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Terminate a Car Finance Hire Purchase Agreement – Letter

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Scott
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Scott Nelson

Managing Director

MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.

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&
Janine
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Janine Marsh

Financial Expert

Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.

Learn more about Janine
· Jan 14th, 2024
Could you legally write off some debt? Answer below to get started.

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For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

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Terminate Hire Purchase Letter

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

Are you needing to end a Car Finance Hire Purchase Agreement? This is a common worry, but you’ve come to the right place. Over 170,000 people come to our website every month for advice on their debt issues, so you’re not alone in your journey.

In this article, we’ll guide you through:

  • What a hire purchase agreement is.
  • If you can cancel your car finance agreement.
  • How to end a hire purchase agreement.
  • If you can get a refund on a hire purchase agreement.
  • How to legally write off debt.

Our team understands your worries, as some of us have been in your shoes, dealing with debt and needing a way out. We know it can feel scary, so let us help you. We have the knowledge to guide you in ending a Car Finance Hire Purchase Agreement.

Let’s learn more about how to solve your debt problem today.

Could you legally write off some debt?

There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out.

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

Letter Template

To Whom It May Concern

Voluntary termination of agreement

Account #: [your account or reference number]* (required)

Car make/model/registration no: [enter the car make/model/registration number here.]*. (required)

I am writing to notify you that I am exercising my right to terminate the above agreement under Section 99 of the Consumer Credit Act 1974.

I understand that I will owe you for the amount calculated under the formula in Section 100 of the Consumer Credit Act 1974.

Please send me details of how the vehicle can be returned to you.

Please confirm receipt of this request by [fax, email or letter]* (required) to me on [insert your fax number, email address or postal address.]* (required)

I look forward to hearing from you.

Yours sincerely


Downloadable Resource

The download links below take you to a Google document template where you can make a copy or save in any document format you like. Note, you may have to login to your Google account.

Download – Single (for one person)
Download – Joint (for couples)

How a debt solution could help

Some debt solutions can:

  1. Stop nasty calls from creditors
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  3. Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:


Situation

Monthly income £2,504
Monthly expenses £2,345
Total debt £32,049

Monthly debt repayments

Before £587
After £158

£429 reduction in monthly payments

If you want to learn what debt solutions are available to you, click the button below to get started.

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What is a hire purchase agreement?

A hire purchase agreement, also known as a HP agreement, is a way to hire a vehicle and eventually own it once all of the repayments have been made. You do not own the vehicle until it has been completely paid off, meaning you cannot sell it or modify it during that time. Moreover, the lender could repossess the vehicle if you fail to keep up with repayments. 

Can I cancel my car finance agreement?

Everyone with a hire purchase agreement on a vehicle in the UK is legally allowed to terminate their agreement using Consumer Credit Act (Section 99). The law states that you can return the vehicle and end your repayments on the same day the vehicle is returned. 

However, Section 100 states that you may have to make a further payment when ending the agreement. Most of the time, creditors require you to have paid at least 50% of the total agreement value. If you have not paid at least half of the hire purchase agreement repayments, they could request that you pay the difference. 

For example, if your hire purchase agreement was 24 months of £100 (total £2,400) and you cancel after 10 months (total £1,000), they could ask you to pay an extra £200. 

Thousands have already tackled their debt

Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.

Natasha

I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

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Can I get a refund on a hire purchase agreement?

You might be wondering if you can get a refund on your hire purchase agreement if you have paid more than 50% of the contract value. 

In most instances, the answer to this is no. But because you have paid more than 50% of the hire purchase agreement value, you probably won’t have to pay any more when you cancel your car finance agreement. 

Be aware that these general rules could be changed by the terms and conditions within your agreement. While some creditors state that at least 50% needs to be repaid, some may require more to be paid back. This will not defer your right to cancel your agreement at any time, but it does mean you may need to pay more when you end the agreement. 

Always check your car finance agreement to find the details. 

How do you terminate a hire purchase agreement?

You should always request to have your hire purchase agreement terminated in writing. That’s why we have created our free terminate a hire purchase agreement letter template. Download it now and make the most of our free helpful resource

Could you legally write off some debt?

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

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The authors
Scott Nelson Profile Picture
Author
MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.
Janine Marsh Profile Picture
Debt Expert
Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.