Want to change car but only had it a year on finance - advice?

brody77

Hi all,

This is probably one of those situations where the answer is basically "grin & bear it", however, it can't hurt to get advice!

In Jan 2008 I got a used Renault Clio on finance from Arnold, but due to our baby being born & my increased driving distance to work I went back to try & change car a year later - it took some work (according to the sales dude) but I was able to get a Laguna (sadly it's a bit crappy) with the much needed boot space & diesel engine.

It just had it's service/MOT last month & I got pummelled on repair work, but this is by the by.

My daughter is now 2 & we no longer need such a big car, plus my office has moved to less than 3 miles from where I live, so I have no need for the big diesel either.

My problem is that, when sorting out the Laguna purchase, the salesman kept saying something about "negative equity" & that I'd need to keep the Laguna for at least 3 years?
I think this was due to me returning the Clio after a year - even though it was immaculate & I don't doubt it was sold at a profit!

I'd really like to downsize & save money, but my worry is this won't be possible due to this negative equity thing & I'll be stuck with the Laguna for at least 2 more years, which is a less than fun thought as it's an 05 plate so I imagine it will start needing more & more work done.

I'd really appreciate any advice or comments on this.

Thanks in advance,

Brian

motorguy

Ring the finance company and ask for a settlement figure.

That will let you know how much you owe. You should be able to get an indicative value of what your car is worth by checking autotrader for similar.

I would say you owe a lot more than its worth.

Personally, i think you need to hold on to it and as you say 'grin and bear it'. If the car has just passed its mot, then fingers crossed it will be ok for the remainder of the year. Also, make sure you are using a reputable but small garage that isnt ripping you off with unnecessary work or high labour rates.

This sounds an awful lot like changing your car is a 'nice to have', therefore not a necessity, so sticking with what you have will by far be the cheapest option.

** EDIT : Also check for the 50% figure on your finance agreement, once you have paid that in total you should be able to hand the car back - assuming it is car finance and not a personal loan.

brody77

Thanks Paul,

I had a strong feeling that would be the case, sadly.

It would be great to downsize & save some cash, but I think you're right & I'm stuck with it for quite some time.

I'll need to check all the finance stuff & speak to them to see when I can change or give it back - that was a year I'd had it & if I hadn't taken out an extended warranty repairs for the service/MOT would have cost me over £3000 as it needed a new gearbox.

It seems utterly pointless having such a big car when my office is literally only 3 miles from home, but such is life, I guess!

I had a slim hope that dealers would try to bend over backwards to help me just to get a sale, but with this negative equity thing they'd probably have no chance.

forgotmyname

How much negative equity did you have? You might not have actually paid anything off on the car you have now, Could still be paying for the old one.

As they say Finance the only thing on your car that lasts forever.

brody77

I'm not sure, to be honest. Finance paperwork doesn't mention negative equity, just gives me totals.

motorguy

brody77 wrote: »

I'm not sure, to be honest. Finance paperwork doesn't mention negative equity, just gives me totals.

Thats why i said you need to ring the finance company and ask them for a settlement figure - this will give you the total you owe right now.

Then find out what your own car is worth - either via asking on this thread, or checking prices of similar cars.

If you owe more than its worth, then you will know the amount of negative equity.

motorguy

forgotmyname wrote: »

How much negative equity did you have? You might not have actually paid anything off on the car you have now, Could still be paying for the old one.

As they say Finance the only thing on your car that lasts forever.

you're confusing the issue by saying 'could still be paying for the old one'.

There is ONE agreement here against her current car.

This may have been for more than the car cost, but the remaining amount owed will be against the current car.

brody77

pgilc1 wrote: »

There is ONE agreement here against her current car.

QUOTE]

Who you calling her haha!!
:rotfl:

Actually got a phone call from my local Renault dealer last night due to some promotion they are doing & they've invited me to go in to see them over the weekend.
I did advise regarding the negative equity etc, but they said they could investigate it all for me.

Not getting my hopes up by any stretch, but can't hurt to ask I suppose.

Need to dig out the paperwork tonight & ring Santander.

jd82

The Luguna looses money very quickly and this probably the reason for negative equality. The cheapest thing would be to keep the car and just live with it, because big cars are not worth much.

brody77

jd82 wrote: »

The Luguna looses money very quickly and this probably the reason for negative equality. The cheapest thing would be to keep the car and just live with it, because big cars are not worth much.

My concern though is that, given the cost on the last MOT/Service, having the 05 Laguna could cost me way more in the long run.

As I'd said, the cost of work just there was £3000 which has put me at the maximum claim for my warranty.
This means that any future work will all be out of my own pocket.

All that said, I may not have any choice in the matter, unless I was able to get a loan & buy the car outright then get rid of it.

All just speculation really.