Help with PCP and my maternity

capp324

Hello, I wanted some advice please.

I took out a PCP on a car around a year ago when I could afford it. I am now on maternity pay and I literally cannot afford the payments anymore.

Its worth noting that when I took the PCP out I had to offset a previous car so I owe more than the car is worth by around £5.

How can I give this car back in the best scenario for myself? Please help. This is one stress I want to get rid of.

I ideally would be more than happy to give the car back and repay the difference over a period of time but is this an option? I am with Motonovo.

DrEskimo

Do you know what it would cost to settle the finance in full?

Do you know roughly how much you could get for the car in trade value?

Presumably you will still need a car after you sold it, so would you have any money to buy a cheaper one?

capp324

DrEskimo wrote: »

Do you know what it would cost to settle the finance in full?

Do you know roughly how much you could get for the car in trade value?

Presumably you will still need a car after you sold it, so would you have any money to buy a cheaper one?

Hi thank you for your reply.

I owe £17,000 and the car is worth around £12,000 and I cannot get a loan to pay the difference as my total spending is at its max mainly due to this car.

I wouldn't need a car as I am local to everything I need now - just the debt.

Thank you

DrEskimo

capp324 wrote: »

Hi thank you for your reply.

I owe £17,000 and the car is worth around £12,000 and I cannot get a loan to pay the difference as my total spending is at its max mainly due to this car.

I wouldn't need a car as I am local to everything I need now - just the debt.

Thank you

You haven't done too badly on the new car then, as you are just left with the £5k negative equity you rolled into the deal from the last car.

You can try sites like Tootle to see if you can get a bit more for it to minimise the shortfall, but if you can't borrow the shortfall, then I am not sure what your options are...?

Do you have any other debts? Whats your credit history like? How much is the car currently costing you?

capp324

DrEskimo wrote: »

You haven't done too badly on the new car then, as you are just left with the £5k negative equity you rolled into the deal from the last car.

You can try sites like Tootle to see if you can get a bit more for it to minimise the shortfall, but if you can't borrow the shortfall, then I am not sure what your options are...?

Do you have any other debts? Whats your credit history like? How much is the car currently costing you?

All in all its around £500 per month and my maternity is statutory at around £650... I am barely making the payments on some savings I had which are now diminished.

I have a 7k loan as well. Credit history is great but I am just maxed out completely. A pain really as soon as the car is sold/handed back I can pay the loan I need to get rid of it!

DrEskimo

capp324 wrote: »

All in all its around £500 per month and my maternity is statutory at around £650... I am barely making the payments on some savings I had which are now diminished.

I have a 7k loan as well. Credit history is great but I am just maxed out completely. A pain really as soon as the car is sold/handed back I can pay the loan I need to get rid of it!

The car is costing you £500 per month...?? What are the terms of the agreements? It must be a high APR?

The only thing I can think of is asking whether the finance company would take partial payment by Credit Card. You could then apply for a 0% CC with the aim of getting £5k limit, then trade the card in and pay off the CC over the 0% period (sainsbury’s offer 27months), which would be about £185per month.

capp324

Well its £400 but with insurance etc its £500. APR was around 12%.

That sounds like a worthwhile plan, I think I will look into this tomorrow!

Thank you

DrEskimo

capp324 wrote: »

Well its £400 but with insurance etc its £500. APR was around 12%.

That sounds like a worthwhile plan, I think I will look into this tomorrow!

Thank you

Pleasure.

Details can be found here:

https://www.moneysavingexpert.com/credit-cards/best-0-credit-cards/#sainsburys

Best of luck with it.

foxy-stoat

You can VT at any time, just hand back the car but expect to be chased for the difference to get you to 50% of the total purchase price of the car, plus any negative on the last.

If you can get another credit card with a money transfer option will you be able to afford to repay the additional debt within the 0% interest free period or will you need another credit card to balance transfer in a year and keep shuffling until you ran out of credit or ran out of low interest offers?

Sounds like you are over committed but hope it works out all ok in the end.

capp324

foxy-stoat wrote: »

You can VT at any time, just hand back the car but expect to be chased for the difference to get you to 50% of the total purchase price of the car, plus any negative on the last.

If you can get another credit card with a money transfer option will you be able to afford to repay the additional debt within the 0% interest free period or will you need another credit card to balance transfer in a year and keep shuffling until you ran out of credit or ran out of low interest offers?

Sounds like you are over committed but hope it works out all ok in the end.

Would VT'ing affect my credit rating though if thats the case? Motonova have today said I could do this, but they would then transfer the outstanding debt to a recovery company and it would affecy my credit negatively..

DrEskimo

capp324 wrote: »

Would VT'ing affect my credit rating though if thats the case? Motonova have today said I could do this, but they would then transfer the outstanding debt to a recovery company and it would affecy my credit negatively..

From what I've read, it will have no adverse effect on your future ability to borrow money.

"Any termination of a finance agreement will be noted on your credit record, but no details of why it was terminated will be displayed. This is not uncommon, despite what a car dealer or finance company may tell you in order to intimidate you."

https://www.thecarexpert.co.uk/car-finance-voluntary-termination-pcp-hp/2/

Could you not pay the £5k shortfall, and then start the procedure of VT? That way there is not outstanding debt and therefore no need to transfer anything to anyone?