How does it work??

CandyCupcake

Hi Guys,

Need some help! currently i have a car on finance which ends 13th July 2013. I am currently paying £331 a month.

Now, the newer version of my car comes out later this year - if I trade in my car for part ex I will only be paying £240.00 a month on the new car giving me more money spare each month aswell as a car for longer as it will only be less than a year old when purchased. Also VW have changed their models to make them cheaper to insure, so I will save on my insurance & the overall running cost of the car as the new car will be more economical - my current car is nearly 6 years old now.

I am just wondering if people think this is a good idea to go for the new one although it will still be on finance? And how does it work if you currently have finance on the original vehicle - first time ive ever had finance so don't have a clue how it works!

Any advice would be appreciated

Thanks,

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Tixy

Hi

Where is the figure of £240 coming from for the new car?

If this has been given to you by a dealer are they aware of how much you owe on finance?
How much do you owe? and what part-ex figure did the dealer give you for your current car?

MummyDrusilla

When you part-ex a car still on finance, the dealership takes on the finance and incorporates this into the new finance product. Effectively, they pay off the old finance product and give you a new loan.

You do need to inform the new dealer of your current finance situation before you can get realistic quotes for the new car.

We're currently weighing up the pros and cons of constantly paying out on finance. I'm of the mindset that it's better to own a car outright and have no ongoing dd's every month. My OH believes it's better to have a regular payment every month and know that every 3 years or so we'll have a fairly new car which is less likely to need sporadic expensive repairs than an older car.

On the one hand, our monthly outgoings are less as we only have 1 car on finance. On the other, we have no savings so if the non-finance car were to need repairs, we would have to find the money from somewhere.

camuk81

Financially you may be better off but at some point the loan will be worth more then the value of the car as even vw loose money the minute you drive off the forecourt.

Even with getting the loan you will have to pay an annual service (which they push is by vw) mot, tax etc.

Just as an after thought would leasing be a cheaper one payment like the other half wants?

National_Debtline

Hello there,

Do you know if your car is currently on a hire-purchase agreement or a fixed-sum loan?

If it is via hire-purchase you may potentially find it cheaper to voluntarily terminate - this is likely to depend on how long you have had the vehicle and what the terms of finance were.

The following is taken from our fact sheet on hire-purchase:

You have the right to terminate and end your agreement under Section 99 of the Consumer Credit Act 1974 at any time before your last instalment is due, although you will have lost the right to terminate your agreement if the creditor has already terminated it or if the full balance of the agreement has become payable.

If you decide to terminate your agreement voluntarily and hand back the goods to the creditor, you should only have to pay up to half of the total amount payable under the agreement, minus sums that you have paid and sums that are due. Sums that you have paid include any deposit plus the instalments that you have paid. Sums due are any arrears or missed payments due at the time of termination.

Information: The one half or 50% figure is stated on the agreement in the box headed ‘Termination: your rights’.In addition you will also owe any damages if you have failed to take reasonable care of the goods (over and above normal wear and tear). The creditor might argue that there will be an extra charge for damage or unusual wear and tear. It is important to look at any charges to see if they are reasonable.

It is very important that you tell your creditor in writing that you are terminating and ending your agreement. If you do not terminate in writing the creditor will not treat it as a voluntary termination and you will not be able to benefit from the 50% limit on your liability. Keep a copy of the letter of your termination in case you need proof of this later.

chanz4

Is this the MK7 golf you are referring to? i have the MK6 golf , the new design is horrible. The starting price is about £16k, it is a glorified polo looking car. Word of warning if it does not take off, like the new corsa hasnt you will loose a lot of money

CandyCupcake

Hi everyone thanks for all your comments.

chanz4, nope its not the golf i was referring too - it was the new beetle. its not yet out (late march, early april) so as i have only seen the car in pictures i wouldnt go and order one just yet! but thanks for that picture... i used to like golfs, not sure i do anymore after that!

National Debtline: Im not sure of the difference? I just know that whatever it is is that there's no lump some to pay at the end, and after July 2013 which is my final payment the car is then mine - no strings attached.

Tixy: I didnt have a true discussion with them about it tbh because i havent yet seen the actual car only pictures so we were working on rough estimates. I am probably best sitting down with them once Ive decided if i do actually want the car and getting exact figures. Because knowing what sales reps are like the figures will change dramatically when it actually comes to the deal!

Mummydrusilla: My current finance is with VW, who the new finance would be with. Dont know if this makes any difference?

CamUK: i have looked into leasing, however it works out around 450.00 - 500.00 a month, and they dont seem to lease beetles. that figure alone is higher than what im paying at the moment with insurance & finance on the current car i have. in an ideal world wait to pay this car off and then save, however my thoughts are that my own car will be worth alot less in just over a years time & could the new car be saving me money in the mean time.

I think i need to get exact figures and not just rough estimates and work from there. TBH im not generally a fan of buying brand new, so I may be better waiting for my finance to finish on this car, sell it privately and then by the new beetle at a year old and hopefully by then any faults - if there is to be any - would have been picked up.

Decisions, Decisions

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