Car Hire Purchase

[Kid Dynamite 7034]

Anyone had any experience with these?

 

My wife signed up to one for a little Citroen C1 18months ago. It's about £130pm and then she has to pay tax/insurance on top.

 

I assumed annual services would be included but apparently they aren't so she had to get it serviced at Xmas time by a local garage.

 

Anyway last week the car started making a loud grinding noise whenever it went round a corner and one of the window seals was leaking every time it rained. She only puts on 7k miles a year and drives like Miss Daisy so I know it's nothing she's done.

 

I rang the dealership asking for them to take a look and they immediately said there is only a 12 month warranty on the car so we would have to pay for any repairs. They were politely told that a brand new car should not be dropping to bits after 18months and if they didn't pay for repairs it would be sitting outside their dealership at 5pm that night and the direct debit would be cancelled. Needless to say they agreed to pay for the repairs.

 

Then today we get a phone call saying that the part is ready for the car and can we take it in on Friday with the service book to show the service stamp. Not a problem. However, they also want to see a VAT receipt to prove the garage we took it to is VAT registered? Well the garage we took it to is 1 man and his workshop, he earns less than £70k a year and so he has never been VAT registered.

 

None of this was explained to us when we signed up for the car and I'm about to comb through the small print to see if any of this is mentioned. It's becoming more hassle than it's worth though. I fell like paying the £25 to take them to small claims court to argue the toss over the early return fee we would need to pay to just cancel the contract 18months early.

[Kid Dynamite 7034]

I'll be arguing the toss even if it's in the small print. Whether the garage that did the service is vat registered or not has no correlation to a brand new car dropping to bits

[Ruler of Planet Houston 1]

Something that is usually never mentioned in the small print but is ALWAYS a perfectly legal option with hire purchase is to hand the car back at the half way mark and cut your losses. i.e. on a 3 year HP you are entitled to give the car back after 1.5 years (assuming it is in reasonable condition for the time you've had it) and have nowt else to pay - end of contract. It usually works out much better financially than if you were to try and sell the car

Edited June 26, 2012 by Ruler of Planet Houston

[Ugly Mackems 133]

Brand new car should carry a 3 year / 60k warranty. If the C1 was brand new then there would be little doubt that it is still fully under warrenty.

With regards to the warrenty they are correct to see a VAT registered garage did the work. Did the garage replace parts with genuine Citroen parts? If not you could have voided the warrenty. My advice would be to go back the mechanic and ask him if he can supply you with a VAT reciept. He might know folk in the trade who'll cover him. (maybe an offer of a £20 note as a perk)

 

Did you know that if you purchase a vehicle on HP you can hand it back after half the payments. Something to maybe consider.

[Kid Dynamite 7034]

No work has been done by a garage. It had a service, that's all.

 

Does it have to be handed back bang on 18 months or can you hand it back after say 2 years?

[ewerk 30677]

I believe it's at any point after you've paid off half the value of the car. So if there's a final payment involved then it won't be as simple as half way through your repayments.

 

The problem is that you obviously lose the half that you've paid. Is it worth that?

 

Edit: I'm not 100% on the above so someone else may know better.

Edited June 27, 2012 by ewerk

[Ruler of Planet Houston 1]

So long as you have paid half you can hand it back at any time. If you hand it back after paying 2/3 you won't get any refund. You can hand it back after 1 month if you like, but you will have to pay up to the half way point to do so. i.e. hand it back 2 months before half way point and you will have to pay those 2 months payments before dropping it off at the auction yard. Usually the car is worth less on the market than the half that you would have to pay if you kept it.

[Kid Dynamite 7034]

I believe it's at any point after you've paid off half the value of the car. So if there's a final payment involved then it won't be as simple as half way through your repayments.

 

The problem is that you obviously lose the half that you've paid. Is it worth that?

 

Edit: I'm not 100% on the above so someone else may know better.

 

Most hire purchase deals these days require you to pay a hefty lump sum at the end, as this one does. The plan has always just been to hand it back at the end anyway. I assume the 'paid half' bit means half the value of the whole car rather than half of the payments prior to paying the final lump sum?