Car on finance: Can I somehow reduce my payments?!

needstochange_2

Hello, im looking for some advice about my car that we have on finance. we have 2 1/2 years left to pay at £168 a month and would really like to reduce the outgoings as much as possible. My husband took out the HP on this car about 2 years ago (without me knowing!) and needless to say i was v annoyed at the time. he has also told me that we are locked into the contract until its paid off but im not sure if this is true?!
can we for instance, take it to a dealership and downgrade to a cheaper car with a lower monthly payment? or get rid altogether?
I had a quote from the finance company stating that we’d have to pay £4500 to cancel the contract. Any advice would be much appreciated as I’m so confused!!

TonyMMM

You could possibly trade in for something else, but whether that will be a good option (or save any money) is dependant on lots of factors...more info is required:

What is the car ?
Amount financed, and amount left to pay ?
Value of car now (realistic) ?
Type of deal .. is it a personal loan, HP, Personal lease contract etc. ?

LandyAndy

Sounds like you are about half way through a five year deal. If it is an HP agreement and there isn't a final balloon you could be getting close to doing a VT. Whether that would be worthwhile depends on your particular circumstances.

gambit27

A friend of mine is in this situation at the minute, and can't even trade in her car! Another asked the finance company if they could give the car back, and was told no, the car's not worth what's left on the agreement. I personally think a car loan is like a noose round your neck, I paid one off 2 years ago and vowed to never get one again. If it's a fixed loan agreement, you won't be able to reduce it. The only option really is to trade the car in, but as Tony says, this will really depend on what your car is worth now.

birkee

Talk to the finance company about taking out a new loan, for the remaining value of the car? It will extend the repayment period, but at a reduced rate.
Not sure whether this is possible, but the answer is a phone call away.

needstochange_2

thnak you everyone for your helpful replies!
its a 5 year old vauxhall astra, bought for £7500 (approx!)
and with £4500 still to pay off :mad:
its a HP deal, and i hav no idea how mcuh the car would be worth now, ill have a quick look.
stupid husbands!
whats a VT?
i see what you are all saying, it may be better value for money ?!!!?!? to carry on paying for the next 2 years and then sell the car at the end

Inactive

needstochange wrote: »

thnak you everyone for your helpful replies!
its a 5 year old vauxhall astra, bought for £7500 (approx!)
and with £4500 still to pay off :mad:
its a HP deal, and i hav no idea how mcuh the car would be worth now, ill have a quick look.
stupid husbands!
whats a VT?
i see what you are all saying, it may be better value for money ?!!!?!? to carry on paying for the next 2 years and then sell the car at the end

Voluntary Termination.;)

forgotmyname

HP, VT you must have paid half the amount off. If it was a personal loan it wont work though.

5 years old, Selling it may not be worth the amount you owe on the finance, So still left owing them money.

That will leave you with not much chance of swapping it for a cheaper car. Only option would possibly be
part exchange for another car and they add the balance of the finance onto a new deal.

eg.. part ex your car for £3500 leaving £1000 to pay the finance.
Buy new car for £1000, they then add £1000 to that and come up with a new finance deal for £2000.

It maybe cheaper montly payments but you will be paying it for 5 years, Where the current deal will end
in 1 1/2 or 2 1/2?

wba31

As previously mentioned, voluntary termination can be sought once you have paid 50% of a HP back. this factsheet produced by National Debtline contains some really useful information about HP

http://www.nationaldebtline.co.uk/england_wales/pdf/16_hire_purchase_debt.pdf

I did some stuff at work the other week about applying through courts for a Time Order to reduce payments... But you got to be in a position where you really are struggling to pay... it might be worth speaking to one of the 3 debt charities about that (CAB, CCCS or NDL)

fadetogrey

If you dont actually need a car you could stop the monthly payments and let the finance company repossess the car.After that they will sell it for what they can get for it and you will be liable for the rest.It may reduce you payments and length of time left to pay but it may also affect your credit rating,sorry if its not much help but at least it would let you keep more of your own money.

RaCinG_SnAkE_3

fadetogrey wrote: »

If you dont actually need a car you could stop the monthly payments and let the finance company repossess the car.After that they will sell it for what they can get for it and you will be liable for the rest.It may reduce you payments and length of time left to pay but it may also affect your credit rating,sorry if its not much help but at least it would let you keep more of your own money.

Sorry, but I don't think this is a good idea. There is probably a clause in the contract that administration costs will be made for late payments, plus recovery of the vehicle, plus auction commission on the sale.

By the time all is said and done you will possibly still owe the same amount, but without a car. In addition to this you're credit rating will be ruined so you won't be able to apply for anymore loans to get another car.

My approach would be to write to the loan company and ask for a settlement figure. In my experience, most companies would rather accept a lump payment to settle a loan early than let it drag on. That way, they've got the money to lend out to someone else!

I know you said you've a quote from them for £4500, but you need to get an exact figure in writing, plus a time period that this is valid for (usually 31 days).

Once you've got a figure, have a hunt around for a loan with a decent APR (you're bound to be able to get one cheaper than the car finance people). Have you tried looking at ZOPA?

Good luck!