DMP & Car Finance

BabyBear8

Hi all

Another day, another question!

We're considering a DMP & it looks likely that we'll proceed.

However, my Husband has a car allowance paid as part of his salary by work which we use to pay for a PCP on a car. The car is required as part of his role as he regulary travels for work to see clients.

We are nearly halfway through the 3 year PCP & it will finish around a year to 18 months before the DMP finishes.

We're going to be left with a balloon payment of circa £7000.00 at the end of the PCP. We can:
1) Hand the car back with nothing owing but then we'll need to find a new car for his work but will obviously struggle to get finance anywhere for a new car
2) Pay the balloon payment or re-finance the payment owing & keep the car but again we'll struggle to finance the £7k
3) We could look to give the car back & walk away with the intention of taking up a lease deal elsewhere

Has anyone had any experience of this type of thing when on a DMP? Its the only car we have & its essential for his work so its something we can't live without.

Thanks in advance

Tixy

I'd talk to your DMP provider for some advice (hopefully its a free/charity one?). Is your DMP only predicted to last 3years?

Taking on new credit during a DMP is against the terms of the DMP, and your credit files will likely to be too shot to be able to get new credit.

You may be able to negotiate option 2 so that you pay the balloon payment in installments to the same loan provider - which shouldn't cause an issue to the DMP terms (but would be dependant on the loan provider being willing to do and probably dependant on them not running a new credit search).

Aside from that maybe he could speak to his employer at the time to discuss if it would be an option that they provide a car to him rather than a car allowance.

The only other option I can think of is that you try to put some small savings aside during the DMP (by spending less than budgeted where you can) and use that to buy a cheap runaround for him to use - either for the rest of the DMP or for a few months whilst he saves up a few months of car allowance to be able to purchase something better.