HP Debt - VT or Surrender?

Herzlos

babayaga96 said:

@Herzlos Unfortunately they don't. 

Ah, you're pretty screwed whatever happens then. 

What I wouldn't normally suggest since it'd wreck your credit, but may at least help a bit in your case is that if you can get away with not paying anything non-priority (rent, council tax, etc) for a couple of months, will that allow you to buy a cheap car outright? 

Hopefully doing so will then reduce your insurance payment (check quotes before buying!) and tax, and free up most of the repayments your making on the current car which you can VT. Though I don't think you can VT when in arrears so you'd need to keep paying that too. 

Another option that'd usually be a terrible idea is to see if any reputable car dealership will take the current car in as a part exchange against a new much cheaper car, and roll the negative equity into that deal. It won't reduce the total debt since the shortfall is unavoidable, but it may reduce the monthly payment somewhat. 

Goudy

I think Herzlos is right
There's no clean way out of this, only a painful one.

Would the finance company let you surrender the car?
They'd then auction it and hopefully refinance the difference.

It might be in their interest as you've no way of continuing to make the payments.
In their eyes they'd get back the largest slice possible of the capital they lent you, still make some interest on the refinance and you would have reduced a debt by more than half if not more.

With any luck, they might give you a payment holiday while this happens and save you more in debt recovery costs, which will no doubt come when they chase you for it.

babayaga96

My credit is pretty damned. Can't get any credit or loan anywhere. I am getting onto a DMP soon for my credit cards and other unsecured debts. I messed up my finances and it was too late by the time I woke up. So my plan is to surrender the car as you are suggesting I will not be able to VT path. Let them auction it. Make the difference amount as unsecured debt and get that added to my DMP. After a month or two I can buy a 1K car outright by saving some money.