Changing car during finance agreement

DBGage

I have completed 1 of 3 years of my finance agreement on my car with Black Horse Finance. I have just lost my job and currently my car payments are £237 a month. I would obviously like to reduce my direct debits as much as possible. Is it possible for me to trade in my car to get a lower monthly repayment plan? If so can it be with any car dealership? Will there be any extra fees for me to pay?

Ben

LandyAndy

DBGage wrote: »

I have completed 1 of 3 years of my finance agreement on my car with Black Horse Finance. I have just lost my job and currently my car payments are £237 a month. I would obviously like to reduce my direct debits as much as possible. Is it possible for me to trade in my car to get a lower monthly repayment plan? If so can it be with any car dealership? Will there be any extra fees for me to pay?

Ben

Is it an HP agreement? Is it 36 equal installments or is there a 'balloon' payment at the end?

forgotmyname

Extra fees yes. Your unemployed so new credit will be a no.

Your current car is worth less than you may think and probably worth less than you owe on it. Thats a problem.

So if you sell the car and pay towards the finance, You may still owe the finance company.

Then that leaves you with no money to buy another car. And you may need permission of the finance company before you sell it.

You wont be able to simply drive into a garage and drive out with a smaller car and pay less money.

What is the car? Exact model, Engine, Year, Mileage?

How much do you owe on the finance. Personal loan? HP? other?

Monthly payment and exactly how many payments have you made?
Any savings to put towards this?

Sounds nosey but without all the facts people wont be able to advise you properly.

DBGage

Yes it's a HP agreement.

What is the car? Honda Civic 1.8, Year - 2006, Mileage? 40k

How much do you owe on the finance. Personal loan? HP? other? I owe around £6000

Monthly payment and exactly how many payments have you made?

As I said the monthly payments are £237, so I have paid 2,844 of the around £8000 agreement.

I have savings yes but obviously that is my cushion while I'm unemploed so I don't want to touch it.

motorguy

DBGage wrote: »

Yes it's a HP agreement.

What is the car? Honda Civic 1.8, Year - 2006, Mileage? 40k

How much do you owe on the finance. Personal loan? HP? other? I owe around £6000

Monthly payment and exactly how many payments have you made?

As I said the monthly payments are £237, so I have paid 2,844 of the around £8000 agreement.

I have savings yes but obviously that is my cushion while I'm unemploed so I don't want to touch it.

Finger in the air stuff here, but i'd say your car is worth a bit over 5K - assuming its a well spec'd 1.8.

Your finance company will give you a 'settlement figure' which will usually have some of the interest charges deducted. I'm guessing you probably will owe around £5250-£5500

You would be much better to advertise it privately and have the buyer pay the finance company direct - and you pay any remaining balance too from your savings.

Buy a cheap banger at £300-500 to see you over until you get a new job.

forgotmyname

I would say a bit under 5k, Especially when buyers find out its on finance.

So you probably still owe a fair bit more than its current value.

The problem is the cars not going to gain in value. Selling it now and cutting your losses maybe the best option.
Selling it right away may save you a few £ in interest charges.

You need to do the maths. But you need to seriously think about selling now and paying it off before it drains your reserves.

Paying 6%? interest on a loan when your earning 2% interest on savings is usually not ideal.

motorguy

forgotmyname wrote: »

I would say a bit under 5k, Especially when buyers find out its on finance.

So you probably still owe a fair bit more than its current value.

The problem is the cars not going to gain in value. Selling it now and cutting your losses maybe the best option.
Selling it right away may save you a few £ in interest charges.

You need to do the maths. But you need to seriously think about selling now and paying it off before it drains your reserves.

Paying 6%? interest on a loan when your earning 2% interest on savings is usually not ideal.

Actually you're right - slightly under £5K is likely, unless its an EX or something. I thought all 1.8's were high spec but i see SE's are common with that engine size too.

My calculations are that the settlement figure is maybe going to be £5250-£5500. I would definitely flog it and use some savings to clear the difference.