Car Repossession Advice

layfs

Hi All

Looking for some good sound advice surrounding the best route forward in dealing with Santander Car Finance.

I am currently in financial difficulties after many years of living to excess off a very large salary.

Last April I quit a well paid job for what was going to be an even better paid one. Part of the package was either a company car (4 year old Audi) or 500 pounds per month car allowance. To save on income tax I took the car allowance and went out and purchased a car on HP. The total amount was 24,000 less a 1,000 pound deposit. I spread the payment over 5 year making the monthly amount 450 per month. The total amount payable was 28,000 however I never had any intentions of keeping this vehicle for the full 5 years and intended to VT once I had repaid 50%. This i felt was clever as I travel in excess of 40,000 miles per year and my cars depreciate faster than Nick Clegg's approval rating.

Here come the bad bit. My annual income since April 2012 has significantly fallen off previous years figures and my wife has given birth to twins and is no longer working. This has left us with little to no money each month once bills have been paid and with some unforeseen additional expenses I am now behind on making payments to my creditors including Santander for the car.

I have spoken with Santander and explained the situation. I have also been able to demonstrate within the next 3-6 months our situation will have improved slightly however as I am not 30% through making the payments they are unable to work with me on any type of repayment plan. If the status quo remains the car will be repossessed within the next 6 weeks.

The advice I am looking for is regarding would would be the best route forward. I have spoken with Santander and I can still VT up until a default notice is posted (1 weeks time) or I can wait for them to come and take the car away. Unfortunately there is a shortfall in the value of the vehicle and the outstanding amount 20,000 of around 8,000 depending on what it fetches at an auction.

If the car goes back and i use a company vehicle I will have to take a salary sacrifice of 500 per month so am not really better off financially.

Tixy

Hi

If your main financial difficulty is only the next 3-6months and you cannot VT yet I would consider looking if there are other items you can make reductions / savings on to see you through the next few months. It might be worth preparing a statement of affairs and posting on the Debt Free Wannabe section of the forum. People may be able to suggest places you can reduce your outgoings by things such as switching providers/ changing where you shop / cutting back to get you through the next few months.

Do you mean that switching to a company car will result in you losing not only £500 car allowance but also £500 in salary sacrafice? ie you will be £1000 less in your pack cheque each month? or just that you will lose the car allowance? so £500 less in to your bank?

layfs

Just to clarify....it would just be the 500 I lose from my monthly wage.

Thank you for your advice. I have made arrangements with my other creditors to pay just 5 per month for the next three months. This still leaves me with issues making the full monthly payment for the car.

Tixy

Have you recently checked things like your Gas & elec bills are on the cheapest tariff / cheapest supplier? Checked if you have a large credit balance built up with your utility supplier you can request back?
Have you checked if your mobile contracts could be reduced? Check if you could switch landline & broadband to a new provider and make a saving? Checked if your life insurance & other insurances are competitive?
Have you checked you are getting any benefits you are entitled to - especially with the 2 new additions to the family?
Have you looked through to see if there are things you could cancel in the short term (gym memberships/hobbies/SKY tv etc)?
Have you tried reducing your fuel usage - Cheap Petrol & Diesel Cut your fuel spend by a third

Have you tried cutting back on spending on groceries etc - Supermarket Shopping Downshift & more, halve weekly bills

Have you been through each item of expenditure to consider if you can reduce it? Thats what I would recommend if you are at risk of your car being repossessed.

layfs

hi yes to all of the above. Thank you for the advise. I have actually not had life/house insurance for 6 months now (this needs to be resolved soon as well). I do not pay fro fuel as i have a company fuel card, sky has been cancelled and we are now on a cheap 7 pounds per month line rental. Gas and elec are paid DD and were reviewed recently.

What is surprising is that apart from child benefit only 150 per month to my wife we are not entitled to any other benefits. My income is still above average for the country (45-50k) so guess we shouldn't really be in this situation but are probably paying for living beyond our means.

What i really want advise on is if we are unable to not make the car payments taking into account the amount still outstanding would it be best to VT or wait for it to be repossessed.

rs65

Have you thought about trading it in against a much cheaper car and keeping the car allowance? You would get more trading it in than letting the finance company auction it.

layfs

I don't think I would get any credit for a cheaper car as I am behind on my payments.....

poppasmurf_bewdley

layfs wrote: »

Hi All

Looking for some good sound advice surrounding the best route forward in dealing with Santander Car Finance.

I am currently in financial difficulties after many years of living to excess off a very large salary.

Last April I quit a well paid job for what was going to be an even better paid one. Part of the package was either a company car (4 year old Audi) or 500 pounds per month car allowance. To save on income tax I took the car allowance and went out and purchased a car on HP. The total amount was 24,000 less a 1,000 pound deposit. I spread the payment over 5 year making the monthly amount 450 per month. The total amount payable was 28,000 however I never had any intentions of keeping this vehicle for the full 5 years and intended to VT once I had repaid 50%. This i felt was clever as I travel in excess of 40,000 miles per year and my cars depreciate faster than Nick Clegg's approval rating.

Here come the bad bit. My annual income since April 2012 has significantly fallen off previous years figures and my wife has given birth to twins and is no longer working. This has left us with little to no money each month once bills have been paid and with some unforeseen additional expenses I am now behind on making payments to my creditors including Santander for the car.

I have spoken with Santander and explained the situation. I have also been able to demonstrate within the next 3-6 months our situation will have improved slightly however as I am not 30% through making the payments they are unable to work with me on any type of repayment plan. If the status quo remains the car will be repossessed within the next 6 weeks.

The advice I am looking for is regarding would would be the best route forward. I have spoken with Santander and I can still VT up until a default notice is posted (1 weeks time) or I can wait for them to come and take the car away. Unfortunately there is a shortfall in the value of the vehicle and the outstanding amount 20,000 of around 8,000 depending on what it fetches at an auction.

If the car goes back and i use a company vehicle I will have to take a salary sacrifice of 500 per month so am not really better off financially.

I haven't had a single penny income since April 2012! :beer: