Car Finance Help Needed

jamespounder1

Hi,

I have car finance with Bank of Scotland and have 14 monthly payments to make.

The car in question is off the road and has been for the last 5 months.I want to get rid of the car because I cant afford the repayments anymore, but the car isnt worth as much as the finance settlement. I have had quotes to fix the car and they are around £400 which i cant afford either.

What are the consequences of handing the car back to finance company in its current (un-roadworthy) state.

I already have defaults recently registered against my credit file because I am self negotiating with other creditors.

I just want to know what options I have, I am of the understanding that its illegal to sell the car while finance is still owing on it...

Thanks in advance for any help.

James

DarkConvict

It depends on the agreement.

Some HP agreements allow you to hand it back if you paid over 50% of the original agreement and the remainder is wiped off.

Some do not allow it, and basically if they take it back the current car value will just be taken off the debt.

Secured loans, i.e. a loan which if defaulted they seize the car is the same as above, it just reduces the value of the debt.

If it was an unsecured loan, so a normal cash loan and you used that to buy a car, then the car can be sold yourself.

So aside from the one term in some HP agreements there is not much you can really do.

jamespounder1

Thanks DC,

I do have the 50% clause in my contract. I just wonder how much they are gonna 'chase' me for once the car's value has been deducted.

Are they likely to take the [EMAIL="p@@s"]p@@s[/EMAIL] and just deduct a ridiculously low amount from the debt?

Thanks

James

mad_bad_spender

James: Probably imo

I know with my car finance i can hand back after 50% paid but they can charge if the car is not in good roadworthy condition

this however will then be a debt same as your others and you would be in a position to negotiate how to pay this off