Author : David Riches
Voluntary Termination (VT)VT is available on personal contracts (such as PCP,HP). It allows your
consumer right to terminate the contract of a vehicle (and return it
to the lender) after usually 50% of the financed capital has been
repaid.For some years, some finance brokerages have been advising voluntary
termination as an effective way of disposing of your current vehicle
within a finance contract.It is your consumer right to do so, but this doesn't mean that it
doesn't come without its consequences.
Although VT is not a default or CCJ and wont show as such on your
credit file, potential lenders WILL be able to see that you have
terminated in the past. This is a bad thing....WHY?Put yourself in the shoes of the lender. Your business is the lend
money against vehicles. Your business is not second hand vehicles.
Lenders do not have massively effective means of disposing of such
vehicles (usually car auctions where vehicles will fetch less than
market value). So if the potential client has a history of VTing
vehicles, this can be a much worse risk than a default in their
history.Finance companies or lenders are geared toward recovering defaults,
they have strict, proved methods of recovery, eventually resulting in
court judgments (CCJ's), whereas a judge and courtroom will not sell a
second hand vehicle terminated before the end of the contract.Simple rule is:If you are not at the end of your specified term within the contract
to terminate under normal conditions - DON'T DO IT!.For more information and advice on this subject, please visit my car leasing website at http://www.alphaleasing.co.uk.
Keyword : car leasing,voluntary termination,pcp,hp,personal contract purchase,hire purchase
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