car worth less than what is due on finance

thescouselander

jakeleo09 wrote: »

exactly, its not mine to sell and i don't have £5000 to throw away. basically that would just disappear wouldn't it? so i guess im stuck with my car then?

No, it hasn't disappeared - you would have equity in the car to the value of whatever its worth. You would then release this equity when you sell the car or trade it in.

darich

OP - you say you can afford a 13k car but can't afford to pay off the 5k outstanding on the current car.
How is this??

Do you mean you can afford a 13k car after paying off the 5k car? In other words 18k loan??
Or do you mean you can afford 13k and use 5k of that to pay off the current car leaving you 8k to spend on a replacement??
I think this is a quick way to some major loan debt.

I think the best advice is from PPPLasers - if you're desperate for a change then clear the debt on it, and buy something less than 13k.

motorguy

darich wrote: »

OP - you say you can afford a 13k car but can't afford to pay off the 5k outstanding on the current car.
How is this??

Do you mean you can afford a 13k car after paying off the 5k car? In other words 18k loan??
Or do you mean you can afford 13k and use 5k of that to pay off the current car leaving you 8k to spend on a replacement??
I think this is a quick way to some major loan debt.

I think the best advice is from PPPLasers - if you're desperate for a change then clear the debt on it, and buy something less than 13k.

You're confused.

Car worth £5K, finance outstanding of £6K.

£13K loan.

O/P looks at car at £12K. Dealer gives £5K for the trade in. O/P borrows £13K, pays loan off of £6K, and gives the dealer the £7K difference to change the cars.

Its not the 'end of the world', but its far from ideal.

motorguy

jakeleo09 wrote: »

Hi guys, I have a car which I bought nearly 2 years ago but i traded in my previous car too early. My car in now worth roughly £5000 but I still owe £6000 on the finance. I am due another baby in September and would like to get another car to suit. I'm able to afford a car at about £13,000 if I can balance out the remaining equity. Anybody know if it's possible to trade the car in without throwing away a huge deposit? How do I go around this? I wanted to hand the car back saying I didn't need it anymore. The car drives me nuts as the previous owner did some diy on the electricals but i found out too late. so i cannot hand the car back. I took it out over 5 years. any help is appreciated to get rid of this car. thanks

What makes you say your car is only worth £5K?

What have you currently, how many kids have you, what ages are they and why do you think you *need* to change your car?

penrhyn

OP care to identify the make model and year of the car you want to trade in along with its mileage, I'm sure folks on here will give you a decent valuation.

anewman

Why I would never buy a car on finance.

darich

pgilc1 wrote: »

You're confused.

Car worth £5K, finance outstanding of £6K.

£13K loan.

O/P looks at car at £12K. Dealer gives £5K for the trade in. O/P borrows £13K, pays loan off of £6K, and gives the dealer the £7K difference to change the cars.

Its not the 'end of the world', but its far from ideal.

Possibly.
Confused because the OP said they could afford a car at 13k....not a loan of 13k.

ghanagirl

She says I'm able to afford a car at about £13,000 if I can balance out the remaining equity.
Why not buy a car for £12k and use £1k to clear your finance.
You may have to clear the finance on your car before you can get a loan for a new car !
I would call the finance people and ask for permission to sell the car, tell them your pregnant and you need a bigger car, there maybe a Early Payment Clause.
If your happy with the interest they charge you could tell them you will want finance from them for a new car, this could swing it, or you could say you may have to give up work and want the max value from the car now which you say is £5000 and say you want to pay them back A.S.A.P

You say your car is worth £5000 is that cash or £5000 trade in value ?.
The car you want to buy is it new or a second hand ?
Spoke to my Nissan dealer about the end of the Scrapage Scheme and he said it was a waste of time as you could have got £2000 off a new car and sold your old car or kept it, same thing was said to F.I.L at Fords when he had his car serviced last week.

What i'm saying is if your can get a loan of £13k, then you can offer cash to the dealer and then HAGGLE to get £1000-£2000 off, then sell your car for £5000 add the money you have saved to pay of the finance company.

Remember to look far and wide for a brand new car from a dealer, even after paying for delivery you can save a fortune.
We bought our Merc van from germany saved £9000 and got any choice of paint and finish which was extra if bought here and it was right hand drive too.

motorguy

anewman wrote: »

Why I would never buy a car on finance.

I think you need to be very sure of future needs to justify finance over 5 years.

I personally prefer new / close to new cars to get the reliability / warranty / hassle free motoring. There is a premium with doing that, but to me its worth it.

thescouselander

pgilc1 wrote: »

I think you need to be very sure of future needs to justify finance over 5 years.

I personally prefer new / close to new cars to get the reliability / warranty / hassle free motoring. There is a premium with doing that, but to me its worth it.

I wouldn't be too concerned about finance over 5 years. As long as you put a good deposit down you can stay ahead of the depreciation and if anything happens you just sell the car and settle the loan.