Car and BR - PCP

Rio1956

Hello, I have been advised through the Stepchange site to consider bankruptcy. My question is whether there is any chance of the OR allowing me to keep my car?. It is being bought with a Personal Contract Plan and is in negative equity. It is worth about £3500 - it costs £100 a month but is very cheap to run - road tax is only £30 and insurance really low. I need it for work as I work in a rural location and cant be without a car. I havent got the funds to buy an older car for cash and tried that last year. After spending £1000 on repairs the engine blew up which is partly why I am in financial trouble now. I dont want to keep it, go bankrupt to find it has then got to be given up leaving me with another debt to settle the finance. Can you offer me any advice?

philnicandevan

Depends on the PCP small print as well....may have a bankruptcy clause in it somewhere

you'd have to put a case to the receiver as to why you NEED a car rather than want to keep...the value of the vehicle is high though which means an OR may ask you to move to a cheaper vehicle and more than likely say £100 a month to the PCP wont be allowed..

TheGardener

There are 2 questions there:
1. Will the OR allow general running costs for a car if you need one - and the answer to that is yes. However, the cost of the monthly contract payments is less likely.
2. Will the PCP company allow you to carry on with the contract if you are BR - probably not - check the contract small print.

I know you have had a bad experience with an older car but I had one and it lasted me 5 years and never let me down (apart from needing a new battery)

Rio1956

Thank you for your replies - I have checked the paperwork and cannot find anything that involves BR. I am happy to ring the finance company and ask them but wondered if there was any advice on here before I start rattling cages! I do think that although the value is high, the running costs, mpg, and reliability are worth far in excess of £25 a week. I also have a family member who has offered to take over the payments for me if neccessary. I will not hide anything from anyone - it is just good to get peoples experience. This sounds so feeble but being a single female it is such a risk to buy an old (er) car especially when you can't do maintenance or servicing.

elljay

Rio1956 wrote: »

Thank you for your replies - I have checked the paperwork and cannot find anything that involves BR. I am happy to ring the finance company and ask them but wondered if there was any advice on here before I start rattling cages! I do think that although the value is high, the running costs, mpg, and reliability are worth far in excess of £25 a week. I also have a family member who has offered to take over the payments for me if neccessary. I will not hide anything from anyone - it is just good to get peoples experience. This sounds so feeble but being a single female it is such a risk to buy an old (er) car especially when you can't do maintenance or servicing.

I think you've just had an unlucky experience, as you can too with any car, new or old. While bankrupt I bought one for £200 and although it wouldn't have won any beauty contest, (and even I felt a bit embarrassed in it, which takes a lot!) it did the job fine. My current car has done 210k miles and is fine. I live in a rural area too, along with all the potholes etc!

The OR will allow an amount for servicing and running it (eg, RAC, insurance, car tax, MOT etc). Anyone can do basic car maintenance, unless you have really severe physical disabilities, and apologies if you have. It's not something tough men are born being able to do, we elderly feeble females can keep a car ticking over just as well!!

I remember this question about pcp being asked a while ago on here, it might be worth checking back - maybe a year ago or so? The best thing to do would be to speak to Stepchange or Nat Debtline and see what they say.

A4445

I went BR in 2009 and was able to keep my car worth £1000, it wasn't an issue at all. The OR understood I needed it. I did by a newer car after discharge, I wasn't subject to an IPA. I did check with the OR before buying it and the said I could do as I pleased as I was discharged.

TheGardener

Rio1956 wrote: »

Thank you for your replies - I have checked the paperwork and cannot find anything that involves BR.

The contract may not specifically say the word 'bankruptcy' but there may be a more general clause about a change in your credit status that you need to look out for.

I don't think the poor helpless female not being able to change an indicator bulb or check/top up the oil is going to wash with the OR I'm afraid. You are allowed to claim for breakdown cover anyway

The OR does have some margin for interpretation of the IS rules but can not overlook them completely - I will be surprised of you are able to continue with that is effectively a credit contract worth in excess of £500 but it's worth asking.

Rio1956

I will definitely call the finance company first and see what the rules are, that comes before anything else. As there is around £800 negative equity I will have to find that out before filing as it will have to be taken into the BR if I have to hand the car back. It isn't so much "poor little me" as getting taken for a mug with buying a car. I got stung last year and ended up £1500 poorer and nothing to show for it in just 3 months. Very helpful replies - thanks very much

divorcedclaret

Not a PCP agreement but while I was bankrupt I had a car on finance through Blackhorse costing £215 per month. The OR couldn't touch it as it was technically a secured debt. The OR also allowed me to include the payments in my SOA which then showed I had no surplus so didn't get an IPA.

Since discharge in November I've been able to save up £3000 for the balloon payment at the end in October so will own the car outright. I rang Blackhorse as soon as I knew I was going bankrupt and explained as there was a bankruptcy clause in the paperwork. They said as I hadn't missed any payments and as long as I continue not to miss any they wouldn't repossess the car as it made no sense for them financially.

the car was worth well over £1000, more like £6000 so I guess it depends on the OR you get. I had a good case for keeping a car needed for travelling to work and getting my kids to and from school (primary age).

Good luck