Car Hire Purchase "half rule"

E

eok56

Registered User
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Today I was doing some research on the the Hire Purchase Act 1946 and came across the half rule agreement!
Looking at my credit agreement with PTSB finance.

Cash Price (A) = €12000
Deposit/Trade in = €3000
Total amount for finance (B) = €9000

Interest Charge (C) = €1656
Document fee (D) = €75
Hire Purchase Price = A+C+D+E = 13781

Then in the Statutory notices there is the following points:
1) The hirer may put an end to this agreement by given notice of termination in writing to any person who is entitled to collect or retrive the hire/rent

2)The hirer must then
A) i) Pay any installements which are in arrears at time he gives notice and
ii) if when the hirer has paid these installments the total amount under the agreement is less than €6890 the hirer must also pay enough to make up that sum or..

(it goes on to say purchase the goods in full etc..)

On my HP agreement as of next week I will have €5383 paid just over €1500 short of the required figure!!


Anyway my stupid stupid story!!!

In stupid misjudgment in Aug 2008 I purchased a car (04 Ford Mondeo) on HP for my then boyfriend ( he couldn't get any finance). We split up in October, one payment down 48 more to go !!
Well after alot of arguing he has been paying up, but problem is after arising, he is after getting caught for the bag , TWICE!!! God only knows what his punishment will be but certainly a driving ban for a few years!!
Anyway the payments are starting to cease again, and I need to do something urgently, I can barely keep my head above water with my own financial commitments!
So have to work something out, I'm thinking I will get the car back from him and park up my own (08 ford Focus) until I have reached the half way point and save on wear and tear, tyres, servicing, milage, etc on my own for a few months and then hand back his car? It will be a very tough few months but hopefully I will manage!!

Any advice, open to all suggestions.
 
Hi there EOK56.
First things first - you are not in a very bad position - don't worry.
Second - it might help if you state which Finance Company you are dealing with - I am familiar with most of them, and how they operate in these situations.
Third - You're explanation of the figures doesn't quite add up ..
Cash Price 12000
Less Deposit/Trade in 3000
= Total amount for finance 9000
+ Charges 1656
+ Doc Fee 75
= 10,731
You quote a HP price of 13781 - you must have left something out ???

You are only obliged to pay up to the 1/2 HP price in any case , so I would suggest that the best course of action would be to pay (get your ex to pay ideally) the 1500 that will bring you up to that point. You can then hand the car back with no further liability , and with NO adverse effect on your own credit rating.
I don't think it's worth continuing with the agreement - the car is probably at best worth 4-5 k at present. If you hand the car back the Finance Co will sell to Trade for approx 3k.
If you've any other questions - post them and I'll see if I can answer.
 
Bazzer01 said:
Cash Price 12000
Less Deposit/Trade in 3000
= Total amount for finance 9000
+ Charges 1656
+ Doc Fee 75
= 10,731
You quote a HP price of 13781 - you must have left something out ???
Click to expand...

I think the OP is right with €13781 being cash price of €12K plus interest of €1656 + doc fee of €75 and I am assuming a final consideration charge of €50. That all adds up to €13781

I agree with Bazzer01 about paying the €1500 ASAP and handing the car back under the half rule. Would seem to be the most sensible thing to do.
 
I too am thinking of returning my car under the 'half rule'. Total finance is €42273.49 - total owing is €20927.92 as at yesterday.

My query is regarding the lender; I'm not certain that the type of finance I have is the right one to use the half rule with - it's thru AIB Finance and Leasing. At the top of the finance agreement it says 'Consumer variable rate credit agreement' and then underneath it says regulated by the Consumer Credit Act 1995. Nowhere on the document does it state the registration of the vehicle. In the terms and conditions it says this 'At any time before the date the loan should have been repaid, the Borrower may give notice to the Bank in writing terminating this agreement. On termination the Borrower must pay the Bank (subject to section 52 of the Consumer Credit Act 1995): (a) All intalment arrears due and payable up to the date of termination including any interest due on late repayments, (b) The balance of the loan then outstanding together with all accrued interest up to the date of payment. No arrears on the payments and no bounced payments either.

Nowhere does it mention 63 of the Consumer Credit Act 1995. Just don't want to look like an idiot by trying to evoke the half rule if its not applicable.

As an aside my friend tried to return her vehicle to Friends First using the half rule and they refused, so what does she do now?

Any advice would be greatly appreciated.
 
Hi ACA

Bad news. You have a personal loan, which you must repay. You don't have a HP agreement.

If it's a HP agreement, it would be clearly stated as such. Under a HP agreement, the bank owns the car until you buy it. That's why you can return it.

I suspect that your friend is the same.
 
Hi Brendan,

I have checked my hp agreement with ptsb and it has got a half rule clause. At this point I have paid 6000 more than the half way figure and owe 11000. My question is that I have a scrape on the bonnet of the car. Does this need to be repaired before handing back the car or is it covered by the 6000 extra I have already paid?
 
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