Car Finance

seanavfc92 · 31 July 2014 at 8:24PM

Maybe I've got no chance of doing this, but I'll ask anyway...

Is there anyway of reducing the monthly payments on car finance?

I'm just over a year into my 5 year contract with Moto Novo Finance.

I'm paying £157.74 per month, of which £143.40 is the actual car repayment, and the other £14.34 consists of unemployment insurance, accident & sickness insurance and life insurance.

My interest rate is 7.50% per annum, and I have £7035 left to pay as of tomorrow.

Is it possible to change finance companies in the hope of reducing my monthly payments?

forgotmyname · 31 July 2014 at 8:31PM

You can get a personal loan elsewhere and pay it off in full. But will you be able to get a loan at a better rate?

You need the settlement figure. And it may not reduce the payment by much at all.

Cancel the extra insurance if you feel you wont need it? But it maybe a package so you need to ask and check the terms.

seanavfc92 · 31 July 2014 at 8:38PM

forgotmyname wrote: »

You can get a personal loan elsewhere and pay it off in full. But will you be able to get a loan at a better rate?

You need the settlement figure. And it may not reduce the payment by much at all.

Cancel the extra insurance if you feel you wont need it? But it maybe a package so you need to ask and check the terms.

My settlement figure is £5535.

It's extremely unlikely I'll find a better rate for a personal loan as my credit score wouldn't allow it as far as I'm aware!

Powered_By_Pies · 31 July 2014 at 10:17PM

You might have to ride it out I'm afraid. Car finance from what I experienced is fixed - once the monthly amount is calculated, it can't be altered after the cooling off period, and if it can, then chances are you'd be paying more off in additional interest than the actual capital of the car, so it becomes unfeasible.

I just finished 4 years with Volkswagen finance - it feels like an aeon once you start but it's surprising how quickly you reach that final payment, and you'll soon learn to budget around that necessary expenditure - of all the debts I've had over the years, car finance was one I never missed a payment on, because I knew they could take the car away if I did.

harveybobbles · 1 August 2014 at 12:53PM

Idid your paperwork out - is it actually HP or a loan?

National_Debtline · 1 August 2014 at 1:20PM

harveybobbles wrote: »

Idid your paperwork out - is it actually HP or a loan?

Hi there,

This is a really important question. Please do let us know. To answer your question, there are ways and processes which *may* allow you to reduce the amount you pay on either type of finance. Once you've found the paperwork please come back and we can let you know your options.

Best wishes,

David @ National Debtline.

seanavfc92 · 1 August 2014 at 7:43PM

National_Debtline wrote: »

Hi there,

This is a really important question. Please do let us know. To answer your question, there are ways and processes which *may* allow you to reduce the amount you pay on either type of finance. Once you've found the paperwork please come back and we can let you know your options.

Best wishes,

David @ National Debtline.

Thanks for your reply.

I have a Statement of Account for my first year with them.

Underneath that it says "Hire Purchase agreement number", so would assume it's HP?

seanavfc92 · 2 August 2014 at 9:16PM

Apologies for the bump, just wanted to see if there was any other advice :A

tlc678910 · 3 August 2014 at 1:16AM

If you need to reduce your outgoings could you sell your car and settle the finance? (please ignore this if you don't need to reduce your outgoings and just want a better deal).

If you would then need money for a cheaper car of 1-2k perhaps you could use a 0% purchase credit card if you have reasonable credit to get one and buy the car from a garage, or use an existing credit card and balance transfer. Paying around your current level it should be possible to clear it within the 0% period if you get 12-18 months on purchases. If you need to pay less each month and have good credit you should be able to juggle what is left to another card.

Good luck with finding something that works for you.

seanavfc92 · 4 August 2014 at 7:26PM

tlc678910 wrote: »

If you need to reduce your outgoings could you sell your car and settle the finance? (please ignore this if you don't need to reduce your outgoings and just want a better deal).

If you would then need money for a cheaper car of 1-2k perhaps you could use a 0% purchase credit card if you have reasonable credit to get one and buy the car from a garage, or use an existing credit card and balance transfer. Paying around your current level it should be possible to clear it within the 0% period if you get 12-18 months on purchases. If you need to pay less each month and have good credit you should be able to juggle what is left to another card.

Good luck with finding something that works for you.

I owe £5.5k as a settlement figure but the car is only worth £3k.

Don't fancy adding the shortfall to the end of another finance agreement!

matttye · 4 August 2014 at 7:39PM

You haven't said if this is due to financial hardship. If it is then this won't be an option that's available to you, but one thing you can do is to pay off a lump sum and ask them to use the amount to reduce the monthly payments.

Most finance agreements will let you either take a payment holiday or lower the monthly payments when you pay off a lump sum.

E.g. I paid £500 off my PCP agreement last month and that lowered my monthly payment by £17 ish per month (it's a 4 year agreement).

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