Car debt and reposession

LJW_2

Hi I am after some advice for my son. about 2 months ago he purchased a used Vauxhall Astra. It cost him £8000 plus £4000 interest (car was worth £7000). Anyway he realised very early on that he can't afford the £200 per month for 5 years!! He has asked the loan company to take the car back. They have now asked for over £5000 before they take it back! obviously he can't afford this. Does anybody have any advice for him?

Ps I gave him all the advice before he bought the car and told him not to buy it, however he bought it when I was on holiday!

Hope you can help but I fear he will be thousands it debt. By the way he is 19 if that makes any difference!

CLAPTON

was type of finance is it ? HP or what ... you may need to look at the credit agreement.

LJW_2

Hi Clapton, Its Hp. Myself and my son have spoken with the company (Blackhorse) and they are not very helpful. Not really sure what to do but just want them to take the car back and deal with the debt later!

GettingThingsDone

Hi LJW - I don't know much about that sort of thing, but I hope you manage to sort it out somehow (cooling off period?). Hopefully, the one good thing to come out of this is that your son will now understand that it is worth listening to your advice and that there are people out there who will be trying to 'do' him.

gtd

rog2

LJW wrote: »

Hi Clapton, Its Hp. Myself and my son have spoken with the company (Blackhorse) and they are not very helpful. Not really sure what to do but just want them to take the car back and deal with the debt later!

Blackhorse Finance were, in my experience, the worst people to deal with. My HP was 'unregulated' - I phoned them, asking for help, when I started experiencing problems. They would NOT take my car back, and INSISTED that I make payments to bring my account up to date within three months. They telephoned 7 days a week, even though I had made payments, I was harrassed by debt collectors and solicitors (It later turned out that these were all 'in-house') and, basically made my life a misery. When I was just about up to date, they uncermoniously re-possessed the car.
It was through that experience that I found this site - I wish I'd found it before I even contemplated using BHF.
It is possible that the loan was 'mis-sold'. Were ALL the conditions CLEARLY pointed out to him when he agreed the HP?
My advice would be for your son to go to CAB, or contact National Debtline.

CLAPTON

I 'm not sure I understand you when you say you want to return the car and sort out the loan details later?
what do you mean... you would be in a very weak position if he was paying 200 a month and had no car.. no incentive for them to settle anything.

Unfortunately if its a HP loan then there are regulations about these that probably aren't best for him but do read the following.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10013226

I don't believe there is any such thing as an unregulated HP agreement ... they just say that to put you off but seek help from www.nationdebtline.co.uk if they are unreasonable.

rog2

CLAPTON wrote: »

I don't believe there is any such thing as an unregulated HP agreement ... they just say that to put you off but seek help from www.nationdebtline.co.uk if they are unreasonable.

The Consumer Credit Act, 1974, only applies to HP agreements of up to £25,000. In the case of the OP's son, his agreement will, still, fall within the regulation of the act.
My agreement was for a sum in excess of £25k, and, therefore, not regulated by the Consumer Credit Act.

scotsgirl_3

Unfortunately, if he wants to hand the car back then he has to have paid up to half way point in the agreement - which is why they will be saying 5k as this is probably how far he has to go. He would be allowed to hand it back and pay the rest back over a longer period of time, but this does mean that he would be paying for something he doesn't have. But this is one of your options

Another possibility is to find out what the settlement figure is - this won't be as high as the balance - and find out how much he could get for the car if he were to sell it. he will have a gap, but once you know how bad that is you could look at your options - if it is a smaller amount than BH want then could he possibly get a personal loan for the shortfall which might save him a few k.

And rog2 is correct, unregulated HP do exist, whether your agreement is regulated or not is balance dependent.

LJW_2

Hi thanks for all your advice. I do think getting the settlement price and selling the car for as much as pos would be the best option.

What has annoyed me is that they let a young man who works as an apprentice joiner and is on a low wage get the loan in the first place!! They didn't even look at a wage slip which would have proved he couldn't afford it!!

Treadmill

People that CAN afford a car loan generally don't need to use Black Horse, Companys like Black horse love to see punters struggle because they earn more in charges. If he gives up the car he will still owe money as the car will have depreciated in value by more than 50% by the time he's paid half. You can't sell a car to pay off the HP as you do not own it while there is still money outstanding. I'd suggest keeping the car at least that way he has something to show for the payments.

consultant31

IMO one of the worst things the government ever did was to lower the age of majority from 21 to 18.

It seems as though, everywhere you turn someone is offering to "give" you umpteen thousands of pounds and, at 18, it's very easy to be swept away with all the new-found freedom and get into a debt which will be like a millstone for years.

I think budgeting lessons should be mandatory in school from the age of 14.
Come on Martin :money: how about doing a Jamie Oliver (for finance instead of food) in schools.