Car finance quandry

MortgageMamma

Hi All

Hope someone can help.

Prior to meeting me my partner and his mother took out a 3 year hire purchase contract on a car 2 years ago at a whopping 51% APR. His mother no longer needs the car so has "given" it to us along with the next 12 months payments (my partner paid the first 22 plus deposit). They took the HP contract with Furness Finance who are now no longer lending (I've not looked into why).

My partner and his mother (much to my :mad:) didn't research the vehicle or finance properly which has left me with a vehicle that does 6-8mpg on urban roads, costs a fortune in petrol and I'm paying a whopping £170 a month for a car worth about £2k:eek:.

We have a baby on the way and I already have 3 kids previous so we plan to buy a people carrier in the near future, but we are in what I call negative equity with the existing car because its worth less than we owe on it:o.

Can anyone give me a best case scenario here, I'd like to hand back the car on HP to the finance company but I don't want my partners already less than perfect credit rating damaging even more as we need to get more finance to buy the people carrier Before anyone suggests it I can't get finance just in my name as my only income is DLA, child maintenance, child tax credits and child benefit and I'm not likely to be able to get a job in my condition nor return to work for the next 2 years or so...

Sorry if thats waffled been ages since i posted on here!

PNPSUKNET

is it pcp ? or hp? it will say in the contract if you have term rights. If your on dla what level are you on?

MortgageMamma

PNPSUKNET wrote: »

is it pcp ? or hp? it will say in the contract if you have term rights. If your on dla what level are you on?

The car is on good old fashioned HP. I've just read the contract it was heavy reading. They also seem to have been sold gap insurance which they didnt have a clue about. The thing thats confusing me now is it says the loan agreement is regulated by the consumer credit act yet then it goes on to state there is no cancellation period on the contract and then goes on to say if the customer wants to cancel the contract they must repay 50% of the finance owed and return the vehicle immediately - any clues on that one as it seems somewhat contradictory to me?

The DLA is for my son not for me, and its guaranteed for the next 6 years. He gets lower rate care component and middle rate mobility component - works out about £64 a week

PNPSUKNET

it will have vt rights then, as long as you have paid back 50% of the total finance inc intrest you can give the car back. The other is reffering to cooling off periods.

~Brock~

The bit about no canellation peiod is correct. I will be an on trade agreement (signed on the premises of the supplier) which does not give any right of cancellation.

The 50% bit is referring to the right to termination the agreement. It is likely to have statutory wording in this respect, but from what you said in your original post is sounds like the borrower is already in a position to terminate without further cost (providing the car is in good conditionand the payments are up to date).

MortgageMamma

Can anyone tell me what will happen to my partners credit rating if he sends the vehicle back? how will that leave us for getting finance for the people carrier?

Common_Sense_2

If you VT it will show on is credit profile for 6 years. however this is not classed as an adverse marker. Other lenders cannot reject applications solely on that basis

PNPSUKNET

I vt a couple of years ago, hasnt effected me

Dabooka

My pal VT'd about three cars on the bounce, never had a bother (2 from the same main dealer).

System

I VT'd last year, it's had absolutely no effect on my gaining credit.

I'm not sure if a VT marker would specifically affect future car finance applications, I'm sure someone will be able to advise.

Try the following link for some excellent advice on voluntary termination, the process and a template letter:

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=16_how_to_deal_with_hire_purchase_debt

Regards
UNDERGROUND

marmitedog

Common_Sense_2 wrote: »

If you VT it will show on is credit profile for 6 years. however this is not classed as an adverse marker. Other lenders cannot reject applications solely on that basis

Lenders can reject applications using whatever basis they like; its their money.