Car loan

Smallcowsheep

In February 2015 for the very first time in my life and that life was very difficult, I thought I would treat myself to a new car. It will be seen that for an old person I was culpably ignorant about finance. I bought a Fiat 500, which was/is wonderful, on what I think is called lease finance?? I pay £150 per month for it and in ~Feb 2019 I have to pay £3800 for the car to be mine. As things were, I wasn't going finally to retire until 2021 and I reckoned to be able to save that amount over those years.

What happened was that my life totally fell apart and I went to live abroad. While still paying the monthly payments, I've loaned the car to my son (who doesn't actually want it permanently). I have no income other than State pension now so £150 a month knocks that considerably. I have no chance of finding £3800 and of course if I just give it back, I not only lose the car but have to find £5000, another impossibility!! I would be more than grateful if anyone knew any way to extract myself from this mess. Someone suggested that I could borrow the £3800 from someone and then sell the car. I calculate that it won't be worth anything like £3800 by then. A a a a a rgh!! Anyone any thoughts at all, other than there's no fool like an old fool!

iolanthe07

I not only lose the car but have to find £5000,

Sorry if I'm being thick, but why would you have to find £5,000?

foxy-stoat

Options are to keep paying it until February 2019 and hand it back, assuming your Son has taken care of it and theres only fair wear and tear or call the lender and find out the settlement figure and find out the current market value, while your there ask them how much it will cost you to be in a position to voluntarily terminate the agreement, it will be 50% of the total price for buying it.

Then you will be in a better position to move forward.

Personnaly I wouldnt be happy with the current arrangement as you are leaving yourself open for a hard finanical lesson should things take a turn for the worst.

Smallcowsheep

Thank you both. For Iolanthe I have to say the £5000 is what the lender said I would have to pay if I handed the car back early, which obviously means that m son doesn't have the car and I've lost £5000 that I don't have in the first place. Yes, I see what Foxy-Stoat is saying. I just carry on paying and then give it back. Gor blimey , had I known how my life was going to change I could have done what for my shortish time back here I've done now and bought myself a perfectly nice and acceptable car for £1350. That's being wise after the event.

As for the hard financial lesson, I've learned it already!

nomoneytoday

Usually with a PCP the "half way" point will be near the end of the agreement, but in the paperwork there should be a point at which you can just hand the car back and walk away.

Oakdene

Basically you're 18/48 way through your contract as nomoneytoday said the halfway point is usually towards the end of the contract. There should be a section in your contract that tells you you need to have paid 50% of the contract to hand the car back without charge (subject to fair wear & tear).

So far (assuming no deposit you have paid roughly £2700 (more if you've paid this month) so find the value of the contract, divide it by 2, take £2700 and this will tell you how much is left to pay, divide that by £150 & that'll tell you how may months you have left before you can hand it back.

Nearlyold

OP is due to pay £150 x 48 = £7200 + £3800 balloon at the end = £11,000 total.
50% of £11000 = £5,500 - already paid £2700 (depending on payment dates)
So £2800 to go before at the VT stage. Figure may be slightly higher or lower dependant on any arrangement fees paid, option to purchase fees to pay and whether there are 48 or 47 payments of £150 to make.