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Handing car back, credit black list ?
My wife and I bought a new car 2 1/2 years ago, and on the advice of the salesman, put a £99 deposit down and took the car over 5 years finance. The reason being that after 2 1/2 years we would have paid more than 50% of the car, and therefor hand the car back.
My thoughts now are, what will this do to my credit rating, which is flawless ?
My thoughts now are, what will this do to my credit rating, which is flawless ?
If you can't say something nice - SHUT UP 
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Comments
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There's some very useful information here. Scroll down to the part headed "You end the Agreement?" and example of the calculation. There's advice on how to do this and a template letter.
http://www.nationaldebtline.co.uk/england_factsheets/factsheet_16.php3#5
HTHWarning ..... I'm a peri-menopausal axe-wielding maniac
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Do you mean return the keys and just leave the car to the garage? If so go round a few garages and find how much they will give you for it in cash - then pay off the loan and keep the surplus(if any).
If I have read your first post correctly handing the keys back means you have paid for 2.5 years and have nothing to show for it
Eric0 -
My understanding of these deals is that you can just hand the car back and it will not affect your credit rating.
Was that what the salesman told you when you bought the car? That you could hand it back after 2 and a half years if you wished?
If so, it will not affect your credit rating.I'm married now! Yippee!0 -
ejones
The point is that some cars aren't worth half what you paid for them after 2.5 years - but you've only paid half the cost (plus interest of course).
So the outstanding debt (including interest) is more than the car is worth.
So if you hand the car back as is permitted under the Consumer Credit Act on HP agreements, you get rid of your old car and effectively save money.
Yes, you have nothing to show for it. But in fact, you had less than nothing to show for it if you kept the car (worth say £5,000) and the loan repayments (of say £6,000). (Figures based on car costing £10k up-front but total loan repayments of £12k and completely unrealistic interest allocation basis!).0 -
I did this on a V6 Vectra that I bought on one of these pay a large final lump sum schemes. Handed the car back at the end of the 4 year period and it was only worth 1/2 of the final payment that was requested. Dealers just laughed when I said what was needed to clear the car!
No damage to my credit rating whatsoever.0 -
I have also done this.
Bought a £6000 Escort with a 5 year hire purchase agreement.
When I changed my car after 3 years I was offered £2200 part/x, I still owed the finance company a little over 3K.
So I just handed the keys back to the original garage with no hassle's and no credit rating damage.0
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