Downgrading a Car on finance?

falko89

How does this work exactly? A couple of years ago we traded in our old car, got something like £3k for it which was put towards a new car costing £9k, anyway I've lost my job and can't afford the repayments so what do we do?

Well over half the car is paid for, maybe another year left on finance. We need a car as live in the country, no car = wife has no job. Could we return the car and use whatever its worth to buy a car at say £1k?

Sorry bit clueless about all this.

iolanthe07

You need to look at your credit agreement to determine what kind of finance you have. If it is Hire Purchase you can voluntarily terminate when you have paid back half the loan or more (but only if you have never missed a payment or been tardy in paying on time).

falko89

iolanthe07 wrote: »

You need to look at your credit agreement to determine what kind of finance you have. If it is Hire Purchase you can voluntarily terminate when you have paid back half the loan or more (but only if you have never missed a payment or been tardy in paying on time).

Yep always paid on time and never missed a payment, but then surly we are just giving the car back? Do we get the difference back? I mean if we have paid 80% of the car and hand it back is that it gone, no money back?

Chapsy

If your car is worth less than you owe and the agreement is a Hire Purchase then you should Voluntary Terminate. If you owe less than what the car is worth then sell it, settle the finance and keep the equity.

pure_dead_dopey

why don't you ask the finance company for a settlement figure, if the car is worth more then sell it privately and pay the settlement figure and use the surplus for a new car?

falko89

pure_dead_dopey wrote: »

why don't you ask the finance company for a settlement figure, if the car is worth more then sell it privately and pay the settlement figure and use the surplus for a new car?

I thought you couldn't sell a car while it still had HP owing?

Chapsy

falko89 wrote: »

I thought you couldn't sell a car while it still had HP owing?

You can sell the car as long as the HP is cleared. So if you sell for more than you owe then pay it off and use the equity for a new car. If you owe more than you can sell for then VT, As long as it's a hire purchase.

falko89

Great, think thats what we'll do then