What are my options with my car loan?

Deastons

In August 2016 I bought a new car, and rather than do a PCP deal through the dealer, I got a Halifax car loan.

It's a big car which I've come to resent. As nice as it is to drive, it rattles and creaks and it's a pain to park, so I've started thinking about how to get out of it.

I have another car within the family (a Mercedes C-Class) so don't actually need this car.

Halifax says there's a £37k settlement figure, but here's the questions:

1. What if I just want to get rid of the car and have nothing? The car is probably worth around £55k, but to get the £37k settlement money, I'd need to sell the car, but the car isn't mine to sell.

2. Part exchange for a new car, but I'd consider something smaller and much less ostentatious. If that's the case, can I buy a £30k car and part-x mine? What happens - the dealer gives me £25,000 and a new car?

Or is there a better way to do this?

tho_2

You got a personal loan to buy a car (not a "car loan" in those words) so the car is yours to sell. So long as you can keep repayments up do what you like.

DUTR

When you say a car loan through the dealer, it's HP? Or a deferred loan?

Deastons

DUTR wrote: »

When you say a car loan through the dealer, it's HP? Or a deferred loan?

The car loan isn't through the dealer - it's through my bank. It's a Halifax Car Plan Extra.

AdrianC

Deastons wrote: »

In August 2016 I bought a new car, and rather than do a PCP deal through the dealer, I got a Halifax car loan.

Halifax says there's a £37k settlement figure, but here's the questions:

1. What if I just want to get rid of the car and have nothing? The car is probably worth around £55k, but to get the £37k settlement money, I'd need to sell the car, but the car isn't mine to sell.

Yes, it is.
You bought the car. You borrowed the money to buy it. You own the car.
You can't sell it without the financier agreeing, because your loan is secured on the car... but it's YOUR car.

Not like a PCP, where it's their car unless and until you buy it by paying the balloon, or a lease, where it's never your car.

2. Part exchange for a new car, but I'd consider something smaller and much less ostentatious. If that's the case, can I buy a £30k car and part-x mine? What happens - the dealer gives me £25,000 and a new car?

Yep.

Or is there a better way to do this?

Five litres of unleaded, a match, insurance claim?

Deastons

tho wrote: »

You got a personal loan to buy a car (not a "car loan" in those words) so the car is yours to sell. So long as you can keep repayments up do what you like.

That's not my understanding of it. A personal loan was more expensive, this seems to be a dedicated car loan. I had to give Halifax all the details of the car, so I assumed the loan was secured against it.

Deastons

AdrianC wrote: »

Yes, it is.
You bought the car. You borrowed the money to buy it. You own the car.


Yep.


Five litres of unleaded, a match, insurance claim?

Ah, ok. This is suddenly a lot easier than I was expecting. I assumed I didn't own the car, Halifax did.

So I could sell the car tomorrow for, say, £55k and then settle? And then go and buy a new car? Much more financially worth while than part-x.

From Halifax's website:

"You will need to request an early settlement figure from us, which you can do online, and settle your current contract before you change the car. You will also have the option to voluntarily terminate your contract. Our customer service team will be able to give you details of the early settlement balance or more information about voluntary termination, and the steps you would need to take.

You also have the option to voluntary terminate your agreement. You will need to return the car and half of the total amount payable as detailed on your agreement documentation. If you have already paid at least this amount plus any overdue repayments and have taken reasonable care of the car, you will not have to pay any more."

Typhoon2000

There are 2 types of Halifax car plans. Secured loan or PCP. Sounds like you choose the PCP option.

AdrianC

Deastons wrote: »

That's not my understanding of it. A personal loan was more expensive, this seems to be a dedicated car loan. I had to give Halifax all the details of the car, so I assumed the loan was secured against it.

An unsecured personal loan was more expensive - obviously, because if you fail to repay, they have nothing to repossess.
This is a secured personal loan, secured against the car.

Cornucopia

It does sound an awful lot like a Car Loan, in which case your options are:-

1. Redeem the loan, and sell the car, keeping the proceeds.

2. With a dealership, or other reputable buyer, sell the car, and have them settle the finance. You'll get whatever equity is left.

3. Depending on the progress through the loan period, voluntary termination.

4. Obtain a settlement figure, and negotiate a trade in. Some smaller dealers may be reluctant to take a deal with a large negative difference between the value of the old car vs. the new car.

ratrace

Op, its best calling halifax up and clarifying to them what you want to do, we dont know what sort of deal you have on your car as somene says above halifax do 2 plans one is a fixed plan and you own the car the othe is a pcp where you have the option to walk away

see the videos on the halifax link below
https://www.halifax.co.uk/car-finance/