Moneybarn HP - Voluntary Termination & Payment Holiday

Wightknight

Afternoon all,
Just after a bit of advice - I've been to National Debt Line and the Money Advice service, but not had any real answer... other than to speak with Moneybarn.

I am more than half way through a 48 month HP agreement with Moneybarn, but due to financial difficulties when Covid hit (reduced salary) I applied for a 3 Payment Holiday. These missed payments were added to the end of the agreement. I have received a Notice of Sum of Arrears, but no default notice.

I am still in difficulty, and am looking at trying to reduce my costs by moving onto a PCP deal elsewhere, for which I have been accepted. 

If I was to VT my agreement with Moneybarn, do I need to repay the three months I took the holiday with? 

I pay £460 a month – Car price was £13,500 in Jan 2018, total payable was £21,769, I’ve repaid £12,963. The car is worth somewhere between £7k and £8k (whether it will get anywhere near that at auction is anyones guess). 

Any advise would be gratefully received? I can't afford to pay 3 months worth of payments to avoid the harm it will do to my credit file!

neilmcl

Unfortunately, although liability extends to 50% of the total amount payable of the contract if you wish to VT this does not include any arrears and whilst you can still terminate you will still be liable for the 3 months worth of arrears. I might be worth terminating the agreement and taking out a small bank loan to pay off the arrears.

Wightknight

neilmcl said:

Unfortunately, although liability extends to 50% of the total amount payable of the contract if you wish to VT this does not include any arrears and whilst you can still terminate you will still be liable for the 3 months worth of arrears. I might be worth terminating the agreement and taking out a small bank loan to pay off the arrears.

Ouch - I preferred your answer before the edit! Hmmm will need to give this some thought.

neilmcl

Wightknight said:

neilmcl said:

Unfortunately, although liability extends to 50% of the total amount payable of the contract if you wish to VT this does not include any arrears and whilst you can still terminate you will still be liable for the 3 months worth of arrears. I might be worth terminating the agreement and taking out a small bank loan to pay off the arrears.

Ouch - I preferred your answer before the edit! Hmmm will need to give this some thought.

Yeah, sorry about that just needed to fully check my facts.

bigadaj

OP why have you moved onto another PCP if you can't afford this one?

Wightknight

bigadaj said:

OP why have you moved onto another PCP if you can't afford this one?

Fair comment, this one is HP and is costing £463 a month, I’m moving onto PCP at £260... so saving a considerable amount. 

molerat

Wightknight said:

bigadaj said:

OP why have you moved onto another PCP if you can't afford this one?

Fair comment, this one is HP and is costing £463 a month, I’m moving onto PCP at £260... so saving a considerable amount . 

in monthly payments only. 

What are you going to do at the end of the term ?  A car salesman's dreams come true !

ontheroad1970

What happens when you get to the end of the term and don't have the money for the balloon, and supposing you go for another PCP to follow this one and for some reason you get declined?  Check the number of miles allowed each year on average over the term.  Remember also that any interest is on the whole sum including the balloon payment which never goes down.  

The net result of this is that if a VT is needed and allowed (not all PCPs allow them if they are a fixed sum agreement) you won't reach the 50% point until very near the end of the agreement.  

Make sure you have done all your homework before proceeding.  Good Luck.

neilmcl

Wightknight said:

bigadaj said:

OP why have you moved onto another PCP if you can't afford this one?

Fair comment, this one is HP and is costing £463 a month, I’m moving onto PCP at £260... so saving a considerable amount. 

And how much deposit are you going to have to stump upfront?

Also, have you considered taking out a cheaper bank loan to settle the HP agreement so you can keep your existing car. Might be worth getting a settlement figure to see how much that would be.

DCFC79

What happens in 6 months time you realise it was a misrake OR you need to cut your spending more.

lopsyfa

You will have been better of taking a small personal loan to settle the current HP and keep the car for as long as possible or better still VT the current HP and buy a banger. As has been already pointed out, the PCP will just delay part of the payment until the end resulting in higher interest compared to an HP.