Car Finance vs cost of car

motorguy

benn1 said:

motorguy said:

benn1 said:

facade said:

Request a settlement figure.

See what WBAC or similar will buy it off you for.

If the figures match or are close, sell to WBAC, and they will settle the finance. You pay any shortfall as cash to the finance people- or get any surplus as cash.

This leaves you with nothing though, and you will have to finance a cheaper car with no deposit.

You can try and sell it privately for more money, but this may not be a smooth process.

You could even re-finance the settlement figure BUT if you extend the length of your finance you end up with a car that is well out of warranty, and potentially liable for huge bills, that you have to pay while you are still paying back the loan.

The alternative, if the finance is a HP agreement is Voluntary Termination (VT). Once you have paid 50% of the sum borrowed  plus interest you just hand the car back to the finance company and walk away. (This will affect your chances of buying another car on HP straight away, but if you are buying a cheap car for cash it won't matter)

If you had a 4 year HP agreement, you will be close to that point. If it is PCP forget it, as there is a huge balloon payment and you wont reach the 50% point until virtually the end of the term.

I believe its a PCP agreement,
Had a look at WBAC and they are quoting about £13500 compared to a settlement figure of about 16k

Try motorway - they seem to offer a bit more.

Whats your plans for driving "something a bit cheaper"?

If you're planning to use finance (or even a personal loan) the monthlies may not be much less, if any less.

was thinking about getting rid of the expensive car and getting soemthing cheaper but at moment have the issue with more owed than cars worth.

How would you fund the cheaper car?

benn1

Phoenix72 said:

How much per month are we talking here?

current paying £320 per month

benn1

motorguy said:

benn1 said:

motorguy said:

benn1 said:

facade said:

Request a settlement figure.

See what WBAC or similar will buy it off you for.

If the figures match or are close, sell to WBAC, and they will settle the finance. You pay any shortfall as cash to the finance people- or get any surplus as cash.

This leaves you with nothing though, and you will have to finance a cheaper car with no deposit.

You can try and sell it privately for more money, but this may not be a smooth process.

You could even re-finance the settlement figure BUT if you extend the length of your finance you end up with a car that is well out of warranty, and potentially liable for huge bills, that you have to pay while you are still paying back the loan.

The alternative, if the finance is a HP agreement is Voluntary Termination (VT). Once you have paid 50% of the sum borrowed  plus interest you just hand the car back to the finance company and walk away. (This will affect your chances of buying another car on HP straight away, but if you are buying a cheap car for cash it won't matter)

If you had a 4 year HP agreement, you will be close to that point. If it is PCP forget it, as there is a huge balloon payment and you wont reach the 50% point until virtually the end of the term.

I believe its a PCP agreement,
Had a look at WBAC and they are quoting about £13500 compared to a settlement figure of about 16k

Try motorway - they seem to offer a bit more.

Whats your plans for driving "something a bit cheaper"?

If you're planning to use finance (or even a personal loan) the monthlies may not be much less, if any less.

was thinking about getting rid of the expensive car and getting soemthing cheaper but at moment have the issue with more owed than cars worth.

How would you fund the cheaper car?

probably finance but for a less expensive car therefore hopefully less per month

Phoenix72

benn1 said:

motorguy said:

benn1 said:

motorguy said:

benn1 said:

facade said:

Request a settlement figure.

See what WBAC or similar will buy it off you for.

If the figures match or are close, sell to WBAC, and they will settle the finance. You pay any shortfall as cash to the finance people- or get any surplus as cash.

This leaves you with nothing though, and you will have to finance a cheaper car with no deposit.

You can try and sell it privately for more money, but this may not be a smooth process.

You could even re-finance the settlement figure BUT if you extend the length of your finance you end up with a car that is well out of warranty, and potentially liable for huge bills, that you have to pay while you are still paying back the loan.

The alternative, if the finance is a HP agreement is Voluntary Termination (VT). Once you have paid 50% of the sum borrowed  plus interest you just hand the car back to the finance company and walk away. (This will affect your chances of buying another car on HP straight away, but if you are buying a cheap car for cash it won't matter)

If you had a 4 year HP agreement, you will be close to that point. If it is PCP forget it, as there is a huge balloon payment and you wont reach the 50% point until virtually the end of the term.

I believe its a PCP agreement,
Had a look at WBAC and they are quoting about £13500 compared to a settlement figure of about 16k

Try motorway - they seem to offer a bit more.

Whats your plans for driving "something a bit cheaper"?

If you're planning to use finance (or even a personal loan) the monthlies may not be much less, if any less.

was thinking about getting rid of the expensive car and getting soemthing cheaper but at moment have the issue with more owed than cars worth.

How would you fund the cheaper car?

probably finance but for a less expensive car therefore hopefully less per month

But the problem you have even if you traded it in and the dealer agreed to clear the finance then that £3 shortfall is going to be added to any new car finance you take out so you are unlikely to be much better off.

Goudy

That £3k gap isn't going to disappear until you get very close to the point when the GFV/Balloon payment is due.

Your monthly payments are linear but cars don't depreciate like that.
They lose more early on and then less and less as the years roll by.

It's only around the point the GFV is due do they meet.

If at the end of the contract they don't meet and your car is worth less than the GFV, you can just hand it back.
If it's worth more then you can use that towards a new car or pay it off and keep the car.

If the interest rate on the loan is high, it might pay you to find the £3k, sell and pay off the loan if you have that in savings earning less interest.

Otherwise you'll end up refinancing this £3k, so your monthly payments probably won't reduce, you'll have an older, lesser value car and you'll pay interest on a loan to pay off another loan you have already paid interest on, which in anyone's book works out expensive.

Have to looked at reducing any other outgoings?
At least until this £3k gap reduces enough.