the rest.


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