Need to get rid of car on finance within one month

anxiousjobber

Hi
My boyfriend bought a car on finance about half a year/nine months ago. However, we have since had problems with our flat and want to move to a flat that is closer to work for both of us. When we move, we will need to pay more rent (our flat was cheap), and won't be able to afford the car, but since we will be close to work we won't need it anyway. Even if we lowered the repayment figures, we'd be paying for a vehicle we would no longer use. So we need to get rid of it.

Our first thought was to borrow his settlement figure (about £8,500) from his parents, pay off the finance, then sell the car. It should go for around £7,000/£7,500. That would go straight to his parents, then he would then pay back what he still owed in instalments. However, his parents can no longer afford this, and neither can mine.

So what are the options available to us to get rid of this car? He has not yet paid 50% of the value so he cannot just give it back to the finance company. Is a bank loan the best way to go? How quickly do they usually come through? We want to move next month.

System

please ignore

forgotmyname

You can get a loan approved and sorted in a few days. But what will the interest rate be?

How realistic are you in the selling price? Is it really worth £7000? Are your finances good enough to get a bank loan at a sensible rate?

Although you will get less money, Selling it to a dealer and paying the finance will mean a much smaller loan will be required.

wba31

Have a read through this on dealing with HP debt.

http://www.nationaldebtline.co.uk/england_wales/pdf/16_hire_purchase_debt.pdf

If you need further advice you should ring National Debtline or go to your local CAB who can give short term advice on dealing with this...

anxiousjobber

Hi, thanks for your replies. My boyfriend has checked how much his car goes for on private sales, and it seems to go for £7,000 - £7,500. We think he will get a lot less if it is through a dealership, but it's definitely an option. I like the idea of a smaller loan, although presumably he needs to pay the settlement figure before selling to a dealership, or elsewhere for that matter? He doesn't have the money to do that I'm afraid. Or could the dealership pay directly to Black Horse and then he gets a smaller loan for the difference?

As for his personal finances, I don't have a clue. We have always paid for everything separately and kept our finances to ourselves. This is the first time his financial situation has ever impinged on me. I believe he has a poor credit rating, having been in debt in his early 20s, but he hasn't been in any debt in quite a while, certainly not in the 3 years we have been together. He is on a relatively good wage - at least £22k - but because he wanted a fancy car, he's paying hundreds on it every month *tuts*. I think that, for that reason, he is in his overdraft. Will his credit rating and the fact he's in his overdraft make any difference to his interest rate?

Sorry, I've never even taken out a credit card so this whole thing is very confusing for me! I just don't want us to move house without me knowing the car and the finances are gone, otherwise I'm going to be panicking about it!

forgotmyname

The dealership will pay the finance company directly. You just need to pay the balance at the same time or within a set time afterwards.

The finance company will tell you how quickly they need the payment.

Poor credit rating will have a negative effect on the interest rate offered.

Not just the overdraft but his outgoings compared to his incomings in general.

epninety

You can sell the car privately, with the purchaser paying the finance company directly. Either you pay the surplus over the selling price to the finance company, or the seller pays the surplus over the outstanding finance to you.

Just be up front with any prospective purchasers, so that no-one has their time wasted. e.g. if a purchaser runs an HPI and it shows finence outstanding, they might be put off if you don't explain beforehand.

I bought a car this way a few months back. No problems, all done over the phone with the finance co.

mountainofdebt

The dealer may be able to pay the finance company direct; if you have a settlement figure then all you would need to do is to pay the dealer directly the difference between the price that they give you for the car and the settlement figure

gilbert_and_sullivan

Anxiousjobber this is not meant to offend but protect yourself by not guaranteeing any payments or taking a debt on yourself to service this sale.

In line with this it would be better to have a smaller loan even if it means selling for a lower price.

People do get carried away with the value of their houses and cars, its easy to sell a car privately up to a few thousand but when you get to the figures mentioned buyers are wary and few people walk around with £7k in their wallets.

Could he continue paying for the car and maybe use it as the one car (sorning yours for a while?) till 50% is paid and then hand it back.

keith1950

Our first thought was to borrow his settlement figure (about £8,500) from his parents, pay off the finance, then sell the car. It should go for around £7,000/£7,500.

Hi, you have got to be realistic about what you can expect to get for the car.

If you try to sell it privately , how many people nowadays can afford to fork out around £7500 cash for a car with no guarantee?

If you try to sell it through a used car dealer remember that they will expect to make around £2000 when reselling it because they have to give some sort of guarantee with it.

Have a look a forecourt prices for this make and model then deduct £2000 from the sale price and you will get the approximate price you can expect to get for the car.

You need to go through a reputable dealer that deals on a daily basis with the car finance companies.

Once you have a accurate figure for difference between what you will get for the car and the £8500 settlement figure a personal loan would appear to be the easiest option. ( Depending on his credit rating .)