Would you sell car to clear debts??

HairyHandofDartmoor

Well done! You are definitely doing the right thing. You may save petrol money too if the car is smaller I presume?

I wouldn't sell ours as it was only £4000 when we got it, would sell for less now and is reliable and roomy enough for 5. But I would if I was in your situation.

izzybusy23

consnmattsmom wrote: »

As you can see from my sig we owe quite a bit.:o However we have a high powered car that costs a fortune in petrol and gonna be high band tax bracket. We need a car but because my husband has bought a scooter (to reduce all round costs) I only need a smaller car for my job and getting children around during the day and for odd family trips.

The car is currently on finance so we cant sell it privately (I believe) so we are considering taking out a consolidation loan (with lower int rate and over same term so payments will be same). We should get approx £7500-£8000 for car (owe approx £8800) so we can then spend about £4000 on a smaller good car to last us a few years and then pay between £3000 and £4000 depending what we get for car off debts.

Is this a good idea?? I cant see a reason for it not to be really. The only thing that concerns me is being turned down for a loan as we had a default in 2003 that was cleared almost straight away and has affected us getting some credit in the past but we have recently applied and got a couple of 0% int c cards.

Sorry its a bit long.

Hi there

Definately!!! When me and my OH deceided to live together (he has quite a bit of debt, mine is minimal) he bought a chopper style bike to reduce all round costs and we kept my car and he is trying to sell his.

In the winter it might be difficult, but he works nearer to home than I do which is a 5 minute ride away.. but we think of all the money it will save long term. Hardly any petrol, cheaper insurance and tax etc.

Get a car which is less than a 1.6 and then you will fall under the cheaper tax bracket and save on petrol and insurance too.

I know people loathe to get rid of their nice cars, but think of how nice it would be to pay off a large chunk of your debt!

Good luck with the loan application.

cantcope

I'd sell it. That's the first thing i did when i started tackling my debt. It was a wrench swapping for an older car but it cleared a massive chunk off.

rog2

I agree with selling the car, but I disagree with the idea of the 'Consolidation Loan'. There ARE other solutions, and if you post your full soa, you'll get lots of advice on how to avoid the dreaded word 'consolidation'.

trainee_debt_buster

consnmattsmom wrote: »

The car is currently on finance so we cant sell it privately (I believe) so we are considering taking out a consolidation loan

Have you asked the finance company? If you are likely to struggle with repayments, the finance company may give you permission to sell the car, it saves them the hassle of trying to repossess it and if you sell it and repay them, then it's likely to to repay more of the debt. So they may give you permission to sell it, worth a try before the consoidation loan.

TDB

consnmattsmom

We dont need a consolidation loan now thank goodness. We reckon we will have a £1500 shortfall in what we owe to the value of the car. Therefore we have been told the garage that we get new car off will settle the finance ie add the shortfall to the new loan so that will be approx £5500 total inc new car which is 3500 off our debt and about 12 months sooner we will be debt free.

shop-to-drop

I think it's a no brainer to sell the car. Hope you can work things out to get as much as possible off your debts.

Good Luck

consnmattsmom

shop-to-drop wrote: »

I think it's a no brainer to sell the car. Hope you can work things out to get as much as possible off your debts.

Good Luck

Thanks not heard the term no brainer before lol does that mean yes or no to sell the car?

ixwood

Ditch it. The difference in all running costs (road tax, petrol, insurance, servicing, repairs) will be a lot between that and a sensible car.

It's surprising the difference. I recently changed from a 1.8 petrol hatchback, to a 1.9 TDI hatchback (great for tip runs, dogs, ebay pickups etc) and my running costs are probably around half now, for a very similar car.

I now get 50+ mpg, £130 fully comp insurance (with quidco cash back. Was 300 odd previously) and my tax was only £115, sintead of 200 odd. Not insiginificant savings. A smaller car should cost peanuts to run.

User parkers to compare insurance/tax groups, mpg, as well as 0-60 as a guide to slugishness.

shop-to-drop

consnmattsmom wrote: »

Thanks not heard the term no brainer before lol does that mean yes or no to sell the car?

Yes I am 100% certain it will be the right decision to sell the car. Normally I wouldn't make such a strong decision but in your case I think it would be a very positive thing to do.

Good Luck.;)