"Half rule" hp agreement

beardo81

Hi, question, hope someone can help....

I need to surrender the car, cant afford it and have only 18 months of a 60 month agreement paid, plus im in arrears. Is my only option the VSF? I know im going to get shafted anyway after the car is auctioned, reserve or no reserve on it.

Any help to save me €000's would be greatly appreciated!!

Mena

Is it an Hire Purchase agreement? Have you passed the 50% payments on it?

beardo81

Yup is a HP Agreement with Bank of Scotland. No, havent reached the 50% mark either.
I fear im rightly srewed here, just goin to have to play ball with them?

serjical_strike

hello everyone i have a few quick questions for you if you dont mind..

i have my car on higher purchase and have paid off over 50% of the higher purchase price, now i dont want the car any longer as i have the money to buy a new one straight out. can i return my hp car under the half rule and if i can then what should i exactly say on the letter?? also who should i send this letter too is it the garage i originally got it from or the bank my direct debit is going to??

also when i first went to sign for the car would they have tricked me into signing anything that could have waived the half rule for use in the future, like getting me to sign the voluntary surrender form first day or anything like that???

any help would be great.. thanks

Mena

beardo81 wrote: »

Yup is a HP Agreement with Bank of Scotland. No, havent reached the 50% mark either.
I fear im rightly srewed here, just goin to have to play ball with them?

apologies for the late reply, been on holidays so on here far less. As you've not reached the 50% mark you can't avail of the half rule. Best bet is to talk to them, banks can be very reasonable if you communicate with them before problems start, the last thing they need now is another car on their books that they can't sell.

serjical_strike wrote: »

hello everyone i have a few quick questions for you if you dont mind..

i have my car on higher purchase and have paid off over 50% of the higher purchase price, now i dont want the car any longer as i have the money to buy a new one straight out. can i return my hp car under the half rule and if i can then what should i exactly say on the letter??

Simply phone them up and tell them you want to return the car under the Half rule as per the Hire Purchase Act 1946. They will likely (once the surprise and shock dies down - they could very well deny the Half Rule exists, my bank did at first ) request a letter. Mine simply stated:

Dear X

I am hereby informing you that, under the "Half Rule" as per the Hire Purchase Act of 1946, I am returning my vehicle. Please note that this is not a voluntary surrender and I will not be signing any document to that effect. Please contact me at XXX or on YYY so that we can discuss a mutually agreeable date, time and location for the return of the vehicle.

Sincerely

XXX

That was it. Make sure to quote your HP account number as well.

serjical_strike wrote: »

also who should i send this letter too is it the garage i originally got it from or the bank my direct debit is going to??

The garage has nothing to do with it, deal directly with the bank/finance house.

serjical_strike wrote: »

also when i first went to sign for the car would they have tricked me into signing anything that could have waived the half rule for use in the future, like getting me to sign the voluntary surrender form first day or anything like that???

No, and even if they did you cannot sign away your rights so it would not matter. It's only now that they may (it's low of them, but some do it) ask you to sign one, just say no thanks if they do.

serjical_strike wrote: »

any help would be great.. thanks

Hope that helps. Post here or PM me if you need further clarification.

serjical_strike

that is a great help and it clears up a lot for me, i will be doing this as soon as i get home from chad. good to know they can do nothing about it and that i havent been caught by signing somethin already, thanks again for the help mena.

copacetic

as Mena says, they will tell you there is no such rule, that you'll never get a loan again etc etc and every time you ring they may claim there is no record of any other call. Then they may also arrange to call you and not do so and arrange for people to pick the car up that never turn up etc, just stick at it.

Dr.Tom

Mena wrote: »

As you've not reached the 50% mark you can't avail of the half rule

You can still avail of the "half rule" but you will just need to pay the balance to make up half the total agreed price.

Example:

Total purchase price 20,000 (half of this being 10,000)
So far you have paid 5,000
Balance owing to make up half the total purchase price is 5,000

You contact them,explain the half rule story and tell them you will be sending them on a cheque for 5,000 and handing the car back.

Half Rule:
Pay half the amount of the total hire purchase price* (if the total of instalments already paid have not reached that amount) and return the goods to the Bank.

* check your agreement as total hire purchase price does not always equal half your instalments, can sometimes be more and a lot of times be less (if deposit / upfronts payments made).

lanners37

Mena wrote: »

No, just don't sign it. If you sign a VSF, you are still liable for the entire agreement. If they ask you to sign it, just say no thanks.

Good Morning,
I returned car to a mutually agreed venue on 16/07/09.Received a letter from the Hire Puchase Company this morning(dated 13/08/09),demanding 2200 euro,or threatening legal action!!They claim that,after their assessors report,there were scratches on bodywork,and a slight mechanical problem(misfire in engine).
I kid you not,the car was 100% pristine when I dropped it off,no scratches(I even had a panel beater look over it on 15/07/09),and car was in perfect mechanical order.
This is obviously a blatant attempt to recover some of the depreciation loss on car(i reckon it is worth 17k-18k),half rule figure was 21k-22k.
Any advice on what I should do?

Mena

lanners37 wrote: »

Good Morning,
I returned car to a mutually agreed venue on 16/07/09.Received a letter from the Hire Puchase Company this morning(dated 13/08/09),demanding 2200 euro,or threatening legal action!!They claim that,after their assessors report,there were scratches on bodywork,and a slight mechanical problem(misfire in engine).
I kid you not,the car was 100% pristine when I dropped it off,no scratches(I even had a panel beater look over it on 15/07/09),and car was in perfect mechanical order.
This is obviously a blatant attempt to recover some of the depreciation loss on car(i reckon it is worth 17k-18k),half rule figure was 21k-22k.
Any advice on what I should do?

I had the same, though mine came to €1100.00. I just paid it, after making numerous complaints about the way it was handled (same thing - first contact from them was a demand with a legal threat).

In my case, there was some damage to the car and the amount they asked for was roughly equal to what I thought it would be after checking it out. In your case, they seem to be taking the piss.

I'm not qualified to advise you in this case, I am certainly no solicitor. If I were you however, I would contact them and state you are disputing the amount and ask to see details of what was involved. I would also contact my solicitor.

It may however, in the long run, just be easier to pay it and walk away.

lanners37

Hello Mena,

Thank you again for the advice.In all honesty I think that I would rather go to jail than give them a cent!!!
I returned my car in immaculaute condition,as per my legal rights.How dare they try it on to the tune of 2200 euro,in such a heavy handed fashion,brazenly,with no basis for their claim.What was to stop them demanding 5k-6k!!!???

If am refuting their claim in full,and if I hear from them again I will:

1.Take legal advice,obviously.
2.Complain the institution involved to the Financial Services Ombudsman etc
3.Post details of the half-rule on every website/webforum imaginable,advising people how to act(take pics of car,get assessors report before return etc)The half rule is a little known loop hole at the moment,and people out there who are struggling with repayments have a right to know about it.The financial institutions involved will then have cars coming back to them quicker than they can handle them!!!

gafarrell

Do anybody know if the "Half Rule" applie to a Lease agreement or is it just for Hire Purchase agreements?

Mena

gafarrell wrote: »

Do anybody know if the "Half Rule" applie to a Lease agreement or is it just for Hire Purchase agreements?

Just Hire Purchase.

Dr.Tom

gafarrell wrote: »

Do anybody know if the "Half Rule" applie to a Lease agreement or is it just for Hire Purchase agreements?

Just HP as I unfortunately found out. By signing up to a Lease you do away with your rights as a consumer under the Consumer Credit Act 1995 by reason of the fact that the Leesee is not a Consumer and is acting within a trade or business profession,even though Im not (Is this even legal)

Bottom line is Im a Joe Soap who just happened to need a van for hauling his own personal motorcycles about. I am employed by a company (not self employed) and neither have a business,trading name,VAT number nor a business bank account. Always be careful what you sign as none of this was explained to me when signing up for my van. As I dont wanna get a bad credit rating Im stuck now with a van worth half what I owe on it

FridgePack

That's interesting about the van and lease. I have a van for personal use (windsurfing), not self-employed etc. At the time of buying I was told I could not get a car loan and the bank would only lease it to me. In my own ignorance and as no one I know knew anything about this sort of thing I thought it was normal.

With the current price of second hand and repo vans I would save money if I get out of the lease and buy another van for cheaper. I need a NAMA for my van!

fp

Drummerboy08

You dont have to worry about disposing the vehicle with a lease. You should have no worries as to what the van is worth doc, because you dont own the vehicle at the end of the term.

Had you hire purchased the vehicle, your monthly rentals would have been more expensive than compared to a Lease, because you would be financing the entire cost of the vehicle, as opposed to the entire cost minus the residual.

purpleheather

Guys,

Really interesting thread. However...I would like to add a further complication to previous posts. I have had my HP agreement since mid 08 and got made redundant from my job soon after in Sep. Spoke to lender and managed to agree a 3 month payment break which was extended for a total of 9 months (3 seperate negotiations). Following that I have had my monthly payments reduced to just e100 (from e400) pcm until Jul next year.

So I have done the responsible thing and spoken to the lender and hammered out an agreement but I think I have made the wrong decision. I have c.e18k left on the 'loan' and the car was recently valued at around e14k retail by a dealer. On that basis by Jul next year I can expect that to have gone down to e10-12k leaving me with a considerable negative equity based on my current low repayments. And on a even more basic level I doubt I will be able to meet the e400 payments when they go back up in Jul next year!!

Reading the posts I understand I could exercise the half rule but that would mean I still owed them c.e10k! 3 questions -

- Firstly, Can I exercise the half rule knowing I cannot hand them a cheque for e10k?
- Secondly, If I do and I do not have the cheque to give them what are they going to do? I am guessing they will issue legal proceedings and I will compromise my credit rating but the way I see it CRs will mean very little in this country over the next 5 years (which I believe is the length of time it would stay on record)
- Thirdly, is it true that by handing the car back on a VSF they should account for the market value of the property in respect of the original loan - ie Total loan value - (market value of car + the money I have paid) = amount outstanding?

Basically I think the word 'shafted' probably describes my situation quite well but I thought it worth posting to see if anyone had any thoughts/insights they could offer a victim of circumstance!

Thanks in advance!

Senna

purpleheather wrote: »

- Firstly, Can I exercise the half rule knowing I cannot hand them a cheque for e10k?
- Secondly, If I do and I do not have the cheque to give them what are they going to do? I am guessing they will issue legal proceedings and I will compromise my credit rating but the way I see it CRs will mean very little in this country over the next 5 years (which I believe is the length of time it would stay on record)

Simple answer no, you must have paid 50% or more to use the half rule. So you would need to give them the 10k cheque first when/before using the rule.

Just an idea, but could you approach your bank about a loan for 10k, stretch it out over a longer term, 3-5 years. You could be rid of the car and be paying much less per month than your current repayments.

Kartale

purpleheather wrote: »

Guys,

Really interesting thread. However...I would like to add a further complication to previous posts. I have had my HP agreement since mid 08 and got made redundant from my job soon after in Sep. Spoke to lender and managed to agree a 3 month payment break which was extended for a total of 9 months (3 seperate negotiations). Following that I have had my monthly payments reduced to just e100 (from e400) pcm until Jul next year.

So I have done the responsible thing and spoken to the lender and hammered out an agreement but I think I have made the wrong decision. I have c.e18k left on the 'loan' and the car was recently valued at around e14k retail by a dealer. On that basis by Jul next year I can expect that to have gone down to e10-12k leaving me with a considerable negative equity based on my current low repayments. And on a even more basic level I doubt I will be able to meet the e400 payments when they go back up in Jul next year!!

Reading the posts I understand I could exercise the half rule but that would mean I still owed them c.e10k! 3 questions -

- Firstly, Can I exercise the half rule knowing I cannot hand them a cheque for e10k?
- Secondly, If I do and I do not have the cheque to give them what are they going to do? I am guessing they will issue legal proceedings and I will compromise my credit rating but the way I see it CRs will mean very little in this country over the next 5 years (which I believe is the length of time it would stay on record)
- Thirdly, is it true that by handing the car back on a VSF they should account for the market value of the property in respect of the original loan - ie Total loan value - (market value of car + the money I have paid) = amount outstanding?

Basically I think the word 'shafted' probably describes my situation quite well but I thought it worth posting to see if anyone had any thoughts/insights they could offer a victim of circumstance!

Thanks in advance!

I wonder are you still entitled to the half rule , because you have re negotiated the original hire purchase?
If so, you need to look carefully at your loan documents , the Half & 1/3 figures are hand written by the selling car dealer. If you owe less than this 1/2 figure you can hand car back without repercussion

purpleheather

I believe I would still be eligible to exercise the half rule as there were no amendments to Ts&Cs. Only a 1 pager detailing the revised payment schedule.

The loan idea could be an option in theory as it means the bank would still recoup the value of the loan. However, it might be difficult as I am unemployed and therefore 'officially' ineligible for a personal loan. I guess if I went to the bank and said I cannot pay it to them as a lump sum they would have to take me to court and the outcome would probably be the same as issuing a loan as I would have to pay them back over the longer term. hmmmm...

btkm8unsl0w5r4

Senna wrote: »

Simple answer no, you must have paid 50% or more to use the half rule. So you would need to give them the 10k cheque first when/before using the rule.

Just an idea, but could you approach your bank about a loan for 10k, stretch it out over a longer term, 3-5 years. You could be rid of the car and be paying much less per month than your current repayments.

Unfortunatly then you also have no car. Your credit rating will not be effected but a S will go down after the loan (surendered, I know not technically surendered), while this is not all that bad, it will follow you around for years and years.

Dr.Tom

Drummerboy08 wrote: »

You dont have to worry about disposing the vehicle with a lease. You should have no worries as to what the van is worth doc, because you dont own the vehicle at the end of the term.

Had you hire purchased the vehicle, your monthly rentals would have been more expensive than compared to a Lease, because you would be financing the entire cost of the vehicle, as opposed to the entire cost minus the residual.

Any chance you could explain this more please????? Im a small bit confused

Drummerboy08

Dr.Tom wrote: »

Any chance you could explain this more please????? Im a small bit confused

K. If you lease a vehicle (contract hire agreement), basically the company you lease from (Leaseplan, Merrion, etc) will agree with the finance company (Lombard, BOI, etc) to buy your vehicle backat the end of the agreed term, e.g. 36 months & 100,000kms, or whatever it is.

So, lets say you want to lease a new Ford Transit. Lets say the cost of the van is 20k. Based on the length of the lease, and the mileage you will do in each year on the lease, the lease company will put a residual, or a "buyback" into the contract. This amount is the lease company's responsibility to pay - the Customer, i.e. you, does not worry about this.

So, -

Cost of van - 20k
Buyback - 5k (This is the responsibility of the Lease company, or buyback dealer)
Amount to finance - 15k (This amount will be in your name, and is your responsibility)

Thats basically how a lease works, give or take a few bits. However, as the Half Rule only applies to Hire Purchase agreements, you wouldnt be eligible to use it.

If you are in a lease that you cannot afford, I'd speak to whatever dealer you leased the vehicle through. They can get a settlement figure on the amount outstanding, and will try to work with you to come to an agreement that suits both. You may be able to extend the lease term, to try and lower your monthly rental. Hope this helps.

Dr.Tom

Drummerboy08 wrote: »

So, lets say you want to lease a new Ford Transit. Lets say the cost of the van is 20k. Based on the length of the lease, and the mileage you will do in each year on the lease, the lease company will put a residual, or a "buyback" into the contract. This amount is the lease company's responsibility to pay - the Customer, i.e. you, does not worry about this

I never heard of this before and its interesting to know. Should that be in my contract somewhere??

VeryRapidSkoda

Hi all,

I was also interested in knowing about the half rule but I have a question to add. What happens when you trade a car in as part exchange and the balance is financed?

e.g New car €20,00
less Car trade in €5,000
= Finance €15,000

The hp docs include all of the above figures even though only 15,000 owed. They add on interest making the total agreement price of 24,000

They have 1/2 as €12,000
and 1/3 as €8,000

Confused yet? ringing up I found about 14,000 of the 15,000 left to settle. Does this mean I only have 2,000 left to make the half according to the contract?

Can anyone explainthis please?
Thanks.

Donkey101

Hi,

I also havea question regarding same:

half term amount = €21500.00 (as per HP agreement)
Settlement Figure = €30500.00 (as of phone call today)
total of repayments todate = €10100.00 (sum of all monthly payments)

how much would i have to give them when i handed the car back under the half term rule?

is it €11400 (21500-10100)
or
is it €9000 (30500-21500)

thanks.

Also, is the half term amount the amount that has been paid back, or the amount remaining to be paid?

Our man in Havana

It is the amount that takes you to what you would have paid if the term went to half term.

Say for example over the whole term you would have paid a total of €30000. So under the half rule once €15000 was paid you could walk away.

So it looks like you will have to give them another 11,400 to get out.

Donkey101

Sound - Thanks for the bad news.

Any idea how long something like this usually takes?
I have another payment going in the next few days, but would like it sorted before next months payment.

Our man in Havana

They will not be keen to let you away like that. They will deny such a rule exists.

What you usually have to do is send them a letter and the money saying you are invoking the half rule. Expect them to have the car forensically examined for damage so they can charge you more.

Donkey101

Any idea how i can be sure that the amount I send them by cheque is enough to ensure that I am over the 50% requirement.