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Family debt

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So 2 years back my seemingly reliable car broke down beyond the point of economic repair. My parents offered to pay for a replacement and I pay them back interest free over 3 years. At the time I had an ok paid job, my husband was earning well and all was good. I took my parents offer up as we were hoping to apply for a mortgage a few months later. 
Now I'm sure you can see what's coming! So I lost my job. Got a new one but it pays less than before and my husband left! My finances are really tight, the rent is a large portion of my pay. Hence I've not been paying my folks for a while. They don't mind at all but it really bothers me. So I'm thinking of selling the car and giving my parents a lump sum and then slowly pay the difference back. I could manage for a while without a car and save up for an old run around. 
Am I missing anything here? Any downsides to this plan? 
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  • Karonher
    Karonher Posts: 958 Forumite
    Part of the Furniture 500 Posts Name Dropper
    Could you take on extra work to allow you to pay your parents a little more? That would mean that you could keep the car.
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  • I agree, you probably need your car. I downgraded my car last year and it's cost me an absolute fortune on repairs. Try the extra income forum!
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  • Mr87
    Mr87 Posts: 122 Forumite
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    Could you sell anything else? What sort of sums are involved? I'm assuming that you've no other debts other than the loan from your parents? I agree getting a cheap little run around can actually cost you more in repairs, especially if the history is sketchy. 
  • EimearF
    EimearF Posts: 203 Forumite
    Fourth Anniversary 100 Posts Name Dropper
    If your parents dont mind then I wouldnt be rushing to sell your car and pay them back. You are going through a hard time and if your family can afford to be generous toward you then let them, I am sure you wouldnt want your parents selling something they needed to pay you back if you didnt need the money back immediately. Keep making smaller payments to them that you can afford so you can still 'repay'. To show you are grateful you can do something nice and inexpensive for them like making dinner for them once a week/ fortnight (obviously after lockdown!)
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  • warby68
    warby68 Posts: 3,135 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    edited 10 April 2020 at 8:25AM
    If your parents are genuinely happy to help, I'd let them - these are difficult times even without the adjustments to your personal life. If it was 2 years ago and a 3 year deal presumably you've paid roughly half at least. I'd just do the second bit of your plan of slowly paying them back, even if only a tenner a month for now. If they sudddenly start to need the money you could sell then but while they are comfortable it seems like unnecessary hardship for you. If the current car is running well, that's another reason to hang on to it rather than none followed by unknown replacement.
    As long as you aren't living a life of luxury of course thereby choosing luxury over the car and I STRONGLY suspect you are not.
  • fatbelly
    fatbelly Posts: 22,950 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    So 2 years back my seemingly reliable car broke down beyond the point of economic repair. My parents offered to pay for a replacement and I pay them back interest free over 3 years. At the time I had an ok paid job, my husband was earning well and all was good. I took my parents offer up as we were hoping to apply for a mortgage a few months later. 
    Now I'm sure you can see what's coming! So I lost my job. Got a new one but it pays less than before and my husband left! My finances are really tight, the rent is a large portion of my pay. Hence I've not been paying my folks for a while. They don't mind at all but it really bothers me. So I'm thinking of selling the car and giving my parents a lump sum and then slowly pay the difference back. I could manage for a while without a car and save up for an old run around. 
    Am I missing anything here? Any downsides to this plan? 
    Not really.
    If your finances are tight and you can survive without a car then getting rid of it will save you on average £150 per month, plus you have no fear of the multitude of fines associated with owning a car.
    As a rough guide the car will now be worth around half of what you paid for it so that lump sum  may be smaller than you think.
    Use the money to pay any debts that are (a) priority and/or (b) carry interest. 
    Your parents are only expecting the monthly payment so just keep on doing that and put any surplus lump sum into an emergency fund/car fund pot. 




  • Fireflyaway
    Fireflyaway Posts: 2,766 Forumite
    Fifth Anniversary 1,000 Posts
    I work from home ( usually, not because of the current restriction) so only use a car for social outings. That's why I figured a cheap run around would be fine. However I do see that it might cost in other ways, repairs and tax etc! I think trading down might also cause my parents to worry. I don't have a bunch of debts and I'm definitely not living an extravagant lifestyle. My rent takes 76% of my take home pay. I like the idea of earning some extra cash. Not sure how. If I was on my own I'd get a weekend job but I really don't want to leave my child at weekends, emotionally I need to be there after all that's gone on. Might see if there is something I could do remotely. I do agree paying something small each month is preferable to paying nothing. At least it shows I'm trying. 
  • fatbelly
    fatbelly Posts: 22,950 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    Cars are pretty reliable these days and the folks on the motoring board will have some hints and tips - you will the hard core on the bangernomics thread.
    Offloading the car might be difficult at the moment as I don't think there is much market in them,  so this might be something to consider once the restrictions are lifted.
    I guess you could SORN it for a bit and at least save the road tax
  • Fireflyaway
    Fireflyaway Posts: 2,766 Forumite
    Fifth Anniversary 1,000 Posts
    I don't pay road tax and the insurance is cheap. I fill just 1 tank a month so running costs are pretty low. I just thought selling it was a way to pay back a back a chunk of what I owe my parents. Overall I probably need to up my income because even without this issue I'm not left with much money at all after bills. 
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