What is the half rule?

The half rule is part of the Consumer Credit Act 1995 and gives you the right to end a hire purchase agreement at any time. The half rule limits your liability to half the hire purchase price of the car.

Does voluntary termination affect credit rating?

The reality is if you do voluntary termination properly, they can’t stop you. What’s more, voluntary termination will not affect your credit score or credit rating. However, some finance companies may decline any further finance applications from you.

What happens if I sell a car with outstanding finance?

If you sell an automobile with outstanding finance on it without informing the buyer of the situation, it is likely that the finance company will track them down to repossess it.

Is it illegal to sell a car with outstanding finance?

it is illegal to knowingly sell a vehicle that has an outstanding finance agreement. This means that if you have a car on finance and you wish to sell it, you need to ensure that the finance is settled first.

Can I give back a car on finance?

If you can’t afford your car payments, you can give the vehicle back to your car loan lender. But just because you surrender the car doesn’t mean that the creditor has forgiven the debt or that it has to. The creditor can still sell the vehicle and sue you for any deficiency.

Can I sell car on finance?

You can’t sell a car on finance as you don’t legally own it until you have made all your payments. However, if you bought your car using a personal loan, you can sell the car whenever you like as you are its legal owner. You just need to make sure you continue to make the monthly loan repayments.

Is it worth paying off car finance early?

Paying off your car finance early can save you money on interest, but it won’t always be the best decision. It could be worth paying off your finance early if: When you finance a car through hire purchase or PCP, you won’t own the car until you make all your payments, so paying it off early means you own it sooner.

Can I return a car on finance?

You can return it, but you’ll probably have to pay back any remaining money you owe on the contract, so if you still have a year left, then the lender will expect a year’s worth of fees up front. In this instance, it’s better to contact the finance company and see what else you can arrange.

Can I privately sell my car if its on finance?

It’s still perfectly legal to sell an encumbered car, and most lenders will still allow you to do so: They may just request that you use the funds received for the vehicle to pay off any of your remaining loan balance.

Can I transfer car finance to another person?

Car loans are the easiest loan to transfer to another person. If the new borrower qualifies for the original loan, then the lender can agree to transfer the loan into their name. The new borrower may wish to get a new car loan from a different lender.

When to use half rule or third rule?

The half rule gives the purchaser the option to voluntarily terminate the agreement once. This option is available once half of the total amount payable has been made prvided arrears are up to date. The third rule gives the purchaser further protection.

What do you need to know about the halves rule?

The amount owed comprises everything the customer would have paid if the agreement had run its full course including the deposit, amount borrowed, interest and all fees and charges. Bring up to date any arrears that are owed to the finance company, even if this results in more than the 50% being paid.

What’s the halves and thirds rule for returning a car?

However, I have been told by a friend that there is some ruling brought out by the government called “Halves & Thirds” or something like that. This apparently allows you to return the car to the provider/finance company without any extra charges and this can be done at anytime as long as you have either paid a half or a 3rd of the value of the car.

Is there a ” halves rule ” for voluntary termination?

It does not apply to lease agreements. Voluntary termination, or VT, is also referred to as the “Halves Rule” because, in order to terminate the contract, the customer must pay or have paid at least half of the total amount owed to the finance company.