New Car Dilemma

nordberg

Guys, I'm facing a dilemma. My motor is now in a state of negative equity. I owe just over £14k on it and it's worth approx £12k to a dealer. I have a get out clause in my HP agreement with VFS that says as long as I've paid 50% of the loan back, I can hand the vehicle back with no penalty. I'm about £1k away from the 50% mark. So - I think it's best to get shut now as I can only see things getting worse. I can't decide whether to pay off the remainder and give it back as soon as possible, or just continue with the normal repayments for another 2.5 months which will pretty much make up the current shortfall.

I get a company car allowance of roughly £440 after tax. At the moment, my repayments on my current car eat 90% of this up. Given the current state of the economic world, I plan to get something that is significantly cheaper to run and that will, hopefully, leave me with some money from my allowance to put toward actually running the car (eg insurance and RFL etc). With that in mind, I'm thinking a personal lease is good option. Does anyone here lease their car? I'm keeping an eye out and hoping that some of the monthly prices will come down a bit in line with BOE announcement last week.

Any suggestions or advice on this matter very welcome!!