Help sorting my car finance mistake

Emily11223344

Hello

I've made a very bad financial decision and I don't think there is a way to fix it but thought I'd see if anyone had any ideas!

I used to own a small car outright, then we got a large breed puppy, so I went to a dealer to try and part exchange for a car with a larger boot. I got talked into a PCP contract for £200 per month. I was really stupid, didn't do my research, and basically just agreed as I had a lot on- my own fault. 

It's now 10 months down the line, every month I'm dreading this 200 coming out my account on the 18th, my large breed puppy is enormous and hardly fits in the boot (the whole reason I got the car) and we've just taken on a massive mortgage (sale went on for 10 months with people dropping out so obviously interest much higher than we budgeted from our mortgage in principle). I'm really struggling for money, I have the usual second job to help pay for the large mortage, and I'm just so so disappointed with myself for the car decision. 

I got nearly 6k in part exchange for my old car, and I just wish I could go back in time and exchange for an old car. I now work from home and don't even drive the car, its got 15k miles on a year based on my old job and I never go out! 

I've spoken to the finance company, and they say I am in negative equity, the car is worth less than the balancing figure, so its not possible to part exchange for an older cheaper car, and if I want to give my car back I have to pay a massive settlement fee (obviously I was aware of this but didn't really think about it). 

I'm stuck aren't I? Is there anything I can do? I just want the car gone, and a cheap old car to take the dog to places and back a couple times a week, I feel I've made such a massive mistake. I've thought about not paying it and seeing if they will reposs but I imagine they'll chase me for the settlement figure.

DE_612183

If you got £6k in px - you shouldn't really be in negative equity - can you publish the make and model, year vand price you paid etc?

I can see that you may not get your £6k back in full - but you should not be to much in.

I part-ex'd my old car about 12 months ago for a brand new audi - I had about £7k part-ex - and if I sold today I'd still walk away with about £3k cash ( I'm on pcp as well ).

Either the sale figure you've been given is wrong or you were ripped off 10 months ago...

prettyandfluffy

Can you give the relevant figures - car cost, over what period etc - which might help see if there are options open to you?

Goudy

I would say that in all likelihood yes you are stuck, but you need to get some figures first to see where you actually are.

When you pay for your car in monthly payments, they are linear.
You pay a set amount each month until the end of the contract.
Within those monthly payments is all the interest as well.

Cars do not depreciate that way.
They generally lose a large slice soon after buying, then less and less as the years go buy.
Only after you have paid all the monthly payments does you car start being worth around the final balloon payment.

It's only around this time that what it's worth and what you owe starts to met.

But writing that, you might be able come out ahead earlier.
Your set monthly payments contain all the interest over the agreement.
If you settle (or someone settles for you) the finance early, you don't pay all of that interest. (only a max of 56 days interest).

So you first point of call is to get a settlement figure from the finance company.
The finance company will work out what you have to pay now to finish the finance and they will work out the interest rebate for you.

Next you need to know the cars current value.
There are plenty of online car buying services that will give you a good idea of what it's worth.

With these figures you can work out if you can get shot of it now without carrying over a debt.
All these buying services will usually settle the finance for you if it's worth more than what you owe, they pay you the remaining amount.

You will undoubtedly have lost any value from you trade in though but at least you haven't the weight of the PCP deal hanging around your neck. 

Emily11223344

DE_612183 said:

If you got £6k in px - you shouldn't really be in negative equity - can you publish the make and model, year vand price you paid etc?

I can see that you may not get your £6k back in full - but you should not be to much in.

I part-ex'd my old car about 12 months ago for a brand new audi - I had about £7k part-ex - and if I sold today I'd still walk away with about £3k cash ( I'm on pcp as well ).

Either the sale figure you've been given is wrong or you were ripped off 10 months ago...

Thank you for this. The car was £17221, and the car is a VW TRock 68 plate. I don't understand how it can now only be worth 12k, which is the quotes I am getting but who knows! I know nothing about cars- my mistake is thinking I could just sort it on my own on the Internet (car is from cinch)

 I know the mileage is really high, so maybe that's why but the car finance company will not allow me to change the mileage now, even though I don't leave the house with my new job. 
I thought about if it was possible to change the finance company and set up with a lower mileage but I'm assuming not!

DE_612183

Well on auto-trader there are 336 of those - and only 3 are under £13k.

I think the problem you are having is you are looking to "hand the car back" as part of the PCP - if you sell privately you should get more.

If the your part-ex was £7k and you bought it for £17k - there should only be about £10k less any payments you've made off capital. If you are paying £200 a month I'd suggest your paying about £100 off the capital as well - so the settlement figure should be somewhere like £9k - you sell for maybe £13,500 and should should still have £4k+ to come back to you.

Have you asked for a settlement figure?

Have you gone back to the original garage and asked if they would buy back? ( some franchise garages do )

Emily11223344

DE_612183 said:

Well on auto-trader there are 336 of those - and only 3 are under £13k.

I think the problem you are having is you are looking to "hand the car back" as part of the PCP - if you sell privately you should get more.

If the your part-ex was £7k and you bought it for £17k - there should only be about £10k less any payments you've made off capital. If you are paying £200 a month I'd suggest your paying about £100 off the capital as well - so the settlement figure should be somewhere like £9k - you sell for maybe £13,500 and should should still have £4k+ to come back to you.

Have you asked for a settlement figure?

Have you gone back to the original garage and asked if they would buy back? ( some franchise garages do )

Thank you- I've just been looking at auto trader but it seems very complicated! I wasn't actually aware I was allowed to do this as I don't own it (PCP) but it seems I can.


The settlement figure is 12.5k. 

So it seems my best option is to sell privately/to cinch (original seller) or via auto trader, pay off the finance, and then use the hopefully 1-1.5k left over as a deposit for an older, cheaper car. 

Thank you all.

DE_612183

Emily11223344 said:

DE_612183 said:

Well on auto-trader there are 336 of those - and only 3 are under £13k.

I think the problem you are having is you are looking to "hand the car back" as part of the PCP - if you sell privately you should get more.

If the your part-ex was £7k and you bought it for £17k - there should only be about £10k less any payments you've made off capital. If you are paying £200 a month I'd suggest your paying about £100 off the capital as well - so the settlement figure should be somewhere like £9k - you sell for maybe £13,500 and should should still have £4k+ to come back to you.

Have you asked for a settlement figure?

Have you gone back to the original garage and asked if they would buy back? ( some franchise garages do )

Thank you- I've just been looking at auto trader but it seems very complicated! I wasn't actually aware I was allowed to do this as I don't own it (PCP) but it seems I can.


The settlement figure is 12.5k. 

So it seems my best option is to sell privately/to cinch (original seller) or via auto trader, pay off the finance, and then use the hopefully 1-1.5k left over as a deposit for an older, cheaper car. 

Thank you all.

Yes, that looks about right - with a car of 2018 you could try your local VW franchise garage - they may give you a nice easy sale and pay off the finance for you at the same time.

NickyDe

DE_612183 said:

Emily11223344 said:

DE_612183 said:

Well on auto-trader there are 336 of those - and only 3 are under £13k.

I think the problem you are having is you are looking to "hand the car back" as part of the PCP - if you sell privately you should get more.

If the your part-ex was £7k and you bought it for £17k - there should only be about £10k less any payments you've made off capital. If you are paying £200 a month I'd suggest your paying about £100 off the capital as well - so the settlement figure should be somewhere like £9k - you sell for maybe £13,500 and should should still have £4k+ to come back to you.

Have you asked for a settlement figure?

Have you gone back to the original garage and asked if they would buy back? ( some franchise garages do )

Thank you- I've just been looking at auto trader but it seems very complicated! I wasn't actually aware I was allowed to do this as I don't own it (PCP) but it seems I can.


The settlement figure is 12.5k. 

So it seems my best option is to sell privately/to cinch (original seller) or via auto trader, pay off the finance, and then use the hopefully 1-1.5k left over as a deposit for an older, cheaper car. 

Thank you all.

Yes, that looks about right - with a car of 2018 you could try your local VW franchise garage - they may give you a nice easy sale and pay off the finance for you at the same time.

I have done exactly this with a VW vehicle before in an almost identical situation. Was no way near the mid term for voluntary termination and also couldn't afford the settlement figure.

A VW franchise brought the vehicle off me directly and i just about broke even however at least I didn't have the massive finance bill each month. 

born_again

DE_612183 said:

Well on auto-trader there are 336 of those - and only 3 are under £13k.

I think the problem you are having is you are looking to "hand the car back" as part of the PCP - if you sell privately you should get more.

If the your part-ex was £7k and you bought it for £17k - there should only be about £10k less any payments you've made off capital. If you are paying £200 a month I'd suggest your paying about £100 off the capital as well - so the settlement figure should be somewhere like £9k - you sell for maybe £13,500 and should should still have £4k+ to come back to you.

Have you asked for a settlement figure?

Have you gone back to the original garage and asked if they would buy back? ( some franchise garages do )

OP bought a 3 year old car given a 68 plate is sept 2018/19 Add 10 months on & you get around 3 years. 

This is the real danger of cars of 2nd hand cars on PCP.

Grumpy_chap

The OP has the settlement figure.  £12.5k
The OP can obtain quotes from local VW dealer, WBAC, Motorway, Arnold Clark etc.  They will be quick and easy to obtain and give an indication of the car value and whether more or less than the settlement figure.
If the route to sell is viable, then try to get the best possible sell price - local independent "we buy cars for cash" may better the larger national companies.  You won't know until you ask.