Natwest Car Loan - In a pickle!

The_Offside_Rule

Good morning Savers.

I'm a pickle and could really do with some advice please!

I took a 54 month car loan with Natwest before Christmas 2015 and have 11 months left. I have never missed a repayment at all.

There is £1600 left on the balance.

A few days ago, I was involved in car crash (in the car in question) nobody was hurt and the other driver has admitted full liability.

My car is going to be a write off and the insurance want to send a cheque for £2000. I don't believe that to be a fair valuation based on the condition of the car before the incident and will challenge it.

My problem is an obvious one in that I am going to be left with just £400.

I have set up an appointment with Natwest to see what, if anything they can do to help.

Can you please share your recommendations regarding how I should approach the meeting?

Ideally, I'd like them to waive the remaining balance but of course that is super unlikely to happen. So again, how should I approach in the meeting and what do you think they may suggest?

Kind regards

[Deleted User]

They'll tell you the loan is still due to be settled. If you make a lump sum payment, they will tell you whether any remainder will be collected in your normal payments, or if the payments will be reduced to match the remaining term.

Don't ask them to write off the balance if you feel you may want to borrow in the future. Not just because it won't happen, but they may keep an internal record and view you as a higher risk.

Personally, I would cancel the meeting, as it all appears a little odd.

DrEskimo

Have you not been able to build any savings whilst paying down this debt for the last 43months?

If not then I think that is an area you need to address, to ensure you budget appropriately to pay down debts faster, and allow yourself to build savings for this like replacing cars.

Is the loan secured on the car, or is it just a personal loan? If it's the latter then just don't settle it. Keep the £2k and buy a car using that and continue to pay down the loan for the remaining 11months (or even faster if you can cut your budget and find some money to overpay on the loan).

Not sure what you hope from the meeting, other than just discussing ways to borrow more money.

Jmaho

I'm struggling to get my head around this! You took out a loan with Natwest and decided to use the money to purchase a car. Now due to the accident you have been left with less money than you think the car is worth so now you think the bank should waive the £1600 that you still owe? Are you actually serious? I've never read anything so ridiculous in my life! Why should they let you off the £1600???

Dobbibill

You will still need to pay the loan.

A GAP policy may be something you want to consider for your next purchase if you are going to finance it.

The_Offside_Rule

Further to my post, I was wondering if they would accept a reduction in payments but of course the term would be extended which is fair enough, or would they put a hold on repayments for a certain amount of time.

I was just wondering what, if any concessions they could make at their discretion.

zx81 - I don't know what is so "odd" about asking for a bit of advice.

DrEskimo - I have been able to save, but for the upkeep of the car (MOT, servicing etc). The loan isn't secured against the car but when I applied for the loan, I stated that the purpose of the loan was for a vehicle purchase.

Jamho - When did I say I think they should waive the loan? I stated that it would be hypothetically ideal if they were to do so. Perhaps read my post before commenting. Additionally, if my post is "the most ridiculous thing you've ever heard" then you've lived a very sheltered life, Jen.

[Deleted User]

I didn't say asking for advice was odd. I said the meeting seemed odd.

DrEskimo

As it's not a secured loan on that particular car, you don't have to settle it when you get the cheque from the insurance company. The loan is still be used to finance a vehicle.

Fight for a better valuation from the insurance, then when that cheque comes use it to buy a replacement car similar to yours. Keep the loan as is.

You can talk about reducing the loan payments by extending the term, but is that necessary? Ideally you want to be working out how to do the exact opposite!

Write up a good detailed budget and work out how you can make your salary go further by cutting spending (posting a Statement of Affairs over on the Debt Free Wananbe forum can be very helpful). The quicker you clear the debt, the less interest you pay, and the quicker you can start putting that monthly loan cost into your savings!

Clive_Woody

Your car has been depreciating in value while you have been repaying the loan. If you think it was worth more than £2000 when written off then you can challenge this but will need to provide evidence why you think it was worth more.

Natwest are not going to write-off your loan, but as mentioned there is no reason to pay the loan off in full now. You can use the insurance pay out to buy a car of equivalent value to the one that was written-off and continue making the loan repayments as before.

Edi81

What’s the difference between them waiving the balance and waiving the remainder of the loan?
Can’t quote on phone but you said it first!

BoGoF

Even if they were to agree to extend the term of the loan this will likely be seen as an 'arrangement to pay' marker and trash your credit history.

Like others have said the whole meeting thing is bonkers. Unless you can show financial hardship and are prepared to have your credit history affected, it is a complete waste of time.