Car on pcp and just lost job

Rossi_kop

Hello people,

I am just after some advice on what to do.

Long story short, I have just lost my Job. Redundancy to be exact.

I have a mortgage and a car on PCP. I have only had the car since November the 16th 2016. I know full well I am going to be in negative equity but I was wondering if there is any options open to me as I have only been in the contact 6 months.

Any help would be greatly appreciated.

Ross

neilmcl

You're only options are to keep paying until you can VT it (a long way off yet), or sell it (privately or otherwise) and settle the finance. Is your redundancy enough to pay off any shortfall?

Blackbeard_of_Perranporth

Don't forget to contact your mortgage company, and get on interest only.

Mine seem to take it nowadays as a risk from me!

SouthUKMan

neilmcl wrote: »

You're only options are to keep paying until you can VT it (a long way off yet), or sell it (privately or otherwise) and settle the finance. Is your redundancy enough to pay off any shortfall?

It is my understanding that the lender remains the legal owner of the car until all outstanding finance is paid - whether it's PCP or HP. Therefore you can not sell the car without the lender's permission, as to put it bluntly, it's not yours to sell. Talk to your lender and explain what has happened. They will have seen this many times before. Maybe your contract has a termination clause? For example, hand the car back and pay a one off exit fee. Worth asking

As for mortgage, I totally agree with Blackbeard. Going interest only while you are in between jobs can enable you to keep up your monthly payments without defaulting on your mortgage. Again, the key is to explain your change of circumstances ASAP to your lender. Maybe they will allow you to have a repayment break? I did this about 8 years ago for 3 months to 'buy some time' while I got my finances sorted after being made redundant. Just make sure you ask about any charges for doing so.

neilmcl

SouthUKMan wrote: »

It is my understanding that the lender remains the legal owner of the car until all outstanding finance is paid - whether it's PCP or HP. Therefore you can not sell the car without the lender's permission, as to put it bluntly, it's not yours to sell.

This is true, I didn't imply otherwise but appreciate the clarification nonetheless. However most finance companies will allow you to do this, although it will generally be easier to do this when selling it to the trade.