Advice needed on some consolidation of credit that has backfired.

Rajix

DrEskimo said:

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?

The car on HPI is an Audi S4 it's a 3.0 petrol, the 2nd car the loan bought is a small diesel. The fuel, tax, HPI and insurance savings are around £150 pcm. The car on HPI (Audi) is in immaculate condition, its unlikely I'd have to pay anything additional if I returned it. I could have paid the Audi off with the loan yeah, but these cars come with big running costs. With how everything is at the moment downsizing to something smaller made sense...

Nebulous2

You are seeing the whole thing as one problem, and are looking for a simple answer - which you see as consolidation. 

Break it down and deal with a bit at a time, instead of going for broke with a £17k loan. 

Why do you need the loan first before voluntary termination or selling the second car? You could do either independently, to reduce your costs. 

If you terminated the HPI, could you raise the cash to repair the second car? Sure that means you've spent £10.5k on an £8k car, but another way to look at it, considering the costs are already sunk - is that an investment of £2.5k will get you an £8k car. 

Another option is to terminate the HPI, sell the second car, and use the cash to buy you a cheaper runaround. That leaves you with a cheaper car and still an £8k loan, but you could concentrate on paying that down early to clear your feet. 

This second car was an expensive mistake. You aren't the first, and won't be the last to lose money on a car. I've been there myself, I've made some decent financial moves in my lifetime, but my biggest mistake has been how much I've spent on cars. 

You're going to have to dig yourself out, either by running a cheaper car than you would like, or by spending more than you intended on the second car. Either way sounds a better option to me than throwing another £17k at it. 

[Deleted User]

Rajix said:

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? 

Banks will do loan calculations based on the assumption you'll take the £17k and spend it on other things and thus have 2x the debts to pay off i.e. 17k + 8900 + 7800 or whatever - hence no-one is going to give you that as you cannot afford the current two

[Deleted User]

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.

Sorry but this is completely incorrect.

Any private sale is done "sold as seen", provided there is no misleading information in the advert. Wasting money on a legal claim is also poor advice - even if OP paid an engineer to create a report and somehow proved there was a fault that was there at point of sale (highly unlikely given that the OP described it as developing a problem after), provided the seller didn't claim there was no problem with it, they wouldn't win anyway. If the seller sold in good faith and wasn't aware of a problem - which could have manifested in the 3 weeks due to something OP did anyway - then there is no recourse. 

Have you looked at what the MOT checks for on the electrical side of things? Hint - it doesn't involve looking for faults, it is about visual inspection of the wiring to make sure it's not damaged only:

Defect	Category
(a) Electrical wiring: (i) insecure or inadequately secured (ii) insecure and in contact with sharp edges or connectors likely to become disconnected (iii) likely to touch hot or rotating parts, drag on the ground or the connectors for braking or steering disconnected	Minor Major Dangerous
(b) Electrical wiring: (i) slightly deteriorated (ii) so damaged or deteriorated it is likely to cause a short-circuit (iii) for braking or steering components extremely deteriorated	Minor Major Dangerous
(c) Electrical wiring insulation: (i) damaged or deteriorated (ii) heavily deteriorated (iii) in such a condition there is an imminent risk of fire or formation of sparks	Minor Major Dangerous

Citizen's Advice will tell you the same as anyone on private car sales - you must be honest but do not have to declare anything unless asked except for if the car is not roadworthy (failing to declare this is illegal). If the OP asked specifically if the electrics were good and the seller knowingly said yes when they weren't, that is a problem, if they simply said they had not had any problems, there is no recourse

sourcrates

Hold fire before you do anything.

There are many companies out there that offer an ECU repair or exchange service, prices are around the £200-£300 mark, so not that expensive, and way cheaper than what the garage has quoted you.

This is just one site plucked from the web at random -

Prices | ECU Testing Prices | ECU Rebuild Prices | The ECU Doctor (the-ecu-doctor.co.uk)

poppasmurf_bewdley

Get some more prices quoted for the Electric Box - £2400 is a hell of a lot of money.  The motor trade is full of shysters and rogues, and they will fleece you if they can.  Only last week I had experience of this, with two places  trying to charge me three times what I eventually got the work done for.  

DrEskimo

Yea I think your next steps are:

• Be absolutely sure of the value of your S4. Ring a few places and see if you can get to the settlement figure. IMHO it will be far far easier to simply trade the car in than deal with handing the car back to the finance company.
• If the value is definitely lower than the settlement, make sure you have definitely already reached the VT point and that you will not incur any further excess mileage or wear and tear fees (if you are liable, then factor those additional costs in order to compare against the cost of trading it in at a lower value).
• With the HPI finance sorted, research to find a cheap way to fix the diesel cars electrical fault.
• Determine a way to pay for the work (hopefully much cheaper than £2,400). Do you have savings?

All in all, no need to look at consolidation loan for £17k.

Herzlos

If you're only £7800 away from clearing the finance on the Audi then there's a pretty good chance it's worth more than that so you'd be better off selling it to a garage (ideally an Audi one) and having them clear the finance and giving you the difference back. Used car prices are mental at the moment.

For the broken car, your best option is to try and get it repaired. Does it move or is it parked up at the first garage you visited? If it's stuck there, then you may as well just pay to get it fixed there. If it does move, then you can phone around other garages to see if they can do a better price but you may need to pay a diagnosis fee at the first place.
If you sell it as a non runner, then you'd need to expect to lower the price by much more than the £2400 quoted.

Then for the credit card debt; given that you've just borrowed £8000 for the car, I'd sit on it for a few months before trying to do anything with it. Maybe see if you can get a 0% balance transfer deal, but focus on paying it down.

MEM62

If you decided to VT the old car I see no reason to change you mind.  Go ahead and VT it and repair whatever fault you have with your new car.  That is likely to be you most prudent (and cost-effective) course of action.   

Rajix

Thanks for the advice guys, I really appreciate it. I think I'll keep up with both loans until the new year and then work on a proper solution, be it retuning the Audi on VT, selling it and paying off the finance and then maybe repairing the new car. Trouble is, the car with the electrical fault is a Jaguar and the part is main dealer only. The part alone is £1800 and then it needs installing and configuring to the car through specialist hence why its £2400. Live and learn I guess....