Car Finance whilst in a DMP - Advice Needed

CU_5393

My wife and I are one year into our DMP with Payplan, as such we have a number of defaults and are aware that we are not allowed to apply for credit etc.

We both work and we are a two car family. We cannot survive without both cars due to the nature of our work. We own one car outright, and on the second car the finance agreement is due to end in Sept where we will have 3 options. Return the car, trade it in for a new one or pay the final balloon payment of £4000. We currently pay £180 per month for the finance (VW financial services). We have never missed a payment and this is budgeted into our monthly expenditure. We can afford to continue paying this figure.

Obviously I know that we cannot trade it in for a new car, having a DMP, poor credit ratings etc. I don't particularly want a new car anyway, I'd rather keep what we have. It's worth more to us than anyone else. That said there is probably a small amount of equity in the car.

Are there any companies out there that would even look at giving us car finance to pay the ballon payment and keep the car? I'm aware that there are a number of "log book" loan companies but I really don't want to go down that road. We have turned things around in the last year. The frustrating thing is that we could continue to pay what we are paying now until the balance is paid but the finance company said we would have to apply for new finance for the £4k balloon payment which would invariably get knocked back.

I had a look at we buy any car dot com to see what they could give me for the car, thinking I could sell it and buy a cheaper runaround with the change but there wouldn't be much left over. The only way I'd make money on it would be to go back to the dealer but then I'd still have the problem of not being able to secure finance...

Any suggestions/advice appreciated. Thank you.

chanz4

your dmp advisor is the best place

dancingfairy

Getting more credit is obviously not a good thing as it is against the terms of your dmp and could cause your dmp to fail.
Is there anyone who could pay the balloon payment for you (I'm thinking close family member)?
How much do you pay to your dmp at the moment? You might be able to take a payment holiday for a month or 2 to pay the balloon payment but I am unsure if this will give you the amount you need in such a short period of time.
I'll have a think.
df
edit: is it hire purchase? If so there is a useful factsheet here: https://www.nationaldebtline.org/EW/factsheets/Pages/16%20EW%20Hire%20purchase%20and%20conditional%20sale/Default.aspx . If you have a hire purchase agreement then it seems like the creditors would have to go to court to get the car back. This would obviously by you some more time and it does say you can apply to the court to pay in installments.
As the previous poster said the best people to advise you are probably your dmp provider.
I hope they can sort something out for you.

Sazzie23

Hi CU


Sounds like the DMP is working well, I would contact payplan for advice. Also maybe someone on the DMP support thread has been in this position, perhaps consider posting on there, I'm sure I read once that someone on a DMP was allowed to have credit for a car as it was essential for their work.


Good luck, there has to be a workable solution, you just need the right advice.

FBaby

Don't know about getting a loan, but in terms of what to do with the car, definitely don't go with 'webuyanycar', they will rip you off.

I was in the same situation than yours some years back, except that I had gone largely over the mileage allowance and the car had a scatch, so meant that if I returned the car, they were likely to charge me at least £1000 if not more for it all.

I decided to sell the car privately and that was the best decision. A bit stressful, but in the end, I got it for the exact amount of the balloon payment, so ended up even. It was a VW too and they hold their value well.

Ideally, it would be great if you could make enough a profit with a private sale to allow you to put it as a deposit for another car. If you have been approved with the current finance towards your current car, wouldn't they also agree with a similar budget for another car?

dazla

HI

I am with payplan and I was in the same position as you last year with my Toyota. The balloon payment was due but Toyota refused to allow me to re-finance the car for the balloon payment. The toyota dealer only offered me £3000 (which was also the outstanding amount of the balloon payment)for it but I sold the car privately through autotrader for £5000. I was upfront about there being outstanding finance on the advert I placed in autotrader, so when the buyer arrived to collect the car we both went to my bank and he paid the £3000 direct to toyota's account and remainder into my account and then he phoned toyota who confirmed the ownership was transferred to him.

I arranged finance for my new car through red potato, who are linked to payplan, ok the interest rates are higher, but this was my only choice available as no car dealer or bank would lend to me because of my dmp....I now have a 2 year old kia through red potato and am very happy with eveything

CU_5393

Hello everyone, thank you all for your advice and support. That's what's great about this forum, everyone is like minded and is either in the same boat or has been.

I really wouldn't want to go down the road of missing any payments on my DMP, we pay £900 per month! That would mean missing at least four monthly payments and in any event the balloon payment is due in September. We haven't missed a payment in a year and I really wouldn't want to start now.

I have considered asking a family member for the money, but that family member would have to borrow the money, and although an option it's really my last one.

After I posted this thread I was looking on the Payplan website I stumbled across Red Potato. In addition to providing vehicles to those in my position (at a premium) they do offer a specific service for precisely my predicament. Red Potato offer the option of refinancing balloon payments! I have completed an enquiry form and will keep you all posted with the result. Fingers crossed.

Further to this I will seek advice from my Payplan DMP advisor on Monday.

Regards,

Alan.

dazla

CU_5393 wrote: »

Hello everyone, thank you all for your advice and support. That's what's great about this forum, everyone is like minded and is either in the same boat or has been.

I really wouldn't want to go down the road of missing any payments on my DMP, we pay £900 per month! That would mean missing at least four monthly payments and in any event the balloon payment is due in September. We haven't missed a payment in a year and I really wouldn't want to start now.

I have considered asking a family member for the money, but that family member would have to borrow the money, and although an option it's really my last one.

After I posted this thread I was looking on the Payplan website I stumbled across Red Potato. In addition to providing vehicles to those in my position (at a premium) they do offer a specific service for precisely my predicament. Red Potato offer the option of refinancing balloon payments! I have completed an enquiry form and will keep you all posted with the result. Fingers crossed.

Further to this I will seek advice from my Payplan DMP advisor on Monday.

Regards,

Alan.

Well I never knew Red Potato offered re-financing for balloon payments, wish I had discovered that..well never mind, whats done is done for me, hope it all goes well for you

rokat

Hi,
Sorry to hijack this thread but does anyone know if there is there something similar to Red Potato for those on a DMP with Stepchange? You have to be on a DMP with Payplan to use Red Potato

Smurf13

Hi There,
I don't know if this would be allowed, or help, but at the time I needed to pay my balloon payment to VW Finance I contacted them and they continued the finance. It was under a new policy number, but at the same monthly payment.
Wishing you good luck for a solution.

CU_5393

Smurf13 wrote: »

Hi There,
I don't know if this would be allowed, or help, but at the time I needed to pay my balloon payment to VW Finance I contacted them and they continued the finance. It was under a new policy number, but at the same monthly payment.
Wishing you good luck for a solution.

That would be the ideal situation for us, however the finance company told me that it would involve a new finance agreement for which they would have to undertake a new credit check. Undoubtedly we would fail due to our DMP and defaults.


They did say that they MAY be able to take into consideration that we haven't missed a payment but they wouldn't look at doing this until August and the agreement is up at the start of Sep. I can't take the risk of leaving it that long without putting a contingency in place. We really can't afford to lose the car.


I spoke to Red Potato today, it seems promising so far, will keep you all posted as I hope this will help someone else in the same predicament!