Car costing us a fortune advice what to do???

in*the*red_6

Hi was wondering if anyone could help me as I'm unsure what's best to do about our car which is still on finance and has incurred another large repair bill today.

The background is we bought the car, a Ford Galaxy, from a dealer in July 2003 and signed up for their Finance agreement (stupid I know)! on a 5 year deal.

The APR is 15.5% and we paid an initial payment of £219.95 and then monthly payments of £120.95 thereafter.

The total amount payable (price plus charge for credit) was £9,156.44.

We are now halfway through the agreement and there is an option to give the car back if you've made half or more of the payments.

Having looked on Autotrader the car is worth £2,995 tops! It has almost £100k on the clock as my husband travels around for work.

The outstanding balance at the halfway point is £4578.22.

Should we:

1) Arrange to give the car back now, cut our losses and arrange a new low rate loan for a newer, low mileage car?

2) See if we can arrange a loan to pay off the O/S finance and then use the car as Px against a newer one (can't see anything in the T&Cs about early settlement though)?

3) Carry on as we are and keep paying the monthly amounts for the next 2 1/2 yrs (obviously mileage will be even higher by then)?

4) Do something else I haven't thought of?

Thanks

ITR

P.S. We would like to continue with a 7 seater if possible as it's been great for our family and I am hoping to start chilminding in the next few months.

skintchick

I'd be tempted to go for option two, assuming you can actually get £3k for such a high mileage vehicle.

Otherwise, I'd cut my losses as you're just throwing your money away on repair bills.

I don't think it's worth keeping it - why pay £4,500 more for a car that is clearly falling to pieces?

You may as well commit that to a better car.

And do you REALLY NEED seven seats? It sounds an awful lot and costs you more. They also cost more to run cos they are so heavy and bulky.

jcr16

i agree option 2. i understand what u mean about 7 seats . we borrowed my mum's previa for xmas and it was fantastic. but again, do u really need 7 seats as it does cost lost more to run.
my mums preiva is a k reg and it cost her under 2k. and it has been fantastic, no prob's whatsoever.
but if your going to use it for your business then u can off set some of the cost and usage for it on your tax returns so maybe it won't cost that much more than a normal car.
HTH

mummytofour

I have a prevea., great cars cost a lot to run tho.
I hate cars with a passion hind sight is wonderful, I agree with cutting your losses, I would also contact the finace place and get a settlement figure, you may not owe as much as you think, you will probaly get a dicount for ending the agreement early.

in*the*red_6

Thanks

Looking again, option 2 would still mean paying £4.5k for the car and if it's only worth £3k would it be worth it, I know you get more for px but not sure it would be that much?

I guess the answer to whether we NEED 7 seats is no, I think we've just got used to the luxury of having them and it would obviously be handy if I am working as a childminder.

A previa is a Toyota isn't it? My parents always had Toyota's and swear by japanese cars, maybe that's where we've been going wrong? I will have a look at these.

belsh77

Hi there I was in a similar situation a few years ago with a similar clause in my finance agreement.

When I contacted the finance company they informed me that I could not simply stop making the repayments and give the car back! I would take the car to a car auction as specified by the finance company, sell it but I would still be responsible for the difference between the auction sale price and the outstanding balance owed!! Could this be correct? At the time I did not question it.

in*the*red_6

That's interesting, I will seriously dispute it if they try that, there's nothing in the agreement to suggest that would be the case. It says if you have already paid half you will not have to pay any more provided you have taken reasonable care of the goods (well we've spent enough money on the goods!!!)

dinkylou

I personally would give the car back and stop paying (if thats possible)

If you dont NEED a car with more than 5 seats then dont get one as you can get decent family cars much cheaper, and can't you take the bus if you cant get more children in the car?

Would you really be taking them far in the car?

If you really need a 7-seater, maybe you could buy an old one?

Keeval

I have been in the same position as you. As long as the Finance agreement is specifically for a vehicle, there will will be a hand back clause.

If you have paid the amount (or more) in the hand back clause (usually a certain percentage of the payments) you can cancel the agreement and hand the car back to them. If they try and tell you that you have to sell the car etc.. etc.. then they are lying, it is up to them to dispose of/resell the car as it is their property, and you are cancelling your contract with them.

Regards,

-Keeval-

IN_LIKE_EVERYONE_ELSE!

I have given a car back when I was half way through a credit term, check your agreement, get rid of it, treat it as negative equity, why pay 4.5k for something that is worth 2k

GET RID OF IT THE CORRECT AND PROPER WAY, LOOK AT THE ORIGINAL DEAL.

XX

Juni_3

I too gave a car back halfway through an agreement. I think it's better to cut your losses.

As for a car to replace it, how about a Toyota Lucida? It's a slightly smaller version of the Previa and has eight seats. I bought mine for £2k and it's brilliant.

Nowhere near as nice to drive as my Saab but more practical with lots of kiddies about.