Car loan reducing payments

leehal

I changed from having a company car for years to buying a Saab Convertible over a 4 year term with a balloon payment at the end.

I am currently paying £640 a month for the car which I can manage due to the car allowance I receive, I am however struggling to cover costs like road tax, servicing, tyres etc

I was told by the dealer that I could hand the car back to the finance company at the mid term of the loan which is in April 08, I felt I was able to stretch my finances until then and walk away, planning to buy a cheaper car.

I rang the finance company the other day just to check that this was the case and they said no, gutted is an understatement !

Rough details from memory are :-

Loan £32,000
Payments £640 per month
Term 48 months, balloon payment £8,000
Outstanding amount at the moment approx £26,000

Car value for part exchange £18,000

As you can see I have a whopping £8,000 difference between was a dealer offered me for the car and the outstanding finance.

I am undecided what to do next.

Any advice please ?

CLAPTON

what sort of finance deal was it.. if its HP then you can return the car after half the payments have been made.

Strangled

A friends father did the same thing, paid half of the payments, rang them to say he could'nt afford the repayments and handed the car back.
Went and bought another car...........on finance ????

leehal

CLAPTON wrote: »

what sort of finance deal was it.. if its HP then you can return the car after half the payments have been made.

I will have a look at the finance agreement and report back.

Thanks for the feedback so far.

nomoneytoday

You can do a voluntary handback after you have paid half of the loan.

If you borrowed £32k, then you can't voluntarily hand it back penalty free until you have paid £16k..

leehal

Thanks for the advice.

As far as I can see I have a standard HP agreement, I have written to the finance company to ask for a settlement date i.e. when I reach the 50% goal and can opt for voluntary termination.

I have also complained about being mis-sold the agreement by the dealer.

homer09001

i've been told this also buy Ford and Carcraft, that after half the term you can hand the car back and face no penalty fines or fees, if this is true do i face any marks against my credit score?

i bought a Peugeot 206 for £9290.82 over 5 years, i currently owe £5612.02, yet the car is only worth £3300 by Ford £3400 by Citroen or £4400 by Carcraft.

so technicaly once i have £4645.41 to pay i can return it?

and do i get anything against my credit history?

if this is the case i will be entitle to hand the car over in just over 5 1/2 months