Car finance advise

hfdka

Dear all,

I'm hoping I can get some advise on a car loan. 3 years ago I purchased a car through one of those awful garages that charge the earth, at the time I had separated from my husband and (wrongly) believed that my credit would not be good enough for a regular finance package. I was taking my 2 year old son to nursery and then onto work which was a round trip each day of 5 miles - nice in the sun but not so nice in winter! So I felt I needed a car.
The interest was extortionate, a Ford Ka which cost me under £3,000 was going to cost a total of (approx) £9,360 over the loan period (I pay £156 per month over 5 years) I'm sure somewhere smarter than me can work out the interest.
I was desperate at the time but still had concerns over the payments however the salesman said to keep the car for 6 months and then after that time upgrade to a better car and a lower interest rate, doing this he said would ensure within a year or so that my credit would be 'repaired' (bear in mind my credit was fine) and I would have a very good car for very little.
When I tried to do this I was told that there wasn't enough 'equity' in the car and that I should try again in 6 months - which I did with the same results.
Realising the huge error I'd made I was determined to save enough money so that I could sell the car privately and with that income have enough with my savings to clear off the loan.
The problem I had with selling it is that within the two year warranty period the car had so many faults that I used all of the £1000 warranty allowance and spent £1,200 of my own money on it, for the past 6 months I have not used the car as both doors fell off! I had also been given a car by my boss at work which was a larger engine and therefore costing me more in terms of fuel, tax and insurance but at least it worked!
I've let this go on for far too long and now being in a situation where my rent has gone up and my income has dramatically gone down (I work in an estate agents) I decided to try to get the car repaired prior to sale. I've just heard back from the garage that the chassis is completely gone and is unrepairable, the mechanic said it was pretty much a "write off" and was now worth at most £200.
I have spoken to the finance company (Cygnet Finance) and they said there is nothing they are prepared to do and that I must keep paying (in total almost an extra £4,000) I understand that part as I do have a loan agreement but I was surprised they were not prepared to look at refinance, perhaps I'm very naive? The best they could suggest was that I speak to the warranty company but they explained that the warranty expired after 2 years.
I'm guessing the best I can hope for is to get a redemption figure (this time last year it was around £3,500) and between my small savings a credit cards clear it off but does anyone have any better ideas? So far I have spent around £5,000 on a car I have used for approx 2 years and I'm guessing they will still want around another £2,000 to clear it. My big concern is if I don't have enough to clear it
and have to continue to pay it. Do you feel I have a case for arguing any of this with them? I haven't written to them for a redemption figure as I know everything has to be in writing and it takes them about a month to reply so I wanted to check if there was anything else I ought to ask for or say in the letter?
ANY help or advice at all would be gratefully received as I am very worried about this and not sleeping - I guess at least I have plenty of waking hours to think on my errors.
Thank you.

CLAPTON

firstly write to them for a settlement figure...

once you have that see if you can get a lower APR loan to pay it off

did you have PPI on the loan/ if so you may be able to argue that it was mis sold.

hfdka

Hi and thanks for your help. I take it PPI is an insurance cover? That being the case then no I don't believe I did unless that was built into the loan; they certainly didn't mention anything when I called.

hfdka

Just checked and I only have life insurance and guareenteed asset protection which apparently covers me only if the car is a write off through an accident.

hfdka

Sorry, typed in a hurry without checking! That should have said guaranteed

sturose

I took on a similar finance deal a few years ago as I needed a car urgently.
My circumstances changed about halfway through the agreement and the car was no longer suitable for me, I contacted the finance company and was greeted with a similar response. i.e. I would have to pay almost £4000 to clear the agreement even though the car was worth about £1000 or less.
I decided to read the agreement thoroughly and I discovered that I could hand the car back to the finance company once I had paid 50% of the total agreement and I would then owe them nothing. It was a different finance company but it would be worth checking if there is a similar clause in your agreement as it saved me a fortune and it does not affect your credit rating.

Stuart

dolally_2

sturose wrote: »

I took on a similar finance deal a few years ago as I needed a car urgently.
My circumstances changed about halfway through the agreement and the car was no longer suitable for me, I contacted the finance company and was greeted with a similar response. i.e. I would have to pay almost £4000 to clear the agreement even though the car was worth about £1000 or less.
I decided to read the agreement thoroughly and I discovered that I could hand the car back to the finance company once I had paid 50% of the total agreement and I would then owe them nothing. It was a different finance company but it would be worth checking if there is a similar clause in your agreement as it saved me a fortune and it does not affect your credit rating.

Stuart

Might work, although I would imagine they would insist on holding the op responsible for any repairs they would need to carry out to the car. Still could work out less than settlement figure though.

Best of luck - hope you can get something sorted out.

sturose

dolally wrote: »

Might work, although I would imagine they would insist on holding the op responsible for any repairs they would need to carry out to the car. Still could work out less than settlement figure though.

Best of luck - hope you can get something sorted out.

Maybe but they also have to allow for general wear and tear. The finance company I used was Forthright Finance, when I told them I was handing the car back they didn't bother inspecting the car they just sent a recovery vehicle who took it to the nearest auction and sold it.

hfdka

Thanks all,

They have given me a settlement figure over e mail which is £1,666. This is less than I thought it would be and I could hopefully clear it on my Barclay card or HSBC as they are both 0% on purchases and balance transfers but not sure if this would come under either of these! Either way even with the interest rate it will still be a lot cheaper than my current repayments and hopefully even if I get a few hundred for the car it can go towards it. Obviously only after I have a copy of my agreement to check if they have that clause!
Important lesson learned!