Bringing down my car payments

johnnyfaddo

Hi,
Under a year ago, I got a car on finance for my job, since then I have got a new job, I literally use it to go around the corner to go to the train station and maybe sometimes on the weekends, I am not using it enough to be paying £390 per month (that's including insurance).

I got my settlement fee which is £9,400. I contacted my dealership who sold me the car, he said to reapply for finance with the finance company I am with now, which I got accepted for but at high risk again (9.25%), he said my car is currently worth just under £7,000, which would leave my negative equity at just under £2,500, which would obviously go on top of another car at a lower payment, which would make about £20 difference, which is pointless.
I have though about selling the car, but this seems pointless due to the fact I would have to sell it and save up about £2000 just to get out of the contract, then I would have to buy another car as well!

Is there a way I can work around this or maybe something I can do?

Thank you in advance

facade

You could-

Try and get a loan for the £9,400 at a lower rate of interest to reduce the payments.
Look for a job that pays more money, that you need the car to drive to.
Just keep paying and have a nice low mileage car.

Anything else means throwing away at least £2400, and leaves you with no car.

AdrianC

If you're not using THIS car enough to be worth keeping until the end of the finance period, then why do you need to own a different car? Won't your use still be the same?

It'll cost you £2,500 to get out of this now. Or it'll cost you £300/mo to stay in the car until the end of the contract - two years? £7,200. So that's near-on £200/mo for taxis and weekend car hire...

If you can only get 9%+ finance, then I'm guessing your credit record's not great. Now would be a really good time to get off the finance treadmill, and try to improve your financial position. This is a great first step...

forgotmyname

Get a loan for £2000 hand the car back and pay off the finance?

I doubt you can sell the car then save to pay off the £200 deficit. You sell their car and they will want their money now.

Get a loan for £3000 and hand it back pay off the balance and buy a cheap runabout?

johnnyfaddo

Thanks guys!
I think maybe the best idea is to get another loan, hand the car back and pay off the difference, thanks forgotmyname.
I can see its a bit of a lose lose situation because I still want a good car, but that seems to be difficult haha!
Thank you everyone for your help.
If anyone does come up with any further ideas, feel free to post in this thread!

Thank you again

rtho782

Is this a lease? a PCP? a HP?

Are you 50% of the way through the total payments?

It may be that you can do a VT and forget the "negative equity".

BeenThroughItAll

rtho782 wrote: »

Is this a lease? a PCP? a HP?

Are you 50% of the way through the total payments?

It may be that you can do a VT and forget the "negative equity".

He says he got the car under a year ago, so at £400 a month with a settlement figure of £9400 it's unlikely to be VT'able unless he paid a big deposit.

johnnyfaddo

Hi,

It is a HP.
I am only a couple of months into a 5 year contract.
What is a VT sorry.

Thanks

AdrianC

johnnyfaddo wrote: »

I am only a couple of months into a 5 year contract.

Wow. So at £390/mo, and another (let's say) 52 payments, that'd be £20k or so... On a car that's currently worth £7k.

Give the damn thing back asap. Regard the £2,500 as a cheap lesson.

What is a VT sorry.

Voluntary termination.

LandyAndy

johnnyfaddo wrote: »

I can see its a bit of a lose lose situation because I still want a good car, but that seems to be difficult haha!

AdrianC wrote: »

Wow. So at £390/mo, and another (let's say) 52 payments, that'd be £20k or so... On a car that's currently worth £7k.
.

That is a properly scary position to be in and a lesson to many.

This isn't a pop at the op just highlighting how terrible buying second hand cars on lengthy finance at high interest rates can be.

johnnyfaddo

Hi,
No sorry that is with insurance, the car is £250 alone!