Car HP.

Kerenza

OK I realise this is really weird  but I need advice.
My husband bought a car on hp and before he finished the payments he traded his car in for another car again on hp again before he finished the payments he traded this car in for yet another car. He is now paying over £300 a month for a car that is worth less than £10,000. 
I know most people will say !!!!!! but this does`nt help me the wife who did`nt realise what he was doing until it was too late.
I`ve checked and it seems this is quite legal even though morally and ethically it is so wrong.
My question is is there anything that can be done? How can finance companies allow this to happen? Please don`t suggest divorce. My hubby may have been mislead but he is still my hubby. Basically he is paying for 3 cars when he only "owns" one.

molerat

Buy car on HP

Before end of term trade in car, dealer pays off HP and sets up new agreement rolling any negative equity into new deal

Rinse and repeat

He is not paying for 3 cars, he is paying for the negative equity on the 2 cars he traded in.  No dealer would risk taking a car that has outstanding finance without clearing it.  Are you sure it is HP and not loans, that is the only way he would be paying off 3 different accounts.

I am afraid there is only one person at fault here and you need to decide the punishment !

Grumpy_chap

He is not paying for three cars.
He has one car worth £10k.
He also has a finance agreement worth £???k (you don't say in the OP) so the £300 per month is to pay for that money that he had and used.  It is irrelevant to the finance company what he used the money for.

To really understand this, though, the important numbers are

• how much debt is remaining?
• how long is the £300 payable for?  
• What APR?

Once you know all the above, it is possible to look at the best way to finance / refinance if possible.

Using a calculator (https://www.moneysavingexpert.com/loans/personal-loan-calculator/) £10k over 3 years at 4% APR is £295 per month.  If the loans match this profile, I'd say it is not too bad.

[Deleted User]

Kerenza said:

OK I realise this is really weird  but I need advice.
My husband bought a car on hp and before he finished the payments he traded his car in for another car again on hp again before he finished the payments he traded this car in for yet another car. He is now paying over £300 a month for a car that is worth less than £10,000. 
I know most people will say !!!!!! but this does`nt help me the wife who did`nt realise what he was doing until it was too late.
I`ve checked and it seems this is quite legal even though morally and ethically it is so wrong.
My question is is there anything that can be done? How can finance companies allow this to happen? Please don`t suggest divorce. My hubby may have been mislead but he is still my hubby. Basically he is paying for 3 cars when he only "owns" one.

What do you expect to be done? Finance companies aren't ethical, they operate to make money, charging interest at all, to some people, is unethical. To others, trying to find ways out of paying what is owed is unethical.

The answer is to stop your husband doing this before he gets destroyed by debt and goes bankrupt - try and work out why he feels the need to keep swapping cars and fix that. In the mean time, pay off this car and use it instead of replacing it.

macman

There is no indication that hubby is in debt, struggling with the £300pm repayment, or regularly swapping cars. No timescale was quoted: it could be once every 3 years or so?

[Deleted User]

macman said:

There is no indication that hubby is in debt, struggling with the £300pm repayment, or regularly swapping cars. No timescale was quoted: it could be once every 3 years or so?

No indication he's in debt? Did you read the post? He pays £300 a month for the third consecutive rollover car loan! Of course he's in debt.
Where did I say he was struggling? However if he keeps the cycle up of trading in cars, getting new finance, increasing his debt and increasing his payments, he will be.

Edi81

At some point if there is negative equity being rolled the finance company will stop lending.
sounds as though the OP needs to have a full open discussion with other half. 

Grumpy_chap

Deleted_User said:

macman said:

There is no indication that hubby is in debt, struggling with the £300pm repayment, or regularly swapping cars. No timescale was quoted: it could be once every 3 years or so?

No indication he's in debt? Did you read the post? He pays £300 a month for the third consecutive rollover car loan! Of course he's in debt.
Where did I say he was struggling? However if he keeps the cycle up of trading in cars, getting new finance, increasing his debt and increasing his payments, he will be.

Does the OP know how much negative equity has been rolled over?
£300 per month on £10k car may not be a poor deal.

[Deleted User]

Grumpy_chap said:

Deleted_User said:

macman said:

There is no indication that hubby is in debt, struggling with the £300pm repayment, or regularly swapping cars. No timescale was quoted: it could be once every 3 years or so?

No indication he's in debt? Did you read the post? He pays £300 a month for the third consecutive rollover car loan! Of course he's in debt.
Where did I say he was struggling? However if he keeps the cycle up of trading in cars, getting new finance, increasing his debt and increasing his payments, he will be.

Does the OP know how much negative equity has been rolled over?
£300 per month on £10k car may not be a poor deal.

It's more the fact that she talks about him trading in and taking out new finance, rolling debt over onto a new car before the deals are finished which indicates the problem. He is paying "over £300" as well. I was paying less than £300 a month on a brand new 25k car, albeit one on 0% finance (a car I still have 6 1/2 years later incidentally, as I see no reason to try and have new cars regularly). It sounds like every deal is more expensive and perhaps the next will be £400, the next £500....

MrFrugalFever

To understand whether what you have said is a problem, we would need to understand the whole picture....such as;

- What was the first cars part exchange value vs settlement? If negative, was it put in to the 2nd car finance agreement?
- Again, what was the second cars part exchange value vs settlement? If negative, was it put in to the 3rd car finance agreement?
- What was the reasoning for changing cars and how often?
- What was the reasoning for a HP over a PCP if he changes fairly regularly?

£300pm for a £10k HP loan sounds pretty reasonable to me, most HP loans max out at 60 months.

again, we do not have any information as to the structure of the loan (APR, TERM ETC)

With HP finance you will have the option to Voluntarily Terminate the agreement once 50% of the total amount payable has been achieved, so if money is tight you could look at doing this or refinancing the deal on a lower APR rate.

rolling negative equity is something that happens, it can be easily done, however it is not an accepted practice and is in effect against FCA regulations.

unless you can’t afford the repayments, I see no issue here.

macman

Deleted_User said:

macman said:

There is no indication that hubby is in debt, struggling with the £300pm repayment, or regularly swapping cars. No timescale was quoted: it could be once every 3 years or so?

No indication he's in debt? Did you read the post? He pays £300 a month for the third consecutive rollover car loan! Of course he's in debt.
Where did I say he was struggling? However if he keeps the cycle up of trading in cars, getting new finance, increasing his debt and increasing his payments, he will be.

Yes, I did read the post. We have no idea of the OP's husband's income or assets. £300pm may be perfectly affordable. The OP was somehow under the impression that he was still paying for the previous 2 cars, which of course is not the case. 
It used to be routine for people to change their car every 3 years, whatever the means of finance.  Obviously, if he's swapping it in every year, the odds are that he's increasing the debt, but we don't have any actual evidence of that.