So, you’re in the midst of a car finance agreement, but you have decided that you want to leave it for reasons that are beyond your control. Problem is, you’ve signed up to a long-term deal, meaning that technically you will have to grin and bear it until the agreement comes to an end, which could be several years off. But that’s not necessarily the case; you do have the option to get out of a car finance agreement by using what is known as voluntary termination, and here we will explain this in further detail.
A voluntary termination clause is always included within a car finance agreement to protect the rights of the consumer. It is there to allow the customer to walk away under certain (not all) circumstances. Perhaps you have lost your job, which has severely affected your income. Maybe you have suffered an injury or illness that suddenly prevents you from driving. Or possibly something else changes within your life which means that you are no longer able to keep up with the monthly payments of your vehicle, or where doing so becomes pointless.
Obviously, if this happens early on in an agreement, this can place great strain on the customer. Even if it happens in the final few months, they will rightly ask themselves what they can do. Bear in mind that while an agreement requires monthly payments of a set amount, when the money runs out or when the car goes from a vital tool to a glorified ornament due to the customer no longer being able to drive it, what else can they do? Assuming that they are honest and can plausibly prove their change in circumstances, then the client will be eligible to attempt a voluntary termination from the agreement.
Of course, this will have an impact upon the dealer, especially if it happens early on. Generally speaking, the customer is required to pay 50% of the total amount to leave the plan earlier than expected. If it is later in the process, then it will be 50% of whatever payments remain. Assuming that you are leaving for financial reasons, this might seem more trouble than it’s worth, but a bank loan could help with this, because that way you no longer have to worry about the agreement, instead taking steps to eventually repay the loan. This is all designed to ensure that the dealer isn’t impacted too severely (imagine how many clients would do this if the legal system allowed them to do so, which on a large scale could cause tremendous problems for the company). Of course, doing so might make future car finance agreements difficult to instigate, especially with the same dealer, but if your circumstances dramatically change, what other choice do you have?
You can read more about voluntary termination by checking some of our previous articles on our news pages here.