New MS'er after some advise

Bozzagorn

Hi all,

Firstly - Hullo. I've been a regular subscriber to the Email, but only just logged into the forums, as I've landed myself in a bit of trouble and need to find out what I can possibly do to be best off.

I bought a £2,900 car last October and took out a loan for £5,000 from A&L to cover this, my insurance and a full service (with a little left over for me!). I had taken PPI (including GAP cover) on the loan and this meant that the total loan value crept to a little over £7,000 (inc. interest). It flew through the service but unfortunately some months ago, and to cut a long story short, it cost me ~£1,350 in maintenance bills. This was put on a 0% Credit Card. Then, at the end of March, I was unfortunate enough to be involved in an accident and the car written off. I had paid 6 payments to A&L of £204 monthly, the motor insurance paid out £2,650. This left ~£3,200 on the loan, along with my £1,350 on the 0% credit card (until August). The GAP insurance, I thought would cover the majority of the £3,200, however I was astounded that they paid out £209. After many, many, many deliberations it appears that as I only used 58% of the loan (£2900 of £5000) to buy the car, then their cover only pays out 58% of any claim. (Incidentally, if anyone has an opinion on that, I'd be grateful to hear it).

Now - my decisions...

1) A&L have offered to give me the £2,650 back. This would enable me to pay the credit card off in full, and have enough left over to maintain monthly payments on the loan for 6-7 months, without me having to worry about it. However, after that 6-7 months I'd be left with a loan with £3,000 and monthly payments of £204, which in all honesty is a bit difficult for me to afford right now.

2) Settlement figure on the loan at present is £1650. This means that I could take a second loan from somewhere (probably at a lower rate than I was offerred last October) for £3,000 over say, 36 months-ish. Pay off both and have monthly payments of roughly £110. I imagine....

3) As my A&L Loan is now so far in advance, I would need to make 15 payments @ £204 to settle it. This means that I would be paying off a 36 month loan in a little over 24 months. In your experiences, how likely are A&L to reduce the monthly payments so that the term remains 36 months - thus making my repayments smaller and far easier to manage? This option does have the negative that I would be focusing all of my resource at the loan, and not so much at the credit card - which ultimately I obviously want shot of ASAP.

If anyone can think of any other options that maay be open to me, I'd be very welcoming. As far as I can tell, Option 2 is the better.

If anyone is to mention a 0% balance transfer credit card, i.e. Virgin - I'm afraid that for whatever reason they decide, I'm not applicable to have one. I've never had a bad history, and this is the first time I've been in any sort of trouble, so not too sure about that!!

Sorry if I've rambled on a bit, but hopefully you all have the full story!

Cheers,

Chris

Bozzagorn

Anyone? :hello:

Thanks,

Chris

nomoneytoday

The car cost £2900, the insurance paid out £2650 and the GAP covered £209, in effect paying for the car, with the exception of £41.

The fact that you borrowed £8350 is aside from that.

Had you not had the accident, you would have owed £8350 minus the payments, and that hasn't changed.

In essence, what is to stop you from making the same payment amounts as you were previously, and then use the £2859 to purchase another vehicle?

Bozzagorn

nomoneytoday wrote: »

The car cost £2900, the insurance paid out £2650 and the GAP covered £209, in effect paying for the car, with the exception of £41.

The fact that you borrowed £8350 is aside from that.

Had you not had the accident, you would have owed £8350 minus the payments, and that hasn't changed.

In essence, what is to stop you from making the same payment amounts as you were previously, and then use the £2859 to purchase another vehicle?

I think you've missed the main point of my post.

The total of the loan came to £7250~. I'm not querying the fact that the GAP paid out £209, as I said - the whole 58% thing seems perfectly fine in my mind - I was just wondering what other people might have felt.

The whole saga has left me £3000 on a loan and £1200~ on the C/C. I can't use the £2850 to buy a new car even if I wanted to because that is already applied to the loan - hence there being £3000 left and not £5800~.

My query is to see whether me getting a 2nd loan for £3000, settle the existing loan and pay off the C/C is actually viable - and the best possible 'next-step' for me. Or if anyone had any other suggestions...

The £204 monthly payment on the existing loan is proving a bit difficult ot afford to be honest, and would rather not see me paying that for 15 months - and still ahve the C/C to worry about.

If you get me....


Cheers,

Chris