Hire Purchase Help?!

ryan121

DrEskimo wrote: »

In what way is this relevant to the OP?

It's a way of getting out of the agreement. They can try and get a cheaper car at a lower rate. They should just consider it as leasing up to the VT point. I was in a similar situation as the OP. I gave up the car and got a cheaper one.

DrEskimo

ryan121 wrote: »

It's a way of getting out of the agreement. They can try and get a cheaper car at a lower rate. They should just consider it as leasing up to the VT point. I was in a similar situation as the OP. I gave up the car and got a cheaper one.

Look at how much interest is involved.

We don't know how much the OP put down of their own money upfront, but lets assume it was £500.

So that's £500 upfront, + £319*60 = £19,640. For a car worth £11,500.

The VT would be £9,820, around 30months in, for a car originally worth £11,500 and then just hand it back. That's equivalent to paying the car with cash and then handing it to a scrap yard 30months later for £1,680...

It seems like an awful idea, and the best way the OP can save money is to pay the finance off as quick as possible and then just run the car payment free for as long as possible.

ryan121

DrEskimo wrote: »

Look at how much interest is involved.

We don't know how much the OP put down of their own money upfront, but lets assume it was £500.

So that's £500 upfront, + £319*60 = £19,640. For a car worth £11,500.

The VT would be £9,820, around 30months in, for a car originally worth £11,500 and then just hand it back. That's equivalent to paying the car with cash and then handing it to a scrap yard 30months later for £1,680...

It seems like an awful idea, and the best way the OP can save money is to pay the finance off as quick as possible and then just run the car payment free for as long as possible.

If they can afford to make significant repayments then yes pay it off but if not being able to get out after 2.5 years instead of 5 years is an option. I just want the OP to know they're not trapped paying for this car for 5 years. I was in the same situation with a much worse rate before so I'm only suggesting it as an option if they can't make significant enough additional payments.

DrEskimo

ryan121 wrote: »

If they can afford to make significant repayments then yes pay it off but if not being able to get out after 2.5 years instead of 5 years is an option. I just want the OP to know they're not trapped paying for this car for 5 years. I was in the same situation with a much worse rate before so I'm only suggesting it as an option if they can't make significant enough additional payments.

Fair enough...

I just don't see what relevance it has given what the OP asked...

Beddz wrote: »

What is the best course of action to get this paid off ASAP... Is it worth saving up a bulk amount £10-11,000 or just pay as much as I possibly can each month

But yes, it's something to keep mind I guess! :beer:

Beddz

Sorry for another stupid question. IF I manage to stick to paying £1000 a month extra on top of the original
monthly payments of £319 should the debt be cleared within 1 year? I just don't want to commit to paying £1000 a month extra for 12 months and they turn around and say I still owe god knows how much still towards the £19,000 obviously front loaded interest on the original £11,000 borrowed

[Deleted User]

There's obviously no front loaded interest on your loan.

An extra 12k will come straight of the capital and the daily interest will therefore be less.

Beddz

I've just rung up she said the interest is front loaded? And the current balance is £19k+?

[Deleted User]

She's wrong. It's been outlawed for a decade.

She's telling you the current balance if it were to go to term.

You want a settlement figure, which will be currently capital plus two months interest.

Beddz

Like previously mentioned in this thread, whatever the difference is in my monthly payment reduction I should make up on the extra's payment right? God bless this forum without it I'd be clueless.

foxy-stoat

Forget about overpaying £1000 - thats only 3 months worth of payments, sell the £11,000 car you have bought and buy a cheaper one, say £2500 and overpay whatever is left.

Buy a £11,000 car when your in a better financial position.