Caught In A Loop with car finance

Kenshi

Hello to all that are reading this and merry christmas, i am living in hope that these forums may shed a little more light onto my peculiar situation as i have found this site very handy for financial issues many times before so here goes.

In a nut shell 2 years ago i decided to go for a new vehicle which i had on a 0% finance scheme from an original dealership, 18 months after paying for this vehicle my life situation changed. I decided to go self employed and change this original car for a van alot more suited to the job/life balance and this was done without a problem.

I also decided to go back to college to get a few essential pieces of paper this obviously reduced the amount of hours that i could work and i was told with regards to this i could get no financial help as i am a mature student.

My working hours are at the minute approximately 15Hrs per week and after costs and reductions i bring home about £280 a month this is guaranteed work through another company.

Work i was suposed to be setting up for myself was in the pipeline and was going well until... someone decided to smash into me and my van at 40mph about 2months back. As a result of this i have lost out on a couple of thousand £ because i was unable to do certain aspects of work with damage to my lower back so heers where my problem lies...

It is now obviously christmas time of year and as a property developer the chances of getting work go very slim in the run upto and directly after christmas meaning not much potential for work just my guaranteed £280 a month.

after all standard rent tax and living costs even with support from others etc i have to spend a month approximately 250 of which 110 a month goes to insurance and 220 goes to the monthly cost of my van, as you may have worked out those figures do not add up.

So taking the only cut i can bare in mind i dont smoke,drink or waste any money anywhere and am quite financially careful i went to the garage regarding getting a cheaper more affordable vehicle atleast until the potential for work picks up again in the new year and heres what they said.

The vehicle i have originally was sold to me for 9800 of which 9300 is left to pay, the vehicle now is valued at 5500 but a sa gesture of GOOD WILL (id prefer the word insult) they will give me 6000 for it if i give it back to them this leaves £3300 of what they call negative equity.

Options i personally see open to me are as follows:

1) Give them back the van and £3300
2) Take out a bank loan ( if anyone will touch a man in my circumstances with a decent APR) and take it over a long enough period to lower the monthly payments to an affordable cost im aiming for about £150 at the max and the van currently costs me £220 a month
3)Cancel the direct debit meaning obviously at some point they will reposses the van and still want their £3300 which presumably i will pay back in weekly chunks and get a CCJ on my file.

I Still also have had no cmpensation for my injuries in the accident which i was involved in although i have been told this is a lengthy process and i wont be going for the medical until early next year which will be 3months + after the acident happeneing ( should i maybe ask my insurance company for an advanced payment?)

The easiest route would be for the dealership to supply me with a cheaper vehicle that i can afford for now but they say that they cannot do that and if they are to refinance me then i would have to have a vehicle at 4x the negative equity figure of £3300 so £13200 more than what im paying now and so it will end up more expensive on a monthly payment.

Sorry for the lengthy post but hopefully i have provided all neccesary inforation and im living in hope that someopne out there may be able to tell me something i dont know regarding this situation.

Your help would be most appreciated :j

piggeh

Have you asked the dealer if you can pay a lower sum over a longer period of time?

How much was the original finance agreement for? Did you sign a new agreement when you took the van?

kev84

The problem is the negative equity - i tried the same thing when i had about £1500 negative equity but they wouldn't refinance for cheaper car because it was too much to inflate the screen price by. I take it thats why they can only justify it on a van at £13000.

Have you looked at selling it privately? You will get a lot better price. Apparently,even though it is on finance, as long as you settle the finance within 24 hours of selling the car your'e OK. Don't take my word for this however, its just something i heard from my finance company.

Then maybe put the 1-2k on a 0% credit card if you have one??

Dr.Shoe_2

One piece of good news is is that it will take at least a month for them to "notice" that your DD hasn't been paid and if you cancel it the day after one's paid you have two months. Provided you have had a good payment record up to now then they'll se it as a blip and will write a polite letter. How long it takes you to respond to it is up to you ;-).

Kenshi

Ok firstly in reply to piggeh yes i did sign new paperwork when i took on the van from the original vehicle but im afraid asking for a longer period of time to pay wont happen because im already at the maximum 4 year period the original vehicle was £12000 but by the time id had that vehicle about £10,000 was left to pay.

In reply to kev yes the possibility to sell privately is a possibility but this will result in only getting what i estimate to be £7000 of the £9300 required meaning i still have to pay £2300 from somewhere maybe i could put this on a card if anyone would give me a credit card but with me being only the age of 20 and part time work/student this is unlikely and still ultimately even after those 2 things coming into place id be left with a debt and no vehicle not a situation i really want if i could avoid it .

Fianlly Dr.Shoe yeah i could play dodgy tricks to get around this but i think making the van magically dissapear or blow up would probably be a better idea although also this is not what i want although ironically if the woman who hit me in the accident had of written the vehicle off i wouldnt have any of these problems or if she hadnt hit me at all i wouldnt have it either just my bad luck i guess