Settling Early on a Hire Purchase Agreement

There are hundreds of thousands of us struggling to meet high monthly payments on our car loans. Keeping up with the payments is difficult enough but what makes it worse for many of us is the reality that the car we're driving may only be worth a fraction of the finance owing on it.
Negative equity”, a phrase normally reserved for houses, is used to describe a situation where the owner of a financed asset owes more to the bank than the asset is actually worth. It's never a nice position to be in but at least with a house there's a chance that some time in the future it will regain its lost value. Not so with a car and recent changes to the way we tax our cars in this country have seriously devalued larger petrol cars hitting many of us very hard in the pocket.
The Half Rule could help save you thousandsHowever if your finance agreement was written up as something called a 'Hire Purchase Agreement' there may be a chink of light. Contained in the fine print of your agreement, there's a little known piece of consumer protection. It's called the 'Half Rule' and it could save you thousands!

The Half Rule

The 'Half Rule' is a piece of consumer legislation that entitles you to return your car to the bank who lent you the money if and when you have paid half the 'hire purchase' price.
Once returned under this rule your agreement will be ended and you will not be liable for any further payments or suffer any black marks on your credit rating.

Is the 'Half Rule' a viable option for you?

If you have decided that you no longer want (or need) your car the first thing to do is figure out is how much it's going to cost to return it.
To do this you'll need to know the original 'Hire Purchase' price of the car which will be on the HP Agreement you signed.
Work out how much it will cost firstIf you don't have a copy to hand you can get it from the bank by ringing their customer services department (you'll need the registration number of the car or the finance agreement number if you have it).
Once you have the 'Hire Purchase' amount simply divide it in two. This figure is the amount you must pay (or have paid) in order to return a vehicle under the 'Half Rule'.
After that figuring out if you qualify is easy. Simply multiply your monthly payment by the number of payments you've already made in total to the bank (remember to include any advance payments and documentation fees). If it's greater than half of the hire purchase price you qualify. If it's less – don't worry, you can still qualify but you'll need to make a single payment to the bank that brings you up to the half-way mark.

How do you return a car under the half rule?

The following tips from the National Consumer Agency are useful  and outline the steps you should take when returning under the half rule.

  1. Write to your car finance provider or bank, informing them you want to return the car using the half rule - use their sample letter to help you. Speaking to someone over the phone could be interpreted as a voluntary surrender whereas putting it in writing makes it very clear how you want to end the agreement.
  2. Agree a pick up point or return the car yourself. If you don’t you may be charged a collection fee.
  3. Take pictures of the car, inside and out, to confirm the condition of the car so you are not liable for any additional costs if the car gets damaged after your return it. If there are damages to the car, you may want to get the repairs done by your own mechanic before you send it back or your provider may charge you for the cost of any repairs.
  4. It is very important to read any documentation sent out by your car finance company when you return your car using the half rule. Do not sign a voluntary surrender form as you will give up your right to return the car under the half rule.
  5. Return the car to the garage or to whatever location is agreed between you and the finance company.

It's really important that you follow the process laid out above. You don't want to be confused as someone making a 'Voluntary Surrender' as this type of termination means you will still be liable for the balance due on the agreement. I'd highly recommend checking out the stories of people who have already returned their cars and written about their experiences on boards.ie.

Top Tip

Be sure that the value of your car is less than the amount owed in finance. You can check this by getting a Motorcheck valuation report on Motorcheck.ie. If it's worth more than what's owed just sell it and settle the finance with the proceeds.
But if it's worth less than what you owe and if you've paid more than half of your hire purchase price and feel that you would be better off without your car and free from finance – the 'Half Rule' could be just what you're looking for.
If you have a question about the 'Half Rule' feel free to leave a comment on our blog at www.motorcheck.ie/ blog.

Mr S Hayden - January 11, 2011 at 2:00 pm
My father died a month ago and left behind a car he had taken bought on hire purchase with credit opel - Permanent TSB 2 years ago The hp cash price was 18000, he part exchanged and paid cash to the value of 9000 & 12 months ago started to pay 260 euros /month over 36 installments. Can we contact the hire purchase company and enforce the half rule? Waiting for probate will take some time and we are afraid to contact the hire purchase company in case they just repossess the car and we are liable for the outstanding 8500 euro debt. Please help!!
Shane Teskey - January 12, 2011 at 10:01 am
Hi there, Sorry to hear about your Dad. In theory I would say yes you could enforce the half rule but you would need to ensure that the original HP price mentioned is the HP price and NOT the cash price - there can be a big difference between the two. Also if your Dad paid roughly 50% up front (trade in or cash) perhaps the car is worth more than the half rule? In which case you could just sell it and pay off the outstanding loan and keep any balance. I suggest you call the bank and ask for a settlement figure first and then get a trade value before invoking the half rule (if you've already done that and the settlement is €8500 all they have to do is get a value on it - sounds like you might be okay - subject to what it is!) If you'd like to get a cash offer for the car I recommend filling in the form here. Mooneys are based on the long mile road and are always looking for good quality used cars.
Joan F - July 07, 2011 at 12:27 pm
Hi, I'm hoping you may be able to help. My Dad purchased a van under a finance lease with his bank, I understand that most leases are usually for a company or business so they cannot be terminated under the half rule. My Dad leased this van in his own name as he is not in business, does not own his own company of any sort. Is there a way he can terminate this agreement using the half rule?
Shane Teskey - July 28, 2011 at 12:37 pm
Hi Joan, You're correct in that finance leases are normally reserved for companies / sole traders as it allows for the reclaim of VAT on the monthly rental. Something any VAT registered business would want to do on a commercial vehicle. Are you positive your Dad's agreement was drawn up on a finance lease? If it's a 'Hire Purchase' agreement then he would be entitled to terminate under the half rule. Have you tried calling the bank to confirm? If they confirm it's a finance lease I'd ask them why they thought this was the best agreement for your Dad at the time and how he was able to avail of it in a private capacity.
John - January 13, 2011 at 9:54 pm
Hi Shane Well done, very solid advice which hopefully works out for Mr. Hayden! Best regards John
Ray - January 20, 2011 at 11:23 am
Hi Shane, I'm a little confused regarding the Hire Purchase Price and the actual value of the loan. On my HP Agreement the value of the car I bought at the time was €24,000, interest €5,000 therefore the HP Price is €29,000. I traded in a car as well which had a value of €9,000. Should the HP Price not be €20,000 (€20,000 - €9,000) as this was the total value of the loan? Kind regards, Ray
John Burke - January 21, 2011 at 8:26 pm
Hi Shane, I wonder if you could help answer a question for me, i'm have to move over sea's for work and am going to use the half year rule on my 07 car, i have just over half the hire purchase pay'd off so i'm fine there. My problem is mileage. I have 160k km or 100k in miles on the clock. Will I have to pay a penalty on that amount of mileage? There's nothing on the 'HPA' about excessive mileage or if i will have to pay extra, where do i stand on that one? Regards, John
Shane Teskey - January 25, 2011 at 9:54 am
Hi John, Thanks for your question. The good news is that unlike personal contract hire / personal contract purchase contracts hire purchase agreements do not have a mileage clause on them and you should be fine. As long as the car doesn't have anything other than 'fair wear and tear' on it you are entitled to hand it back and discharge your finance obligations. Just remember to be clear that you're returning it under the half rule. Don't sign anything that looks like a 'voluntary surrender' form. Hope this helps! Shane.
ADIL - January 29, 2011 at 11:08 pm
hi dear, i have HP agreement with GE MONEY want to use half rule but i am wondering that if i give them back car as half rule,would it affect on my credit rating or credit history or would i have difficulty to get any loan,mortgage approval in future. Also i got 22256 in total and pay them to Ge Money 11946 which is more then half price and balance left 10310.As i pay to Ge money 818 more so will i get refund from finanance company.your help would be appriciated.thanks
mick - February 01, 2011 at 6:59 pm
Hi Shane, I have a van on lease purchase and just wanted rid of. The van is possibly worth the same as the settlement figure or maybe a bit more. Rather than go through the hassle I decided to invoke the half rule and rang the finance crowd. They were quick to inform me that I had a NON CONSUMER finance lease agreement which wasnt covered by the half rule!!!. I've studied the agreement which doesn't mention these words anywhere but it does state that the agreement is governed under irish law. Do you think Im being fobbed off? Thanks, Mick
Shane Teskey - February 03, 2011 at 10:33 pm
Hi Mick, If you leased the van in your business name it's likely that you don't have a hire purchase agreement. I'd be inclined to believe it's a lease agreement that unfortunately is not covered by the half rule. Sorry to be the bearer of bad news! Shane.
francie - February 02, 2011 at 3:46 pm
Hi Shane, I have recently been in touch with my hp company, Permanent TSB about the half year rule. I have sent the letter terminating the contract as I have paid more than half the hp price, however they say I must pay a one off payment of €2,000 which is the interest left on the reminder of the loan. Is this the normal procedure? Regards Francie
Shane Teskey - February 02, 2011 at 9:39 pm
Hi Francie, If you're terminating under the half rule and have already paid more than half of the hire purchase price you shouldn't have to make any further payments. Do you have a copy of the request in writing? I'd recommend contacting the National Consumer Agency on 1890 432 432 before doing anything. Please let us know how you get on. All the best, Shane.
mick - February 05, 2011 at 10:09 pm
Many thanks for your input Shane. I was never the luckiest bloke on the planet but would've loved to be rid of this particular shower as they are not very customer friendly however as I said I think the van is worth slightly more than is owed so maybe I still might be able to escape this shower.!!!!!!!!!!,
Shane Teskey - February 10, 2011 at 6:37 pm
Best of luck Mick!
ADIL - February 07, 2011 at 10:18 pm
Hi Dear, I have a HP agreement with GE MONEY want to use half rule but I am wondering that if I give them back car under this clause would it affect on my credit rating or credit history or would i have difficulty to get any loan mortgage approval in future? Also I financed €22,256 in total and have already paid Ge Money €11,946 which is more then half leaving a balance of €10,310. As I've paid Ge money €818 more do you think I could get a refund from them? Your help would be appreciated. Thanks Adil.
Shane Teskey - February 09, 2011 at 9:24 am
Hi Adil, If you return your car under the half rule your credit rating will note be affected. This is a contractual right that you have as a consumer. One thing I'd check though is that you have actually paid more than the hire purchase price (not the amount you financed). The HP value includes the finance due as well as documentation fees and will be detailed on your original agreement. Regarding the refund I'm afraid you're out of luck there :(. All the best, Shane.
ADIL - February 10, 2011 at 6:25 pm
Hi Shane, Hi Mick, Thanks for reply me back. i got call from GE MONEY today that accessor will come next week to access the car first and if there is any damage on car i have to pay.so far there is no damage or accident yet.also when GE MONEY will get accessor report then they will let me know that i need to drop the car to merlin car auction in Naas.i am bit confused now.
ADIL - February 12, 2011 at 11:10 pm
hi Shane, thanks very much for reply me back.i got phone call from GE Money and they want to send accessor next week at my home address to access the car if there is any damage and i am bit confused that is it standard procedure when i am returning a car using half rule or they tryiing to play the game with me. Also Ge Money mention me on the phone that i want to do voluntery surrender my car. if someone help me in this matter will be very thankful.
ADIL - March 03, 2011 at 11:18 am
hi shane, After all i handed back car to garage last week where decided with Ge money and got letter today in post from finance company stating that i am cleared of all liability under the agreement number given. So is that is enough for me as a proof or do i have to get some thing else more. please advice me,would be appriciated. thanks very much.
mick - February 09, 2011 at 9:37 pm
Hi again, I was very lucky this week and just sold my van for slightly more than was due and am now in the process of getting rid of the finance company GE MONEY. I would advise anyone dealing with this company to be on their guard as I found them outright abnoxious and impossible to talk to. I will run a mile before I do business with them in the future!!!!!!!
ADIL - February 10, 2011 at 6:23 pm
Hi Mick, Thanks for reply me back. so you mean did you give them back a car using a half rule to GE MONEY recently because i got call from them today that accessor will come next week to access the car first and if there is any damage on car i have to pay.so far there is no damage or accident yet.also when GE MONEY will get accessor report then they will let me know that i need to drop the car to merlin car auction in Naas.i am bit confused now.
Keith - February 09, 2011 at 11:12 pm
Hi Shane, Just wondering if you could help me out. I have HP on a car and am wondering is the half rule on the total finance including interest. Or is it on the money you borrowed for the car. E.G. Needed to finance €25k and overall repayments are working out at €32K. Is the half rule on the €32k or the €25k. Thanks Shane, Keith
Keith - February 09, 2011 at 11:26 pm
Hi Shane, Just say if I lowered my repayments on my HP agreement for 3-4 months and then went back to pay the original payments, will this affect my right to invoke the "half rule" even though I never missed a payment. Thanks again. Keith.
mick - February 13, 2011 at 5:14 pm
Sorry Adil, Im just back from a break and noticed your post. Im afraid I would not be of a help to you as I sold my van privately and am now going to pay the settlement, as Shane had confirmed to me that a commercial vehicle wasnt covered under the half rule. All I can say is that this particular company are a nightmare to deal with and compassion is not anywhere to be found in their dictionary!!!!. Whether theyd want me back or not in the future as a customer, I can assure you it wont happen!!!!!!!. Take care and best of luck
seamus - February 23, 2011 at 8:28 pm
hi shane, i have a van on a business hire purchase agreement from bank of ireland, i have well over half the money paid back, i sent them the letter telling them i wanted to return the van through the half rule but got a phone call from them telling me that it does'nt apply to a business hp and i would have to surrender the van to them and pay back the remainder of what was left after they sold it. Are they telling me the truth that it does'nt apply to a business hp agreement.
Mick - March 03, 2011 at 6:44 pm
hiya i need some advice, i took out a hp agreement in 2007 on a 5 year agreement endin 2012. i think i have paid over half but because i had an outstanding balance from the car i part exchanged would this affect the half way rule? also i now have negative equity because of this. can you help
Brendan - March 08, 2011 at 8:41 pm
Hi, I'm in serious money problems, my only way out is to return my vehicle under the half rule this would make a massive difference to my situation. However during the course of the HP i had the payments reschduled which decreased the monthly repayments, but I have still reached the half way mark. The bank TSB are giving me a real hard time, as in they don't want to take back the vehicle, they keep putting obstacles in the way. If i hand it back do I pay the contractual amount, the amount I would have paid if I had not reschduled the previous payments, Can they refuse to take back vehicle if I cannot pay for excess milage and wear and tear etc. Advice much sought Stressed out person
ADIL - March 11, 2011 at 10:57 pm
After all i handed back car to garage last week where decided with Ge money and got letter today in post from finance company stating that i am cleared of all liability under the agreement number given. So is that is enough for me as a proof or do i have to get some thing else more. please advice me,would be appriciated. thanks very much.
Sanda - March 31, 2011 at 8:07 pm
Hi, We have a finance with GE money, and we did send a letter to them saying that we want to use the half rule. After 2 weeks an assessor came (this was last Thursday). We got yesterday a letter from GE Money saying that the repairs on the car will cost 1,772 euros, and because the car was second hand we actually owe them 886 euro. Most of this amount represents the painting for car. The car in fact is more than fine, I would say normal wear and tear. This car has a market value of 3,500 euros, so I cant believe that they will pay repairs of 1,772 plus VAT for this car? I don't want to be rude, but my husband said that the assessor was kind of mean, but the problem is now that we do feel that they are trying to get more money from us, and they said on the phone today that this amount is not negotiable. I did a letter for them which I will post it tomorrow, and we'll see what will happen. Any advise please? Kind regards, Sanda
Shane Teskey - April 05, 2011 at 11:33 am
Hi Sandra, I'd advise having a second inspection done by an assessor of your own. Ask him his expert opinion on whether the condition of the car meets what would be expected under fair wear and tear for a car of the age and mileage. If the report backs up your opinion I'd simply write to GE, furnish them with a copy of your inspection and give them details of where and when the car is to be collected. Let us know how things work out for you.
Mick - April 11, 2011 at 12:10 pm
hiya i have a car on finance that will end next july 2012. there is currently more owing on the finance than wot the car is worth. will this affect using the half rule? it was a 5 year finance plan so i am more than half way through
michael - April 21, 2011 at 6:20 pm
Tried to give back my car under the half rule cos i had over 9,000 paid on a 16,000 finance. But because i rescheduled my payments they extended the term by a couple of months. Now they say i am over 1700 in arrears. They are making up how much i should have had paid in by the date i decided to return it. Is this right because by paying this amount i will have over 10 nearly 11000 paid. i also have the assessor fees to be added onto this
Marion Russell - April 23, 2011 at 10:06 am
Hi, I have finance on a 05 Renault Megane which at the time of purchase (3 yrs ago) was a bit more than 14000. I had been driving a fiat panda and had passed my driving test so I wanted to treat myself to a bigger car. When I traded in the fiat panda to get the megane the garage added the finance settlement of the panda onto my agreement for the megane so I then owed a bit more than 19000. I recently made a phone call to get the settlement price for the megane (I have since had another child and would like to get a 7 seater) and found out there is 8,400 left at 310 per month. So after 27 payments I have paid half the hire-purchase and the car is definitely worth less so my query is - if I use half-rule to give back the megane will I be able to get finance again for the 7 seater or will there be hassle in trying to get finance again? I have seen a 08 7 seater for 8000 so I cannot justify paying the same amount for the megane when in the same amount of time I could own a 08 7 seater which I need. Thank You in advance for any advice, Marion.
Shane Teskey - July 28, 2011 at 12:53 pm
Hi Marion, For some reason your comment slipped though the net here and I apologies for not replying earlier. Officially terminating an agreement under the half rule doesn't effect your credit rating. Whether or not the finance house takes this into consideration when looking at a future application is difficult to know. Did you have any success?
gary - June 08, 2011 at 5:30 pm
Hi, I have a car loan with Bank of Scotland Ireland who have left the market and I feel they have broken there contract with me.a Any advice on where I stand with this?
Shane Teskey - July 28, 2011 at 12:44 pm
Hi Gary, Bank of Scotland Ireland have left the Irish market but they continue to service existing customers through a third party. I don't see how they could have broken their contract with you. They did after all lend you the money, right?
Gavin - June 21, 2011 at 12:05 pm
Hi Shane, Just a quick question about what effect would ending my HP with PTSB have on the credit rating of a guarantor who co signed the agreement? Also, could PTSB pursue the guarantor for the remaining finance?
Shane Teskey - June 24, 2011 at 7:41 pm
Hi Gavin, When you say 'ending your HP' do you mean ending it under the half rule? If so, then you don't have to worry as this is your legal right and the bank don't have any reason to come after you or a guarantor. If however you're thinking of a 'voluntary surrender' then this is very different and yes, the bank could come after you or the guarantor to recoup any finance outstanding after the car was sold at auction.
Gavin - July 28, 2011 at 12:30 pm
Thanks Shane. It is indeed under the half rule. Thanks for your help
Finola - July 22, 2011 at 12:54 pm
Hi Shane, My husband has a HP agreement on which he owes just over 50%. His business is gone and he cann't afford the repayments. He is in arrears on the agreement. He rang this morning to enquire about the 50% rule and was told that (rather coincidentally) the debt had just been written off yesterday, therefore his entitlement to the 50% rule is negated and he can voluntarily return the car but will be liable for the debt. This seems very suspect to me- I'd really appreciate your comments. Regards, Finola
Shane Teskey - July 28, 2011 at 12:29 pm
Hi Finola, Hmmmm. Very strange. I'm surprised that any finance house would 'write off' a debt without seeking to repossess the car first. It's only after a car is repossessed and subsequently sold at auction that the liability can be correctly identified. If your husband still has the car I would suggest that he proceed with the termination letter anyway and see what the official response is. It might be different in light of yesterday's court judgement. Let me know how you get on!
boris - July 24, 2011 at 9:49 am
Hi Shane, I am in the process of returning my car - which was leased under BOI leasing. I see from your letter that I ask them to confirm where they would like the car returned to. I have well paid over the half way figure so I should be fine from that point of view. I have checked the contract and I have paid more then the half way figure quoted there. I see that you mention that there is an allowance for Fair Wear and Tear. The car is in almost perfect condition - reasonbale low KMs - 63k for a 2007 car. It has a full service history and the interior is pretty well maintained. The only issue I have is there is the slightest ding in one of the doors. It is about the size of a 50 cent coin - there is no paint damage or anything just a mark where someone banged their car door off my door. Would you recommend getting this fixed before returning ? I have previously been recommended not to fix it as it was so small people might think that the damage was worse then it actually was. Best to give the car a good valet before returning as well ? Thanks for any help !! Boris
Shane Teskey - July 28, 2011 at 12:25 pm
Hi Boris, Without seeing the ding it can be hard to say but to be on the safe side I would recommend having it repaired. One of the 'dentmaster' mobile units should be able to fix it very quickly for you at a relatively low cost and it could save you some hassle further down the line. Be sure to take plenty of pictures of the car before you hand it back so you have proof of its condition.
boris - July 28, 2011 at 12:32 pm
Hi Shane Many thanks - I am based in the west of ireland so I assume that they service this side of the country as well ? autodents.ie is it ? Cheers Boris
Boris - August 09, 2011 at 3:20 pm
How long does it normally take for a leasing company - Bank of Ireland Leasing in this instance to contact you once you send the template letter you ? Any help here is greatly appreciated. Boris
Tess - July 27, 2011 at 3:24 pm
Hi there, I have an 07 car on purchase with PTSB on what I believe is hire purchase. When I rang them today to get a statement as proof I have paid over half the HP she said I did not have hire purchase but Motor Rental Purchase. This is written on the front of my contract but where I signed it says 'Total Hire Purchase Price'. There is also a section under Statutory Notice which states "The hirer may put end to this agreement by giving notice of termination in writing to any person who is entitled to collect or receive the hire-rent. The hirer must either pay installments in arrears and when the Hirer has paid those installments, the total ammount is less than 14700.00, the Hirer must also pay enough to make up that sum........" I have apid aprox 1500 euro over the half way point. I felt she was trying to put me off trying to use the half paid rule but was wondering who is right?
Shane Teskey - July 28, 2011 at 12:21 pm
Hi Tess, That's an interesting question. I haven't heard of a 'Motor Rental Purchase' agreement before. There are only three types of finance options for buying a car; Consumer Hire Hire Purchase Personal Loan Consumer hire is similar to leasing in that you will not own the car at the end of the agreement. However, your agreement may have a clause that allows you to buy the car from the leasing company at the end of the term, for an agreed amount. Was this mentioned when you bought it? The half rule isn't applicable to a consumer hire agreement. Does it mention the half or third rule on it? The fact that you thought you were on a hire purchase agreement means that you may have been mis-sold something when you signed the agreement. Was it carefully explained to you when you bought the car?
Motorcheck Blog· hire-purchase-ruling - July 28, 2011 at 9:43 am
[...] to terminate their hire purchase agreements but don’t expect to get away scot free!In a previous article Motorcheck outlined the possibility of terminating a hire purchase agreement under the ‘half [...]
Shane Teskey - July 28, 2011 at 12:23 pm
You may be interested in today's article that examines a ruling by the hire court yesterday against GE Money. It involves the half rule https://www.motorcheck.ie/blog/court-rules-on-side-of-consumer-against-ge-money/
Tess - July 28, 2011 at 9:43 pm
OK.. so this contract is confusing me a bit! but looking carefully it says 'Consumer Hire Purchase Agreement'. It goes on to say " This is a hire purchase agreement with Permanent tsb......" in the part under Statutory Notice it has in VERY SMALL writing "here insert 1/2 hire purchase price" which is there. However on the back under Terms and Conditions it states..." The owner is letting and the Hirer is taking on hire the Goods described in the scedule. Once the rental payments have been discharged the hirer shall purchase the goods by payment of the completion payment and upon such payment title to the goods will pass to the Hirer".... If this is the case its the first time I have heard I had to make a final payment. Now I'm worried...
Shane Teskey - July 28, 2011 at 10:16 pm
HI Tess, No need to be worried. The face that it says 'Consumer Hire Purchase' is enough and confirms that it is a hire purchase agreement. The mention of the final payment is normal. Sometimes a hire purchase can carry a balloon payment but more often than not it's the same as your monthly amount - it just happens to be the last one. From what you've told me so far I don't think you should have any trouble qualifying for the half rule. If I were you I'd send the termination letter as outlined above and see what happens. Will you let us know how you get on? Shane.
Tess - July 28, 2011 at 10:40 pm
They make things so confusing! well the car is going to the garage next week to get a few things sorted as it has the NCT in 2 weeks. At least if it has that I know its in good mechanical order. Im going to get it valeted and a few scrapes patched up then send the letter. Ill keep you posted on the progress. Thanks you so much for all your help.
Shane Teskey - July 28, 2011 at 10:44 pm
No problem Tess. That's what I'm here for. S.
Donna Bolger - August 03, 2011 at 8:46 pm
Hi Shane My husband bought a jeep this time 3 years ago. In the garage where he traded in his other jeep for his new one the motor plan he signed was a non consumer hire purchase Business users. Firstly my husband doesn't have his own business, he was employed as a carpenter, that's it, and lost his job in 2009. When we phoned the PTSB to try arrange a lower payment they arranged for 6 months to reduce it. When that ran out we phoned again and they arranged it for more than the last 6months but less than the original payment that 6 months is just up and my husband has paid over half and when we tried to give back the jeep we were told that we couldn't. When we questioned why he was put on the plan as he was just a worker for someone else they said it was because he had a jeep before and that was would have been using it for work and carrying tools. This was never explained to us when we were buying this jeep or the jeep he had before this. Is there anything we can do as we can't make the repayments and we dont have the €15000 that they are looking for if we hand back the jeep?
adrian - August 08, 2011 at 3:12 pm
Hi Shane, i have a comm jeep. The payments are very high. I am with ge money does the half rule apply? Thanks shane.
Shane Teskey - August 16, 2011 at 7:23 am
Hi Adrian, I would assume as a commercial user that your 4x4 is used for business purposes? You need to pull out the original finance agreement and determine whether its a 'Consumer Hire' or a 'Business Hire' agreement. If it's consumer hire then you would be entitled to terminate your agreement under the half rule. Hope this helps, Shane
Lisa Connolly - August 17, 2011 at 7:28 pm
I purchased my car in February 2009 and got a 5 year finance on it. My hours in work have been cut and its a struggle with the monthly repayments (i also contacted the finance company to see if my payments could be reduced per month and got turned down). The total cost of my repayment is €11,500 on a 2006 renault clio sport. I have half the price paid off and was wondering if i wanted to downgrade to a car i seen in the same garage i purchased the car what could i do, the value of the other car is €4,995.
Mont - September 07, 2011 at 9:20 am
Hi Shane, I have read a lot of the previous comments and want to share my scenario. The 2009 car I purchased had a cost of c€43k of which I took the 50/50 offer on, which left me with c€21.5k finance (now around €19k). My 50% was made up of 2008 car trade in plus cash. The repayments commenced in January 2011 and are up to date. I have been unable to sell the car for the past year now to attempt to clear the finance. Opel advise there cash trade value for the car to be around €11k - A massive €32k drop in value in 2 years. To meet the half rule I assume I need cash upfront of around €9k I dont see the benefit in this, as I should be getting more value for my car, however as the market is telling me there is not much take up, having already brought the sale offer price down to €15,000. My instinct is to seek voluntary settlement and see if they will settle for some of the balance rather than full balance under a write off agreement rather than full court judgment (noting write off can be recorded on the credit bureau), but less concern to me than a judgement. So my question is has anyone agreed / had similar success in settling with PTSB any outstanding balance after the car has been given back on a voluntary settlement basis.
Darach - September 12, 2011 at 4:46 pm
Hello Shane, Question about half rule on a hire purchse agreement with my car. I have paid about 75% of the loan back at this stage. The car would be worth more than the balance of the loan. If I did exercise the right to return the car at thus stage, would I get the amount I paid beyond 50% of the loan as well. Car purchase for 35,000euro. Half way point on agreement is 19791euro Balance on the loan outstanding is 5000euro Car value current market 16000euro Thanks
Laura - September 14, 2011 at 11:39 am
Hi, Im hoping to return my car under the half rule, its had an oil leak since the day i got it. Axa cars sourced it for me as my previous car was wrote off by an axa member. I did enquire about having it fixed, but the mechanic said It was a very big job for a tiny leak, its some seal & so long as I check the oil regularly it wouldnt cause any problems. SO, should I have it fixed before I give it back?
michelle - September 30, 2011 at 5:55 pm
Hi shane We are considering returning our car under half rule. Will this affect a mortgage application at the same financial institution? Michelle
michelle - September 30, 2011 at 6:00 pm
Hi shane We are considering terminating car finance using half rule. Will this affect a mortgage application at same financial institution? Many thanks, Michelle
catherine - October 05, 2011 at 4:27 pm
looking for some advice my husband bought a ford transit from new 2007 at @ 25,000 his business went and he is in arrears. he owes 6,700 in total 3,200 of this is arrears. yesterday we paid 1,000 of it as we were due money from another source today they have sent a letter terminating his contract and want the arrears and they will see what we still owe if they manage to sell it. this van is four years old and yet we have spent nearly 10,000 on mechanical problems repairing it since new hence the reason we were often late with payments. can they just take his van its our only mode of transport.
Kevin - October 11, 2011 at 1:54 pm
Hi , my wife has an 07 Opel astra on HP and she has paid over half o the total agreement , however there are some arrears outstanding , I was wondering do the arrears have to be paid before the half rule can be used ? Thank you
tom - October 16, 2012 at 2:10 pm
Hi, I returned my car under the half rule a year ago now. No problems in doing it. recently got my credit report and though it said i was the loan was complete it still shows an outstanding balance. Is this correct?
John - November 06, 2012 at 11:26 pm
Hi Shane, We bought a car in 2008 which cost 34500 new and the payments at the time were 643 for first 2 years which we negotiated a new payment structure of 432 per month due to the downturn in the economy. We have never missed any payments but the vehicle will be 5 years old and does not meet the requirements of a family car now as it is a 2 door car. My question is will the PTSB take this vehicle back on the half rule or do you think they will exchange it for another car that they would have in there car lots with us paying or refinancing the car loan , if a car is more expensive or by increasing the loan. Thank You for your time it will be appreciated as I dont know what is the best option to leave it back or try and get another car from them if you can give me your advice. Thanks Shane
Shane Teskey - November 06, 2012 at 11:33 pm
Hi John, Do you have a copy of the original (and subsequently modified) HP agreement that you signed? If your payments to date exceed half of the hire purchase price then you are entitled to hand the car back under the half rule. Just be sure to follow my recommendations above and don't in any circumstances sign a voluntary surrender form. The bank cannot force you to take a different car and I'd be very surprised if they tried! Hope this helps.
gertie - November 10, 2012 at 10:08 pm
hi can you help please my father in law died recently an had vehicle on hp car was returned to hp company who sold it at auction for 1900 pound we has since recieved a letter from hp company looking my mother in law (who didn't sign a agreement) to pay a further 1300 pound should she have to pay her husband's hp as car is sold?
Nick - January 09, 2013 at 2:11 pm
Hi, I have a BMW that i want to return on the 50 rule, When you mention the hire purchase price. Is that the price of the car plus the Interest or just the price of the car. My example is i am 4 months shy of the half way point the car was 20k and then interesst ontop of that to. what figure should i use as i ahve paid in and around 10k Nick