HP Car Loan Advice Credit Rating

Jackallo61

Sorry. I am struggling to comment on my previous thread and decided to create a new one with the needed extra information:

Hello all, long time observer first time poster. 

In April 2025 I will be one year into a five year Hire Purchase car loan. I will be in negative equity of £3000. My grandparent has gifted me £4000 to get a new car and new car only as they are concerned about the upkeep costs of an older car when having a mortgage. I bought the one I have now in a bit of an emergency due to my 2011 Citroen's engine failing and was therefore not in as strong a financial position as I am in now. 

I am aware that I can go to a car dealership and they will pay off my car loan if I trade my car in with them, pay them the negative equity to them and I would still have a £1000 for a deposit on a NEW HP contract. 

However, I am concerned about my credit rating. My partner and I are looking to buy a house in August 2026. 

 Will it negatively affect my credit rating by doing this?

Many thanks. 

Nasqueron

Any sort of finance will involve a credit check and affect affordability on a mortgage

A credit check now isn't likely to be a major issue for a house purchase in August next year, just depends what you have for deposit, income to borrowing etc