Handing Car Back Under VT and Credit Rating

spenni331

HI,

Apologies If I have posted this in the wrong forums.

I was wondering if someone could help me. I am considering handing my car back under a VT and was wondering if it will affect my ability to obtain a mortgage in the future.

I am just about to change jobs and have been offered a company car with both personal and business use included.

I can save myself £250 a month which I can put towards a mortgage deposit instead. However I wouldn't want this to effect future credit decisions.

Thank you

Richard

CKhalvashi

It will usually only affect decisions when taking another car, as you've stuck to the contract.

The HP company will be making less profit than they want with this situation, so may be reluctant to lend to you again, but apart from that there should be no negative impact.

Is the amount outstanding for more than the car is worth? It may be possible to pay this with the buyers cash and pocket the difference if you could proceed with a private sale.

spenni331

Thanks for your advice, the car is worth about the same as what's left on the finance. My understand is that I can't legally sell the car because it's not mine until the final payment has been made anyway?

CKhalvashi

spenni331 wrote: »

Thanks for your advice, the car is worth about the same as what's left on the finance. My understand is that I can't legally sell the car because it's not mine until the final payment has been made anyway?

You can advertise it, but you have to buy it from the finance company before selling it.

The easiest way is to get 2 cheques; one in the name of the finance co, other in your name, so the buyer is sure that the finance is paid. Only when these have cleared, you release the car.

Transformers

How about approaching a dealer and seeing if they will buy it? They can then settle the finance directly - they are used to doing this so won't be worried by the outstanding finance marker.

MEM62

spenni331 wrote: »

I can save myself £250 a month
Richard

Is the after you have allowed for the tax you will pay on the company car? If you have not considered this I suggest that you look closely at it. I am giving up my company car at the end of the lease next year as the tax liability is just too high. I am already at the point where it would be cheaper to run my own vehicle. I have a low emissions car and still pay £250 per month in tax - which the Government have already indicated they will increase by 50% over the next three years.