Understanding Vehicle Finance Agreements
We all know purchasing a car can be a huge financial investment, so auto financiers offer different financing options to help people buy a car they can afford. However, with vehicle finance comes an agreement to commit to the loan repayment period.
Vehicle finance is an agreement between the car purchaser and the financial institution, in which the customer agrees to pay an agreed-upon amount in a certain number of payments, usually over a period of either two or five years. This agreement is aimed at making car costs much more manageable and affordable.
The customer must accept the terms and conditions of the agreement before they sign the documents, and should always check with the finance provider before entering into a vehicle finance agreement. It is the responsibility of the customer to make any necessary changes to their contracts or to discuss any issues with the loan provider before signing anything. Generally, when agreements are signed, it means the customer has agreed to all its terms and conditions.
The Risks Of Defaulting On Payments
Missing payments or defaulting on your loan can be an expensive habit, and can have serious ramifications. Finance companies may take action if payments are not made on time, such as repossessing your vehicle. This means that the finance provider could seize your car if you’ve missed an agreed number of payments. In cases where the finance provider has taken possession of the car, you will likely still be liable for the remaining balance of the loan plus any associated costs associated with the repossession.
Other significant risks of not being able to make payments include a damaged credit score and possible legal action being taken against the customer by the finance provider. This will have serious long-term implications for your financial future. It’s for this reason that it is always important to contact your financing provider to work out a payment plan or to negotiate other repayment options if you find yourself in financial distress.
Can I Give Car Back To Finance Company?
The option of giving your car back to the finance company is known as returned goods. Returned goods can happen when customers can no longer make the payments on their loan due to financial problems, such as a job loss, relationship breakdown or medical expenses.
In this situation, customers can reach out to their loan provider to inform them of their current financial situation and ask if they can return the car and have the remaining payment amount waived. This can be a form of voluntary termination of the loan agreement.
However, the returned goods process is rarely straightforward and is at the discretion of the finance provider. In most cases, the finance provider will not accept returned goods unless the customer is in a very difficult financial situation. Additionally, the customer may be liable for early termination fees or other charges related to the loan agreement.
The Benefits of Returned Goods
The benefits of returned goods can be numerous if you find yourself in a serious financial situation. If a loan provider agrees to take the car back, this immediately relieves the customer of any long-term debt burden. This can save the customer time, money and a lot of worry, as they will no longer be obligated to make anymore payments and the debt will be considered settled. Additionally, customers can keep their credit rating intact, as they will not be listed as having defaulted on the loan.
Finally, if the customer chooses to return the car and all associated documents to the finance company, they may be eligible for an early buyout discount. This will depend on the terms of the loan agreement, but if applicable, the customer may pay a reduced amount to the financier in exchange for the car.
Are There Alternatives To Returned Goods?
Before opting for returned goods, there are some alternative options available for customers facing a difficult financial situation. Customers can reach out to the finance provider and renegotiate their payment plan, as loan providers are often open to negotiating terms in order to avoid defaulting. Additionally, if the customer is eligible, they can apply for hardship assistance or contact a financial advisor for further advice.
Alternatively, customers can explore further options from the finance provider such as extending the loan period, restructuring the loan, or increasing the regular repayment amount. If a customer chooses to go down this route, it’s important to ensure that they are comfortable with the restructured loan before agreeing to any new payment plan.
Final Thoughts
It’s essential to know your rights as a consumer when it comes to vehicle financing and to always read the terms and conditions of an agreement before signing. If you are in a difficult financial situation, the best approach is to contact your loan provider and explore what options are available to you. While returned goods may be a viable solution to financial distress, it’s important to analyze the risks and benefits before making any decisions.
