Car Loan

Lurch1989

Afternoon all,

Just over a year ago I took out an HP agreement for a new car, the car was £10k. Dealer said I had a good deal on the interest, stupidly I didn't check and it turned out to be just shy of 15%. As it is I owe £11,700 on the car which is now worth £6500

I've been looking at a way out, I did look at another car, with the interest rate at 8%. So in affect I'd be refinancing the negative equity by adding it onto the new car agreement. I did have a word with the bank about getting a loan to pay the settlement figure - long story short they weren't up for that.

As it turns out I also need a service, MOT and 2 new tyres on my current car. Currently looking at around £300

What would you do? Swap or stay put? Either way it's going to be costly - but I'd like to go the cheapest route.

forgotmyname

Unless your swapping for a cheap banger your probably going to spending even more.

As you owe so much on the car compared to its current value there is little you can do but stick it out.

Swapping to another car will be adding £5000 onto the price of that car and the seller will be making a profit on the car they sell you and they also need a profit on your car...

Lurch1989

forgotmyname wrote: »

Unless your swapping for a cheap banger your probably going to spending even more.

As you owe so much on the car compared to its current value there is little you can do but stick it out.

Swapping to another car will be adding £5000 onto the price of that car and the seller will be making a profit on the car they sell you and they also need a profit on your car...

The added price onto the car is £2500.

CLAPTON

Lurch1989 wrote: »

Afternoon all,

Just over a year ago I took out an HP agreement for a new car, the car was £10k. Dealer said I had a good deal on the interest, stupidly I didn't check and it turned out to be just shy of 15%. As it is I owe £11,700 on the car which is now worth £6500

I've been looking at a way out, I did look at another car, with the interest rate at 8%. So in affect I'd be refinancing the negative equity by adding it onto the new car agreement. I did have a word with the bank about getting a loan to pay the settlement figure - long story short they weren't up for that.

As it turns out I also need a service, MOT and 2 new tyres on my current car. Currently looking at around £300

What would you do? Swap or stay put? Either way it's going to be costly - but I'd like to go the cheapest route.

MOT's and services are pretty predictable and needing new tyres isn't unknown

from the info supplied it make no sense to change the car

however worth learning the lessons
-save before spending
-read T&Cs before signing
-learning that cars are expensive to run
-cars depreciate in value
-you don't need to spend 10,000 on a car

Foxy-Stoat_3

Lurch1989 wrote: »

As it turns out I also need a service, MOT and 2 new tyres on my current car. Currently looking at around £300

Can you not afford to spend £300 on your car this year?

If you can afford the repayments then stick it out as exiting the agreement now will cost, as you say, £5200 without even buying another car.

If your bank has refused a loan of £11,700, would they lend you say £8,000? £5,200 to clear the outstanding balance after you sell then a couple of thousand to buy a cheaper car.

DCFC79

If your own bank said no Id say your chances are slim of getting a loan. Id carry on but maybe open a savings account to put some money away for the MOT, servicing, tyres etc.

Gaz83

Lurch1989 wrote: »

As it turns out I also need a service, MOT and 2 new tyres on my current car

If only things like this were well-known!

Lurch1989

Should have probably explained a bit better in all honesty.

The amount owing is still £11,800. The settlement figure is £9100
The car is worth around 6400.

In all honesty if i could sell and I could walk away from the whole lot j would.

Point taken, I've had a few cars and all the dealers have been honest and quite helpful. This one is got from a car supermarket... Read into that what you will. The reason was I needed something quick


My bank would loan the full 11k for a new car but not to refinance an existing one - even though it was lower

Tixy

How long is your finance over?
How long until you can VT the agreement and hand back the car?

Lurch1989

The finance was over 5 years.

Another year and a half till I can VT. I did enquire about the cost to take me to the VT point and it was £3600, the same amount of payments so it didnt make sense at all.

MEM62

A car salesman told you it was a good deal and you believed him? Whatever you decide to do I hope that you have taken that lesson on board.

Stick with the car you have. You were obviously happy with the deal and the car at the time and, other than the fact that it may frustrate you, the value of the car relative to the outstanding balance is largely irrelevant.