Hire Purchase Help?!

DrEskimo

foxy-stoat wrote: »

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.

I was under the impression the OP wanted to pay an additional £1000 every month.

I agree with what you are saying, but since the OP has already bought the car and can now seemingly afford to overpay at a decent rate, I don't see much sense in selling at a loss, as it's likely they will probably only get around £8k as a private seller, or even less as trade value...

Settlement after 2 months would be about £11,250. So selling for £8k leaves £3,250 outstanding. Leaving £2,500 a side for another car means still having a loan for £5,750. Overpaying would take 6months and cost £350 in interest.

To keep the current car, it would take around 9/10 months to pay off in full if you overpay £1,000 each month, and would cost you about £1,000 in interest.

So it's taking a hit of around £3k to save £650 in interest, and of course being left with a £2,500 car after 6months instead of a £11,000 car after 9months.

Doesn't seem worth it to me personally. Just keep overpaying as much as possible, and shift any of it to lower interest rate with 0% credit cards if possible...