Car Finance outweighs value of Car

SThom87

Morning,

I have £8400 left on my car finance agreement and the car is currently now valued at a lot less.

My contract says if I pay half the value of the overall contract (overall contract was £10,200) then I can give the car back to the finance company. Has anyone ever done this?

I still have around 49 payments to make, and have thought about paying this off with a credit card if possible. Looking at all options at the minute and any advice would be great.

Thanks

jonesMUFCforever

Did the overall contract figure include interest?
You need to factor that in as well.

Nebulous2

Yes it's a well-trodden route that people go for a voluntary termination and hand back the car. You need to be clear what you needed to pay in total and how much you need to contribute to reach the 50% mark.It's common for cars to spend a lot of the payment period in negative equity. Here's some basic information on VT.

tempus_fugit

Yes, have done this before. You have to check the original documentation to check the original contract value, which as jones MUFC says will likely include interest and possibly other things too. If you have paid at least half of that contract total then you can return the vehicle with nothing more to pay. We did this with a Rover years agao as their market value had tanked due to them going bust. The car was collected by the finance company, it was all very straightforward.

supersaver1000

Yes we did a VT. We were going to a part-exchange, but the value they were giving us would have left us with (from memory) about £1,500 deficit - which we would have had to add to the new car loan. I realised that we were something like £300 away from being able to return the old car and walk away. We phoned up the finance company for an accurate figure, paid the difference and were able to buy the new car from scratch, saving us the £1,200 difference.

SThom87

Thanks for your help, much appreciated. The full amount includes all the interest and insurances too. My only concern is the how they see the condition of the vehicle, a dent and scratch put in by the RAC will work against me I can imagine.

Terence_Burrows

SThom87 wrote: »

Morning,

I have £8400 left on my car finance agreement and the car is currently now valued at a lot less.

My contract says if I pay half the value of the overall contract (overall contract was £10,200) then I can give the car back to the finance company. Has anyone ever done this?

I still have around 49 payments to make, and have thought about paying this off with a credit card if possible. Looking at all options at the minute and any advice would be great.

Thanks

Is this on HP Or PCP?

molerat

Terence_Burrows wrote: »

Is this on HP Or PCP?

And the difference is ?

chelseablue

Curious to know, does voluntary terminating do anything negative to your credit report? Or does the account just show as settled and closed?

k3lvc

SThom87 wrote: »

I still have around 49 payments to make, and have thought about paying this off with a credit card if possible.

49 payments left to make and your almost half way through - either you made a significant deposit/PX or your figures are dodgy


And unllikely you can pay off directly via credit card - it'll need to be 'cash' in some format (bank transfer, debit card etc albeit potentially funded by another loan)