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

car_chick

Hi,

This is my first post so hope I do this right!!

Some finance agreements have an option to hand the car back once half of the original purchase price has been paid and some when half the credit is paid.

This varies with different finance companies but if you put a deposit down when you bought the car this would count towards it.

If you hand the car back this is called voluntary termination(VT) you have to write to them to terminate your credit agreement and once done you will probably have to leave the car with the supplying dealer and make your own way home immediately. This officially doesn't black mark you for future Hire Purchase, However it is commonly agreed that a note is made that you have done this and therefore could affect a future finance company approving you - they couldn't give that as a reason as it's illegal to refuse you for VT.

As for the value of your car if you have a large amount of negative equity it's unlikely that you will get enough for it to clear your HP and even if you part exchange the difference between what its worth and what they end up giving you is just equivalent of a discount anyway so PX not always the way, although much more convenient if your happy with the figures.

Sorry its long, hope it helps.

in*the*red_6

Thanks all, we're pretty certain we're going to cut our losses, hand the car back and get another (probably not a 7 seater) so I've heeded the advice given!

ITR

in*the*red_6

car_chick wrote:

Hi,

Some finance agreements have an option to hand the car back once half of the original purchase price has been paid and some when half the credit is paid.

This varies with different finance companies but if you put a deposit down when you bought the car this would count towards it.

Just read carefully through the figures on the finance agreement and ours is the first of these so even though we put down a deposit we can't hand back until half the total purchase price has been paid to them :eek:

This means although we've made 30 months of payments out of 60 we still owe £850 before we can terminate the contract! :mad:

Jaymz

Personally if I was you I would cut your losses and get shot of the car asap. Its got high mileage and isnt worth what you have left to pay for it!
Do think about it carefully though.

in*the*red_6

I don't know what to do for the best now, last night we had agreed to hand back the car and take out a loan (or extend my existing flexible loan) to buy another. Although this isn't reducing our debt it wouldn't have increased it as we already owe the £4.5k to the finance company - this would just have been shifting this debt elsewhere (to a lower APR) and hopefully getting us a more reliable car.
Now I don't know whether to hang onto the car for another 7 months till we've paid enough off to terminate (bearing in mind it will need 2 new tyres £100 min and MOT etc before then) or to borrow a bit extra and pay the £850 to terminate asap. This would mean our debt figure will go up though when I really don't want it to

skintchick

Borrow and get rid - don't waste any more cash on it.

Jorgan_2

When you say another large bill, how much have you spent on it in the last 12 months? Are you using a main dealer for the servicing or repairs? If so, shop around for independent garages, these will be a lot cheaper. The OH has a Seat Alhambra, same as Galaxy and we looked at changing it last year. We too had a couple of big bills come in for it, which triggered the thought of changing it. Looking around we would have to spend £5k + the car to get anything worth changing for. In the end we decided to keep it for the following reasons: it was a car that we knew the history of for the last three years, it had had a quite a bit of work done in that time which (hopefully) wouldn't need doing again, £5k buys a lot of repairs. I could buy a car that could need major repairs in the near future.

If I was in your situation I would look to take a personal loan to pay the finance company off & keep the car.

moneyuser

Have you got the correct settlement figure yet? It sounds like you are calculating the amount you based on continuing the repayments. The settlement should be lower as some interest should be taken off. Well it was for me anyway!

in*the*red_6

Jorgan wrote:

When you say another large bill, how much have you spent on it in the last 12 months? Are you using a main dealer for the servicing or repairs? If so, shop around for independent garages, these will be a lot cheaper. The OH has a Seat Alhambra, same as Galaxy and we looked at changing it last year. We too had a couple of big bills come in for it, which triggered the thought of changing it. Looking around we would have to spend £5k + the car to get anything worth changing for. In the end we decided to keep it for the following reasons: it was a car that we knew the history of for the last three years, it had had a quite a bit of work done in that time which (hopefully) wouldn't need doing again, £5k buys a lot of repairs. I could buy a car that could need major repairs in the near future.

If I was in your situation I would look to take a personal loan to pay the finance company off & keep the car.

Hi

Last year the car cost us something like £1k when it needed some bits due to failing the MOT and the ABS was faulty. We took it to the Ford dealer that time but said we woudn't go there after that. This time it's gone into the local village garage who everyone tells me are cheap, it's had a service, new exhaust (catalytic part) and front pads. This will be about £550 AFAIK. It also needs two new tyres which I will get done at the tyre centre instead which will be another £100. Our concern is with nearly 100k on the clock is that the cam belt will need replacing next, we've had that go on a previous car and it was a nightmare (have luck with cars don't we!)
See what you mean about keeping it, that was DHs opinion as he says that we've had lots of work done to it now so it should be ok, but every time it goes to the garage I seem to get the call saying "it's going to be expensive". DH will not get a car for under £5k either (as he has to travel a lot) and that will put us into further debt as things stand so maybe we should hold onto it? I just don't know anymore!
Thanks for your advice

in*the*red_6

moneyuser wrote:

Have you got the correct settlement figure yet? It sounds like you are calculating the amount you based on continuing the repayments. The settlement should be lower as some interest should be taken off. Well it was for me anyway!

Well, we don't owe the £4578.22 to the finance company, I have realised that's the amount we would have to have paid to them to VT. I have worked out that we still owe £3628.50 if we keep paying the installments for the next 30 months. I hadn't realised they should take some interest off. The car's in my husband's name so of course they wouldn't talk to me but I will see when I can get him to ring them for a figure.
Thank you.