Car pcp

waspsandwich

Hi
I bought my car on pcp last November, it was a good idea at the time, newer car, smaller and more efficient.
Since then my partner has had our second child and the car is far too small for our needs. I have spoken to Blackhorse and they told me I would need to buy a new car. After speaking to several garages I was advised that due to the negative equity on our car the monthly payment would be astronomical (we are bearly coping with the payments we have, due to extra mouth and my partner being on maternity pay) To bring the payments down I looked at buying an older car but was told no finance company would cover the negative equity on a car worth so much less.
I then looked to borrow the cash to pay off the negative equity but my credit rating was not good enough to get the loan.
I am now in dire straits as I am struggling to pay a car that we can not all use.
Is there any other option open to us as I honestly cannot see a way aout of this mess.

EssexHebridean

Bumping this back to the top as you've had no replies...

I'll also suggest that as you say you're struggling in any event it may be worth completing and posting your SOA (Statement of Affairs) - people in here can then take a look over it and see if there is anywhere that at least in the short term you can make savings that you may not have spotted. You'll find the link to the SOA in the sticky post at the top of the board.

lambda

Hey.

A few options for you.

Post an SOA on here and let's see how much money you are bringing in, and how much your expenses are. It might be you can afford the monthly payments but you just don't see it due to your spending habits.

Check the T&Cs of the PCP. Some HP agreements let you hand the car back to the finance company. This would basically settle the agreement, but you'd lose the car. It normally doesn't impact your credit rating to do that. You could then take out a new HP agreement on a smaller car, or just buy a cheap banger to tie you over for a bit until you are in a position to get a newer car again.

Oakdene

Sadly as you've already found out your car is worth a lot less than your contract...

How many months is your PCP over? 36/48?

National_Debtline

Hi there,


You have the right to voluntarily terminate the agreement under Section 99 of the Consumer Credit Act 1974. This means you will be liable for 50% of the original agreement, minus any money paid to date, plus any excessive wear and tear on the car.

However, the issue you may have with this, is that PCP agreements have a mileage limit and consider the future value of the car, which can make the 'wear and tear' element hard to calculate. And some PCP agreements are structured with a balloon payment at the end. This balloon payment can sometimes by 2/3 of the whole agreement, which means you wouldn't have paid 50% off unless you pay some of the balloon payment.


If you terminate the agreement and you have paid less than 50% then the difference (between what you have paid and 50%) falls due immediately. If you can't pay it then you can treat it like a non priority debt, but I am afraid it will damage your credit file. I agree with other posters about putting up your SOA to try and help you with more options.


Laura
@natdebtline