Giving back Car (On a 60m HP) after 3 Months

hotlymet

Hi All,

I'm in a really bad position at the moment that i'd like advice on,
I'm 3 months into a 60 months car hire purchase agreement and due to unforeseen circumstances, i can no longer keep paying the £480 pm payments.

I have spoken to the provider, VW Finance, who advised that i would be required to pay upto 30 months before i could give the car back via voluntary termination. a quick calculation means that this would cost 27 * £480 = £12,960. Obviously i don't have this money to pay them.

Another option I've heard about is having the car repossesed and sold at auction, if they go down this route, i'd expect them to get £15K for the car, minus this from the amount that i owe, 23K, leaves a shortfall of 8K which i'd have to pay (less than the half way option) - however there are likely to be other charges im sure!

Either way, i know my credit rating will be ruined and i accept that.

What route do you think is best? could i even become bankrupt? Id prefer not to make payments to be over an even longer duration either (if that's even possible)

Any advice would be much appreciated

Gaz83

What circumstances have changed since you purchased the car?

Due to the short timescale involved, is there any way you could have foreseen this happening?

hotlymet

It's a combination of a few circumstances and bad money management to be honest (it was an impulse buy),
we are expecting baby number two in a couple of month (not unforeseen i agree) and I also borrowed a large amount of money from a friend who now wants it back sooner than originally planned.

I'm pretty sure either way, i'm going to owe in the region of 10K for a car than i will not have whilst repaying. I'm just hoping that the repayments will be a lot less than 480 pm

chalkie99

Zac_Holt wrote: »

Hi All,

I'm in a really bad position at the moment that i'd like advice on,
I'm 3 months into a 60 months car hire purchase agreement and due to unforeseen circumstances, i can no longer keep paying the £480 pm payments.

I have spoken to the provider, VW Finance, who advised that i would be required to pay upto 30 months before i could give the car back via voluntary termination. a quick calculation means that this would cost 27 * £480 = £12,960. Obviously i don't have this money to pay them.

Another option I've heard about is having the car repossesed and sold at auction, if they go down this route, i'd expect them to get £15K for the car, minus this from the amount that i owe, 23K, leaves a shortfall of 8K which i'd have to pay (less than the half way option) - however there are likely to be other charges im sure!

Either way, i know my credit rating will be ruined and i accept that.

What route do you think is best? could i even become bankrupt? Id prefer not to make payments to be over an even longer duration either (if that's even possible)

Any advice would be much appreciated

Not sure where you get your figures.

If you have paid 3 months then you have 57 months left which means you owe 57 x 480 = £27,360 - not £23k.

You also need to factor in repossession costs and the fact that the auction price will be bottom book trade.

Have you considered going back to the supplying dealer and see what they will give you, with them paying the finance company directly? You can then see what sort of shortfall that might leave you and work from there.

forgotmyname

Are your figures correct? If they repossess the car you will owe approx £28,800.

Minus £15k you estimate its value at auction. And minus £1440 for the 3 payments.
But add on costs to sell the car could leave you owing well over £12k.

Bankruptcy is a big step and not to be taken lightly. Close to doing that myself but luckily i didnt need to do it.

k3lvc

Unlikely that the current lender will allow you to continue paying for an asset you don't have so you're likely to have to look for some other way of clearing the balance between what it sells for and the outstanding balance. Given your self confessed financial issues then you're unlikely to high on anyones list for lending that sort of money.

Can your dealer help with a transfer to a (much) cheaper vehicle ?

k3lvc

chalkie99 wrote: »

If you have paid 3 months then you have 57 months left which means you owe 57 x 480 = £27,360 - not £23k.

Presumably £23k is the current settlement figure rather than the outstanding balance of payments due ?

hotlymet

Yes 23K is what they want for a settlement (minus the interest that would occur over the 5 years which sums 28K)

Its been valued at 18.5K at the dealer, hence why i predicted 15K at auction. The dealer could give me another car (Golf) for 400 pm if i gave them 1500, which doesn't seem to be a much better option IMO as the 1500 is almost the savings that i'd see before i could VT.

FYI - the car is a limited edition however they had to value it as a standard with addons at the dealer, the same car is on autotrader for 25K

k3lvc

Zac_Holt wrote: »

FYI - the car is a limited edition however they had to value it as a standard with addons at the dealer, the same car is on autotrader for 25K

So what's the car then ? If it's desirable you could sell privately (or to a dealer) assuming between you and buyer the outstanding finance is cleared

hotlymet

2012 Audi 2.0TDI A4 Avant Quattro Dynamik (only a handful produced)
I thought it was illegal to sell whilst on a HP / how likely is it that someone would purchase a car of this value if it came back on a hpi check.

SeanG79

You can sell the vehicle while it has finance on it, provided you make the buyer aware and the finance is settled in full in the sale process.

If you have only had the vehicle 3 months, what did you pay for the vehicle and what deposit did you put down.

By settling the finance early, you will only pay an additional 59 days interest.

If the vehicle is for sale for £25k on auto trader then I would assume you would be able to get close to the £23k you need via a private sale. If you then get the new buyer to pay the finance company directly, settling the finance, this gives both you and the buyer piece of mind that they own the vehicle and the current finance is settled. (any shortfall you would obviously need to pay).