Car Finance Advice?

kazyyy

Back in 2010 I bought an 07 Corsa on finance with Santander over 60 months.

I know now that such a long term was a big mistake, but I needed car that was cheap on insurance, tax, fuel etc and I was in quite a badly paid job. I didn't have any money to buy a car outright.

The monthly repayments are £176.54 and I have just about 3 years left on it. The debt outstanding is £6202, though if I was to settle today it would be around £4500.

A relative who is in the car trade, has valued the car at around £3800-£4200, meaning the car is in negative equity.

It is really a noose around my neck at the moment, and since I'm now in a better paid job I don't want to spend the next 3 years paying for something that really isn't worth the money.

The car seems to be jinxed, it's been crashed into 3 times when parked (twice on a residential road, once in a car park), my partner almost ripped the bumper off reversing out of a space as it got stuck on the kerb and ripped one of the fog lights off, in the last month I've had 2 punctures and replaced the same tyre at £70 a pop, and in the last 3 months the alternator has gone (£370).

I really feel like it's cursed and just want rid. We have another car on finance, which we took out at Xmas and will be paid off by Xmas 2013, so one decent car that isn't in negative equity.

Any suggestions?
My daily commute is 66 miles, so can't really afford to take my chances with a cheap few hundred quid runaround.

:embarasse

SeanG79

Are you looking to get another car on finance?

While you are in a better situation financially now, are you able to take the hit with the negative equity?

There is an option depending on credit searches and income that you can take a new car on finance with Santander and incorporate the negative equity into the new agreement, if you then have the finance over a shorter term you will reduce the time spent in negative equity

glasgowsaver2011

I am not sure what you are asking,

the car is worth less than the finance, it appears to be a good car - more so now there are replacement parts fitted - you need a car to get to work.

I would keep it till it is paid off.

Derspite what you are told the car is worth, unless you have an offer for that figure for the car, it may not be worth that.

I sold a car last year for 3200, it was worth (according to web and valuations) 4200, but no one offered that.

I would stick with what you have got.

Unless you want to trade it in against a new car......with the same garage and finance compnay

forgotmyname

Unless you pay a huge deposit a car will usually be worth less than you owe on it for at least half the agreement time.

In a year or so the car will be worth the same as you owe, And after that it will be worth more.

If you cant afford to pay the car off then just keep paying until you can.

Your relative in the trade seems to be overpricing your car. Plenty of 2008 cars for less money.

Probably ex driving school or motability cars

LaughingLorna

Do you have a break clause or gap insurance for the finance? my agreement had a break after 3 years where i could either take out new finance on the same car, walk away completely (essentially a three year rental/loan car) or trade it in at a guarunteed price against a new car. I paid £40 for gap insurance so that if i wrote off the car before i was paid up. they would accept in settlement whatever the market value was for my insurance.

you could try refinancing with same place on a smaller/cheaper/nearly new car to absorb some of the negative equity as suggested in previous post and you wouldnt have the VAT hit on a nearly new car. you could then (if your credit is good enough) take out a bank loan to pay off the cheaper car. basically restructuring the debt to give you lower monthly payments (however debt may be more expensive in the longer term). i used the latter technique to give me enough money in the month to service my debts...although i'll be paying them off for longer i dont need any sort of debt management plan if i carry on the straight and narrow.

i agree that car is only worth what someone will pay but was the value quoted by your friend a trade buy/trade sale/private sale value? trade will buy at lower price point but their sale price will be higher than private sale. worth exploring if you can use train or car pool instead. i wouldnt like it. my car = freedom but its an option for you...

rising_from_the_ashes

Unfortunately cars do depreciate so if you sell them early on (before this can balance out), you will lose money.

If you have paid a big chunk as a deposit, then this is where you'll probably end up losing the money if you trade it in (as you would want to clear the outstanding finance) - or if you haven't unfortunately you end up
with a car worth less than the outstanding finance as you've found.

By the time you've settled this finance deal, you'd have to make up the difference and then have nothing to put down on the next one, so you'd be back to being in the same situation but probably owing more money (presuming you'd be getting a newer/more expensive one).

I'm afraid you can't blame the bumper/light incident of punctures on the car - they could just as easily happen to a new one!

You'd be best to keep it until it's worth the amount that's left to pay on it and, even then, if you can a bit longer so you do have a bit more to put down on the next one.