Stuck in Car Finance Agreement

Deedee83_2

Hello,

I took out a 3 year car finance agreement on a new car with Peugeot last year, at the time I was starting a new job that paid a generous car allowance which covered the monthly payments. Unfortunately that job didn't work out and the job I now have comes with a company car and no option to use my own. I have now come to the end of the first year and am struggling to pay finance for a car that I don't even need, on top of this I have to renew the tax and insurance this month. I have phoned the finance company and they told me that I couldn't give the car back (without considerable fees and charges - c.2000 pounds) until I have made a further 8 monthly installments. I could declare the car off the road, take out 3rd party insurance and leave the car on the drive for another 8 months but I begrudge paying the finance to have a car sitting on the drive :mad:

I have a few friends that have expressed interest in loaning the car from me, thus covering the monthly payment, tax, getting their own insurance and basically sorting out my problem. But, does anyone else have experience of this? I am sure that I would not be allowed to 'sub-let' the car under the finance agreement, but this would be an arrangement between friends, so who would know? However, I would be reluctant to hand over the car without some sort of contract because of there were any problems with damage, driving fines etc it could be more hassle than its worth.

Any advice would be much appreciated!

Thanks

GeorgeUK

You do not need to have actually paid the 50% to be able to terminate your agreement, although some creditors say you do. All that is necessary is for you to give notice to the creditor in writing that you are terminating the agreement.
Source: Nationaldebtline

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=16_how_to_deal_with_hire_purchase_debt#6

I'm not sure if finance companies tell people this in the hope that the cusomer is unable to maintain payments so that the company can then reposess the vehicle. If this happened you would be liable for the full cost - not just 50%

I have no idea about allowing others to drive the car though. Hopefully someone else can advise.

It might be worthwhile posting up a statement of affairs incase there are areas we can suggest savings in. You may be able to cut utility bills, spread council tax payments or reduce the amount of interest you are paying on other debts which may enable you to meet the payments easier.
http://www.makesenseofcards.com/soacalc.html

Deedee83_2

Hi George,

Thanks for that, I gave the national debt line a call and they were very helpful. As I thought I do have to pay a substantial amount to give the car back (12,400) but what they did suggest is that I ask the finance company for their permission to sell the car privately - which I have done and they have agreed, as long as I don't hand over the keys before I have paid them the settlement fee.

I am not sure how easy it will be to sell a convertible in winter in a recession, but its worth a go as this is the cheapest option for me!

Thanks!

mcjordi

see what a garage would offer to buy it off you mate