Handing back viehicle on HP over 50% of payments

rtho782

Hi,

I have a Motorbike on finance with Black Horse, purchase price ~£6000.

Once I get to 50% of the payments in a years time, it is my understanding that I can hand the bike over to them and the contract is simply ended, and that this doesn't count as a default.

This tempts me just because it means I can have a new bike in a years time, especially as I will probably be able to buy the bike back at auction for less than the settlement figure if I wish, but I'm worried that Black Horse might then decide they do not want to lend to me anymore!

Would this normally prevent me from getting finance with them again?

jonesMUFCforever

Is it HP or a personal loan?
If it is a loan you cannot hand back the vehicle.

If I were Black Horse would I want you as a future customer - the answer would surely be no.

What is your credit score like? Unless it is good you may not get new finance.

rtho782

Hire Purchase, Black Horse only do secured finance now not personal loans!

Like I say I have no issues with keeping it, and this isn't a possibility for a year or so, by which time my only credit issue (1x default in 2006) will be gone.

I'm not thinking "I can't afford this bike", I'm just thinking this gets me a new one sooner (otherwise I will just buy a new one once this one is fully paid for)

blacksta

Why buy the bike in the first place

rtho782

Because I wanted one!!!

People tend to replace bikes quicker than cars... I do not regret buying this one I am just exploring options

blacksta

At 50% you would have paid back roughly £4000 or even more . Wasting that kind of money for some one who visits MSE make no financial sense. Next time maybe go straight to an auction buy same for a quarter of price.

chanz4

dont forget its 50% of the total inc intrest

rtho782

It's 0% APR.

Halfway through I will have paid ~£3000 and have ~£3000 left to go.

If the bike is at that time worth less than £3000, and I decide to buy a new one for, lets say, £8000, it surely makes more sense to hand it back and buy a new bike on finance rather than part ex the old bike worth say, £2500, and take £8500 finance on the new one to cover the "negative equity".

I'm just wondering if the hand-back will adversely affect my chances of refinancing a new bike, probably with the same company as Black Horse work with most dealers, or not, as it does not count as a default on my credit file.

KingElvis

Some people say a VT on your record counts against you, some disagree.

I would be tempted to say that it would if you started doing it every few years.....don't forget, these companies are there to make profit

rtho782

Exactly what I wanted, thanks!!!