Anything I can possibly do?

JayLeeMillar

Tixy wrote: »

If you sell the car back to the dealer you have to settle the car finance, in fact they will automatically do that - that sounds like £9120 (if you have had the deal for a year), so if you can sell for £12k then you'd be given just under £3k in cash which wouldn't be anywhere enough to settle the bank loan never mind pay a deposit back on to the car.

Bottom line is the car is worth around £12k and in total you owe maybe about £17k on it. You don't want to try selling it and rebuying to increase that to over £22k.....

Really? I thought that if the car was sold back to the dealer then that was that, no more issues... I had no idea!

So respectively, if I was wanting to have a bit more money at the end of each month, my best option is to part with the car?

BrassicWoman

what is the current outstanding balance on the finance deal with the garage, and how are you planning to pay that off?

It looks like you have just forgotten about it?

It is still a debt to be repaid.

JayLeeMillar

BrassicWoman wrote: »

what is the current outstanding balance on the finance deal with the garage, and how are you planning to pay that off?

It looks like you have just forgotten about it?

It is still a debt to be repaid.

Looking at the papers, I had a balance of £11,400 to pay on the finance but been paying that for 12 months so still have £9,120 to pay.

I guess I wasn't considering that I have a the finance to clear aswell before taking any other steps. Not forgotten, just didn't know that's how it worked....

Tixy

JayLeeMillar wrote: »

Really? I thought that if the car was sold back to the dealer then that was that, no more issues... I had no idea!

So respectively, if I was wanting to have a bit more money at the end of each month, my best option is to part with the car?

If you sell a car on finance back to the garage they work out what they are prepared to pay for it (its current value to them), deduct how much you owe on finance and hand you back the difference in cash.

To free up cash per month then yes it sounds like your best option may be to part with the car. Although based on your numbers you would still have around £5k debt to service on the bank loan and have to pay that out each month until fully paid off - and have no car.

Could you manage without a car until at least you have paid off that £5k debt? could you buy a cheap runaround for a few hundred pounds and use that for the next couple of years.

Your are experiencing a very common problem with buying a brand new car with effectively no deposit at all, especially financing it over as long as 5 years. The car will depreciate much quicker than you are repaying the finance so you will be in negative equity for at least the first few years.

Tixy

JayLeeMillar wrote: »

I guess I wasn't considering that I have a the finance to clear aswell before taking any other steps. Not forgotten, just didn't know that's how it worked....

Sounds like you have confused yourself by having 2 lots of debt for the one asset.

Think of it like this - if someone buys a car for £20k and puts down £2k deposit cash and finances the remaining £18k.
2 months later they sell the car back to the garage for say £17k. The garage aren't going to turnround and give them all £17k in cash are they? The borrower would have made £15k in 3months and had the use of a car for that time.

If it did work like that it would be the best get rich quick scheme ever.

JayLeeMillar

I couldn't do without a car, its my daily transport to work. The only catch here is, if I was to buy a cheap run about car, then I'd say it's not really reliable, where as the car I have just now is covered under warranty for a lifetime (100,000 mile).

A few did say that the car will depreciate its value before I'm able to pay off the finance, suppose it's a lesson learnt....

Well Tixy, I can't thank you enough, your advice & knowledge has saved me a fair bit of grief (so to speak)

Many thanks again
Jay

BeenThroughItAll

JayLeeMillar wrote: »

I couldn't do without a car, its my daily transport to work. The only catch here is, if I was to buy a cheap run about car, then I'd say it's not really reliable, where as the car I have just now is covered under warranty for a lifetime (100,000 mile).

A few did say that the car will depreciate its value before I'm able to pay off the finance, suppose it's a lesson learnt....

Well Tixy, I can't thank you enough, your advice & knowledge has saved me a fair bit of grief (so to speak)

Many thanks again
Jay

I'm sorry, but respectfully, that's cobblers. You say cars are 'your thing', but if they really were you'd know that an older, cheaper car does not automatically mean an unreliable car. I've owned plenty of cars from £40 (yes, FORTY pounds) to £40K and they've all had problems here and there.


Chosen carefully, a cheap car can be every bit as or more reliable than an expensive one (in fact, my 40 quid Volvo 440 I bought in 2005 just to get me from one end of the country to the other cheaper than a train ticket. It was so good I kept it for six months and 8K miles, before selling it on eBay without tax or MOT for £84. About 12 months ago, I saw it on the road near me, still going).


Sounds to me that when you say cars are 'your thing' you mean 'a new car to impress my friends' is your thing.


Believe me, I've been there. No one gives a damn what car you own in the long run.

BillJones

JayLeeMillar wrote: »

I couldn't do without a car, its my daily transport to work. The only catch here is, if I was to buy a cheap run about car, then I'd say it's not really reliable, where as the car I have just now is covered under warranty for a lifetime (100,000 mile).

You can get a brand new car for around £8,000, if that;s really your thing, or get a perfectly reliable, perfectly nice "normal" used car for £5k.

Once your finances are in better shape then you can look to start getting nicer things again.

ch3101

Right now you're in "negative equity" on the car.
It now depends on what you need/can afford.

What I suggest you do is choose a few other cars that would be reasonable alternatives. Open up Excel and crunch the numbers, assuming manufacturer's given mpg, cost to buy, cost of finance, cost of maintenence.

Then choose the correct option (the cheapest one).

With regard to your car, I can imagine roughly what it is, ein Auto?
You'll find many second hand cars that are much, much more fun to drive.

caffsean

"Yes I am able to pay the full amount due on my bank loan in one payent at any time"

If you can really do this then wouldn't this reduce your monthly outgoings enough to start putting a little more away for your godchild etc and it would also cut the amount of interest that your paying on it.