Advice needed on some consolidation of credit that has backfired.

Rajix

Hello, looking for some advice on a position I've found myself in. I currently have a car on finance and have owned it for 2.5 years at £322pcm (HPI). Because the UK is going through a difficult economic phase I decided to reassess my finances and as I have paid more then 50% off the finance I decided to initiate voluntary termination and return it to the finance company (this process isn't complete yet, I still have possession of the car and have delayed the termination while I work out my problem). I took out a personnel loan to buy another car at a lower monthly cost of £230 PCM knowing I would not be paying the HPI payments anymore, therefore saving around £100. NOW, to the problem. I have bought the new car and owned it for 3 weeks and the car has developed an electrical fault that renders it pretty much useless, as the car was bought privately it seems I have no recourse. The seller doesn't want to know and pretty much claims 'sold as seen' 'no warranty'. So as it stands I'm paying £322 for the HPI car and £230 for the loan on the new car. My next step is to take out a considerable loan to pay off both the HPI and personnel loan and clear a credit card and then to sell the car I bought with the loan at a massive discount so whoever buys it can repair it. I need to borrow around £17000 to make this happen. This whole thing sounds ridiculous I know. I've no idea what to do with it. I cannot afford to pay both payments as they will total almost £600. I can pay both for a couple of months but nothing more Taking out another loan to clear everything is my only option, right? 

MikeJXE

Not right in my opinion,  as far as I know you can't borrow yourself out of debt.

Rajix

MikeJXE said:

Not right in my opinion,  as far as I know you can't borrow yourself out of debt.

You're possibly right there but then why do banks offer consolidation loans?  What's the correct course of action? default on my current credit arrangements? 

MikeJXE

Rajix said:

MikeJXE said:

Not right in my opinion,  as far as I know you can't borrow yourself out of debt.

You're possibly right there but then why do banks offer consolidation loans?  What's the correct course of action? default on my current credit arrangements? 

Because they want your money, no idea what your course of action should be but I'm sure someone will tell you 

400ixl

What is the electrical fault? Once you know the cost of fixing that you will have a better idea of what actions to take.

Rajix

400ixl said:

What is the electrical fault? Once you know the cost of fixing that you will have a better idea of what actions to take.

Its the main control junction box (electrical brain of the car). Garage has quoted £2400 for repairs...

DrEskimo

First question is whether VT is the right thing to do with your first car.

What is the HP settlement figure today, and how much is the car valued at? What would the likes of WBAC give you? It's entirely possible the car is worth more than you owe.

How much did the second car cost, and do you have finance on the total amount?
Have you had multiple quotes on getting it fixed?

MalMonroe

Hi, no, please don't take out another loan. Throwing more money at the problem won't fix it, I know that from personal experience. You'll just get deeper into debt. As MikeJXE says above, financial institutions want your money - and they will charge interest on any loan, naturally.

If I were you, and this is just my own opinion of course, I would get that voluntary termination sorted out as quickly as possible so that I wasn't paying out far too much per month. 

And if you can prove that the 'new' car had a fault when you bought it, you could possibly bring a case against that private seller in the small claims court.

Check online to see if there's anything about that control junction box on the car's MOT notices and its history. You can find out in this link -

https://www.gov.uk/check-mot-status

If there is, that may be of great help if you do decide to try small claims court.

But also you could try phoning Citizens Advice in the first instance, they should be able to point you in the right direction to get things sorted out. 

https://www.citizensadvice.org.uk/

They can also advise you on money matters, as can StepChange - https://www.stepchange.org/
and National Debtline - https://nationaldebtline.org/

I'm really sorry that you're in this position, it's not very nice. But please - don't buy a car from a private seller again. That's something else I've done in the past and regretted bitterly. Because they've got your money, and you have a dud. I ended up with a dud too.

I hope some of this is helpful, I hate it when some unscrupulous people get away with taking honest people's money in return for a pile of junk. All the best to you.

Rajix

MalMonroe said:

Hi, no, please don't take out another loan. Throwing more money at the problem won't fix it, I know that from personal experience. You'll just get deeper into debt. As MikeJXE says above, financial institutions want your money - and they will charge interest on any loan, naturally.

If I were you, and this is just my own opinion of course, I would get that voluntary termination sorted out as quickly as possible so that I wasn't paying out far too much per month. 

And if you can prove that the 'new' car had a fault when you bought it, you could possibly bring a case against that private seller in the small claims court.

Check online to see if there's anything about that control junction box on the car's MOT notices and its history. You can find out in this link -

https://www.gov.uk/check-mot-status

If there is, that may be of great help if you do decide to try small claims court.

But also you could try phoning Citizens Advice in the first instance, they should be able to point you in the right direction to get things sorted out. 

https://www.citizensadvice.org.uk/

They can also advise you on money matters, as can StepChange - https://www.stepchange.org/
and National Debtline - https://nationaldebtline.org/

I'm really sorry that you're in this position, it's not very nice. But please - don't buy a car from a private seller again. That's something else I've done in the past and regretted bitterly. Because they've got your money, and you have a dud. I ended up with a dud too.

I hope some of this is helpful, I hate it when some unscrupulous people get away with taking honest people's money in return for a pile of junk. All the best to you.

Thank you

Rajix

DrEskimo said:

First question is whether VT is the right thing to do with your first car.

What is the HP settlement figure today, and how much is the car valued at? What would the likes of WBAC give you? It's entirely possible the car is worth more than you owe.

How much did the second car cost, and do you have finance on the total amount?
Have you had multiple quotes on getting it fixed?

Settlement on the first car is £7800 and the loan for the 2nd is unsecured at £8000 (its a personnel loan). The 2nd car although priced the same has vastly cheaper running costs. The car on HPI in the current economic climate just isn't affordable moving into 2023. The idea behind this whole process was to free up £290 ish PCM between HPI. fuel, tax and alike. I did look at We buy Any Car before I took out the loan but they are low balling and will not offer anything close the remaining balance, hence the idea of initiating the termination. There was nothing on the history of the car to indicate this kind of problem. It only become apparent to me 14 days or so after purchase. I've had a couple of quotes yes, some are mildly cheaper but the ball park figure is the same. 

DrEskimo

Rajix said:

DrEskimo said:

First question is whether VT is the right thing to do with your first car.

What is the HP settlement figure today, and how much is the car valued at? What would the likes of WBAC give you? It's entirely possible the car is worth more than you owe.

How much did the second car cost, and do you have finance on the total amount?
Have you had multiple quotes on getting it fixed?

Settlement on the first car is £7800 and the loan for the 2nd is unsecured at £8000 (its a personnel loan). The 2nd car although priced the same has vastly cheaper running costs. The car on HPI in the current economic climate just isn't affordable moving into 2023. The idea behind this whole process was to free up £290 ish PCM between HPI. fuel, tax and alike. I did look at We buy Any Car before I took out the loan but they are low balling and will not offer anything close the remaining balance, hence the idea of initiating the termination. There was nothing on the history of the car to indicate this kind of problem. It only become apparent to me 14 days or so after purchase. I've had a couple of quotes yes, some are mildly cheaper but the ball park figure is the same. 

What are the two cars?

You would have saved ~£90 per month by simply using the new loan to settle the HP loan and then jus keeping your first car. Are the running costs really that much lower?

What are WBAC offering you for the first car? Have you also tried ringing local dealers/garages to see if anyone is interested?
IF the car is worth less and VT is the option you choose, are there likely to be any other costs, such as excess mileage or any damage beyond fair wear and tear?