balloon payment

Fafalo11

I have a balloon payment of £6,000.00 coming up in September.

I would like to keep my car but cannot afford to pay for it outright.

however, 2 years ago I went on an IVA but excluded my PCP.

I have never defaulted on my payments (5 year agreement).

Can I get a friend to take up the balloon payment on finance since I cannot get credit myself.

If so, how do you go about it.

Thank you

Isthisforreal99

Only option, I believe, would be for said friend to take out a personal loan to pay the balloon payment.

Would be mad to, mind you.

Nasqueron

https://forums.moneysavingexpert.com/discussion/6668315/balloon-payment

What friend would ask a friend to take on debt for them, knowing they had previously had financial problems?

Ask the dealer about refinancing or hand back the car and walk away, don't try and burden a friend with debt for you and next time you take out PCP ensure you have plans to pay off the balloon before you proceed.

soolin

https://forums.moneysavingexpert.com/discussion/6668315/balloon-payment

Do you have such a 'friend' in mind and are they aware that you have had an issue with credit in the past? They would need to be aware that the loan might well actually become a gift if you find yourself in the unfortunate situation of not being able to pay them back.

Gonk1967

My father was in the same situation, he spoke to the dealer and got a refinancing deal from them.

Fafalo11

Sorry, I forgot to mention the car will be his and not mine. It's just that it is a bargain knowing that the balloon payment is nearly £2000 lower than the value of the car. Shame to let it go

fatbelly

You say 'my pcp' and 'the car will be his'. Pcp is a hire purchase arrangement where the ownership transfers to you on the final payment. It is just that the final payment is a large one.

If you are saying that you will transfer the asset to him, then remember that you are insolvent and your Insolvency Practitioner may take a view about this. Ideally this would all have been accounted for in the initial Agreement. I assume you are two years into a 5-year IVA. Check your paperwork to see if there is any mention of it.

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/81998862#Comment_81998862

While it is confusing who has the car and the finance, if the car is worth £2k more than the balloon payment, rather than handing the car back to the original supplying dealer, you can sell the car to WBAC or Motorway or whoever will give you the £2k more than the balloon payment - the purchaser will settle the finance (balloon payment) and then credit you the balance £2k. I am not knowledgeable how having the £2k will impact your financial settlement IVA or similar arrangement.

Ectophile

It's totally legitimate to sell the car to someone else, and that someone else pays off the finance and keeps the car. Usually, the car would be sold to a motor dealer, but there's no reason a friend can't buy it from you.

Just make sure that the friend does pay off the finance when you sign over the V5. Otherwise, you and your friend could be in a world of grief with the finance company.

MEM62

Can I get a friend to take up the balloon payment on finance since I cannot get credit myself.

Maybe, but you would not be much of a friend to them by putting them in that position.

sheramber

https://forums.moneysavingexpert.com/discussion/comment/81998862#Comment_81998862

What do you get out of the deal?