Stuck with a car I can't afford and massive neg equity, please help?

Car_54

Sleazy wrote: »

Park it in Liverpool for the weekend.

This is supposed to be money-saving. It won’t need a whole weekend.;)

Cornucopia

facade wrote: »

I get it, but that isn't what I understand by "settlement" it is a handback.

And it explains why we are talking about the famous "negative equity" in something that you don't actually have any interest in on PCP, so has no actual value to you.

The settlement figure should be what is left of the capital, including balloon, plus whatever fees they can get away with, and that has to go down every month.

The option the OP is examining is trading it in for a different car. That WILL involve a liability for the difference between the value of the vehicle and the outstanding finance balance.

Herzlos

You can trade the car in for a new deal on something else and roll over the negative equity (£4k). That'll waste a fair bit of money but you won't need to stump up any cash and you might save a bit.

BethanyD

When a vehicle is a total loss the driver is often left in a negative equity position. This situation is not disimilar



If you contact a company that specialises in total loss, they can arrange a replacement car, finance the negative equity plus the deposit required (as a personal loan) and also finance the replacement car.


My advice would be to go to a company that deals with trade cars as opposed to dealer - they are at least 10% cheaper than dealer prices and are often in better condition.

motorguy

ReservoirDodds wrote: »

Hello,

Long story short, in January this year I got a promotion at work, with a several hundred pound per month wage rise. In my infinite wisdom, I rushed to purchase a new luxurious car as my commute equates to 88 miles per day and I wanted something comfortable to drive in.
I foolishly maxed my credit card putting down a 2k deposit on a car costing me £371 a month on PCP. (Yes, I know, I'm an idiot).

My issue now is, I've recognised the error of my ways and I wish to change my car to something far cheaper so I can start making a dent on my credit card repayments.
Unfortunately, my car is valued at 17.5k currently, and when I was shopping around a month or two ago, my settlement figure was around 20k, however I checked again this morning and it is now at £21800. Obviously this negative equity is a killer, I'm about 8 months into an agreement and I have no money to front a deposit more than about £200/300.

Any advice to help a complete fool get their finances back in order?
Thank you.

And what are you going to replace your car with?

As Adrian has said, the mileage you do is not to be sniffed at and ANY car is going to need to be young enough to be reliable, but still depreciate / have running costs.

One option might be to take a loan out for say, £5000, used roughly half of it to make up the negative equity and then buy as good a used car as you can privately for the difference (thus getting maximum car for your money).

You'd get a decent enough Honda Civic diesel or a Toyota diesel that would do those miles relatively reliably.

Ectophile

To me the best option would be to just carry on paying the finance.


The alternative is to give the car away, paying a few thousand pounds for the privilege of having it taken away.


Then the OP has no car, and has to pay for another one to replace it. And the new car will presumably be on finance again.

Grey_Critic

The agreement will state a mileage limitation - standard praactice. If you exceed that then you will be charged so much per mile. Your theoretical mileage is 430 miles per week minimum. Add in traffic diversions, trips to the shops etc then you are doing around 500 per week. that is around 25,000 miles per year no wonder the depreciation is so high. Most of these schemes are based on around 6.000 miles per year. You can agree a greater mileage when taking out the loan (which is really what it is) and the repayements will reflect this.

motorguy

Grey_Critic wrote: »

The agreement will state a mileage limitation - standard praactice. If you exceed that then you will be charged so much per mile. Your theoretical mileage is 430 miles per week minimum. Add in traffic diversions, trips to the shops etc then you are doing around 500 per week. that is around 25,000 miles per year no wonder the depreciation is so high. Most of these schemes are based on around 6.000 miles per year. You can agree a greater mileage when taking out the loan (which is really what it is) and the repayements will reflect this.

I think the O/P knows why they're in the position they're in - they're looking for advice on how to get out of it.

motorguy

Ectophile wrote: »

To me the best option would be to just carry on paying the finance.


The alternative is to give the car away, paying a few thousand pounds for the privilege of having it taken away.


Then the OP has no car, and has to pay for another one to replace it. And the new car will presumably be on finance again.

I think you're right in that no matter what the O/P does, the Piper has to be paid (ie, the negative equity needs to be cleared).

Chances are they would be much better running on at this deal than trying to bail on it and taking on another PCP deal.

debtdebt

Your financial position hasn't changed since you got the car so why are you moaning? You should have thought longer and harder before signing up for it rather than regretting your decision now.