Car Finance - My mistake and way out.

marco_79

Hi Folks,

I'm looking for some advice on a car I purchased less than a month ago.

I bought a luxury Range Rover 4x4 for £38,600 last month taking out £31716 in finance with the rest from a trade in plus cash.

The deal is 9.4% APR with 35 monthly payments of £602 per month and the 36th payment is £17485. Estimated value at month 36 is £20k. The first payment comes off on 31st Dec.

The thing is I think I may have made a mistake in paying this much per month for a car. My last car was bought cash and although I like this car a lot I'm struggling to justify paying this much for a car. The road tax is £475 per annum, tyres about £200 a corner and does little over 25mpg. I do about 5000 miles per year.

We were saving about £500 per month so budget wise we can afford this car it just means we aint saving much if anything.

I'm seriously thinking of selling the car and taking a hit. We buy any car have offered £37715 for it valid for seven days. This would mean a hit of around £1500 once I had handed back the road tax.

As I haven't yet made a payment will the early settlement be more than the principal? Loan amorisation tables show a balance about £300 less than the prinicipal after the first payment.

Everybody is saying what a nice car I have and yes I work really hard and have a good wage but I have came from nothing and don't feel comfartable with this much debt and not being able to save as much as we could otherwise.

Half of me says you have one life live it and the other one says this could be put to better use. I know this is my decision at the end of the day but I would appreciate some views.

Thx Marco

Apples2

I struggle to understand why anyone would choose to run such a car when it is being funded out of your own pocket.

It isn't always about being able to afford it, it is about justifying the expense.

I toyed long and hard about my last purchase. I wanted a good car and could afford it but researched the thing to death before deciding. I chose a 530D.
The 535D was my preferred choice but with such expensive brakes, tyres etc I simply couldn't justify it.

It seems you made your mind up before going through the process I went through before I made my choice.

A £1,500 loss in my mind, would be worth taking the hit. You will have some HUGE bills in front of you no matter what your warranty is like. A couple of big services will soon eat that up, not to mention the running fuel costs.
http://www.fuelly.com/car/land%20rover/range%20rover%20sport

chris-j

Why don't you speak to the dealer you bought car from.. If they offer you less you have the wbac offer anyway.
Should you do it or not is your choice, but if you do now is the time.
remember as time progresses the value will drop more sharply, hit January and it becomes last years model. Also in month 36 you need to either have a spare £17.5k available, trade in or refinance.
You are also technically having to find an extra £102 in addition to no longer saving.

marco_79

Thanks.

I did plenty research nearly two years worth. I went into this with my eyes open but it still doesn't feel right. It was serviced two months before I got it and next years service is free. It has 16 months a LR warrenty left then WD will be around £600 pa.

I agree with your affordability versus justification arguement. Its the balance you need to find between the two. I could have bought a nearly new focus eco drive and paid next to nothing a month with the same deposit but like you I wanted a decent car. But now I don't feel the same, I must admit I will take a fair bit of stick from work mates if I get rid of it this quick, starting to think its still the right thing to do though and really dont care what anybody else thinks.

TY

Apples2

marco_79 wrote: »

I must admit I will take a fair bit of stick from work mates if I get rid of it this quick,

One of ours turned up with a new Range Rover, trust me, we gave him so much stick for owning a Chelsea Tractor/Hairdressers car we were all disappointed when he got shot of it so quick.

Nobody battered an eyelid when he complained about filling the thing up every time he went out in it.

chanz4

Will webuyanycar take it, with outstanding finance?

CrazyAngel_3

Wsa the agreement executed less than 14 days ago?? This is very important. If so you can exercise your right of withdrawal and be released from the deal and the car returned to the finance company.

johnmc

Check your purchase agreement. I think you'll find it's not your car to sell until you've paid it off.

CrazyAngel_3

You are correct Johnmc, but the vehicle can be sold through the trade so that the trader will settle the finance direct. Only a sale to private individual would not be allowed.

Apples2

CrazyAngel wrote: »

Wsa the agreement executed less than 14 days ago?? This is very important. If so you can exercise your right of withdrawal and be released from the deal and the car returned to the finance company.

That just releases the buyer from the finance, not the purchase. The car would have to be paid for by other means.

AHAR

Apples2 wrote: »

Nobody battered an eyelid...

Glad to hear it. That would have been either completely disproportionate...or weird.