Dro and hp car

laurenxx22

Hi, I currently have a car valued around 4.5k. Was 7k when I bought it and I have paid half off already. I am thinking about doing a dro but will Halifax car finance take the car off me or want me to sell it as my son is disabled and I have 2 other children so I need it for them. My monthly finance is £140 which I don't think is bad. I looked at my finance agreement and it doesn't say much about what will happen.
Thanks

sourcrates

Car value can only be up to £2000 for DRO purposes.

However, guidance states -

Hire purchase or conditional sale items are not legally yours until you pay for them in full. If you’re starting a DRO, you may have to return the item, or transfer ownership to someone else who can make the payments for you.

In some cases, you may be able to continue paying a hire purchase agreement and keep the goods. 

This will only be possible if:

• The goods are ‘essential’, for example household appliances you couldn’t do without
• The payments are up to date, and you have no arrears

But having said that, I believe the £2000 limit still applies.

fatbelly

The main point here is that the £140 payment will not be an allowable expense. Do you still qualify for a DRO on surplus income grounds?

ToxtethO'Grady

Sourcrates is right the £2,000 limit still applies for HP vehicles even though you won't own it. It has to worth less than £2K to be an allowable expense in a DRO budget.

If a thrird party paid it then it would be allowed at it is not you paying OP but you can't be seen to be giving the money to the 3rd party. If you receive DLA for your son that is for your sons care and if the payment comes from that it may be classed as nothing to do with your budget however that is a very hypothetical scenario that you would have to discuss with an intermediary. They can check with the Insolvency Service if that would be classed as a disregarded expense due to the essential nature of it and it is for his care.