Have i understood this car finance correctly?

hewhoisnotintheknow

dont do it

R0bert_Sterling

There is no way on this planet this kid is going to be let out of this scam with any kind of cooling off period.

They would have seen him coming a mile off, all possible exit strategies would have been bolted down before he put pen to paper.

This kid is a freaking lunatic!!!

OP, you say you wouldn't buy a £500 car because it might breakdown!!

You would have £18,500 to spend on repairs.... no matter how unreliable the £500 car is, you will have ample to cover it.

I'm sorry but I can't believe your vote counts for as much as ours!!

motorguy

reevsy wrote: »

I'd hand the keys in and default. Sod it. £300 a month for a 80k Focus. I could not live with that.

All that would mean is that they would pursue him for all the money through the courts...

motorguy

To the O/P

Drive it 2.5 years. Come back here with the exact finance figure details and confirm you have paid enough enough to do a Voluntary Termination.

THEN before you do anything else DO YOUR HOMEWORK FIRST. Theres no point posting onto MSE AFTER you've put your head in the noose.

Hopefully you'll be able to keep your head above water long enough financially to make the payments until then

richardfoster

I would suggest you check your finance agreement. If you have a 'conditional sale regulated by the consumer credit act', then yes you can get out of the agreement when you have paid half the total amount payable - however I would strongly suggest that you speak with the finance company who your agreement is with an ask them for a settlement figure. If this is a regulated conditional sale agreement then they have to abide with the 'rule of 78' formula for calculating settlement figures - as a very rough calculation this is the capital amount outstanding plus a couple of month's interest. Get the settlement figure - and speak with your bank about an unsecured personal loan to pay this off.

This is my first post on here - but I have worked in car finance for 14 years. If I can be of help then please just ask.

motorguy

richardfoster wrote: »

I would suggest you check your finance agreement. If you have a 'conditional sale regulated by the consumer credit act', then yes you can get out of the agreement when you have paid half the total amount payable - however I would strongly suggest that you speak with the finance company who your agreement is with an ask them for a settlement figure. If this is a regulated conditional sale agreement then they have to abide with the 'rule of 78' formula for calculating settlement figures - as a very rough calculation this is the capital amount outstanding plus a couple of month's interest. Get the settlement figure - and speak with your bank about an unsecured personal loan to pay this off.

This is my first post on here - but I have worked in car finance for 14 years. If I can be of help then please just ask.

Surely all financial agreements (under £25K at least) are regulated by the consumer credit act?

The problem is the O/P hasnt been able to get finance anywhere else and has a bad credit rating, therefore normal institutions such as high street banks wont lend him the money hence he went to a loan shark, sorry 'specialist'

richardfoster

The £25k ceiling was removed in April 2008 from regulated agreements - I'm not sure about settlement figures on unsecured and personal loans as I don't deal in them and I'm not sure if they're subject to the rule of 78 settlement formula.

Understand that he's had trouble getting credit in his own name, perhaps a parent would indemnify a more suitable transaction for him?

motorguy

richardfoster wrote: »

The £25k ceiling was removed in April 2008 from regulated agreements - I'm not sure about settlement figures on unsecured and personal loans as I don't deal in them and I'm not sure if they're subject to the rule of 78 settlement formula.

Understand that he's had trouble getting credit in his own name, perhaps a parent would indemnify a more suitable transaction for him?

Yeah i knew the 'ceiling' figure had removed at some point, but thats just giving people who spend more better rights.

I guess its down to whether or not it was a personal loan or a car finance agreement.

Yeah, having someone as a 'guarantor' could have been / could be a way forward.

dan.the.man_5

You have to feel a bit sorry for the OP, he's now stitched up.

I learned to fix £500 bangers until I could afford a nicer car, plus MSE gets you AA/RAC for around £20

janninew

chrisevison wrote: »

Surely he'd be better just handing the keys back and defaulting on the loan?

Sure he'll never get credit again but that sounds like a good thing to me.
Nothing could be worse than this deal surely?

People like this shouldn't be on the road. He's foolish enough to take out a credit agreement like that and yet he'll be driving a machine capable of killing.[/QUOTE]

What a bizarre thing to say! So going of your logic only people who have financial sense should be able to drive?! The OP came on here for advice, yes he has been foolish, it doesn't make him a bad person. He is likely going to have to pay for this costly mistake. OP I would go to the CAB for advice and see if they can suggest anything, you have nothing to lose.

Good luck!
Janninew