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Half The Total Amount Payable Rule

If you are thinking of changing your vehicle but think you owe too much on your existing finance, this may not necessarily be the case.

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The Halves Rule

If you have a regulated finance agreement on Hire Purchase or Conditional Sale including Personal Contract Purchase and have paid half the total amount payable or more, you have the right under the Consumer Credit Act of 1974 to return the goods. Even if they are worth less than you owe. 

The total amount payable is everything you would have paid if the agreement had run its full term (the amount borrowed, interest, fees and charges). 

For instance, a vehicle cash price of £10,000 plus interest and charges of £2,000 gives a total amount payable of £12,000, you are entitled to return the goods if you have paid £6,000 or more. 

If your deposit + monthly payments do not equal this amount, you can make a single payment to reach halfway. 

This is known as Voluntary Termination or VT, it is not the same as a finance settlement as title to the goods will not pass to the customer if an agreement is terminate.

Will there be anything else to pay?

If you have taken reasonable care of the vehicle, ensuring it has been serviced correctly to the manufacturer’s specification, is in good order with no damage or abuse, you can hand it back and pay no more. 

However, in the case of a Personal Contract Purchase, if you have exceeded the contract mileage you will be charged at a pence per mile rate for any excess mileage as stated in your agreement.

HP or PCP return requirements

To check if you are eligible to return a vehicle, there are a few things to check first. For one, it must not have been used for hire or reward. It must also be completely free from accident damage. We can give an indication of anything that may be required before returning a vehicle. 

If you are feeling stuck, please give us a call on 01570 470661 and we can help discuss your options.

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17th of December 2018