Car finance & CCJ

santamonica2002uk

Hi all, I currently have a car on a 4 year PCP with VWFS, my 3 cars prior to this one have also been with them and I've never missed a payment. It's due to end in March so I went to order a new car but they have declined my finance application. I've checked my credit file and there's a CCJ from 2023 on it. This is a result of a default that occurred in 2017, the company waited until a week before it was due to drop off my file before taking it to court. I've been making monthly payments towards it since then as I'm not in a position to pay it in full.

I've worked really hard to clean up my credit file after it took a battering due to a relationship breakdown but this means this one debt is going to be on my file for a total of 12 years! I'm now really worried if I can't change my car I won't get finance for the balloon payment and will just have to hand the car back. Is there anything I can do?

Isthisforreal99

How much is the balloon payment?

santamonica2002uk

The balloon payment is £13900

Isthisforreal99

So you have 5 months to try and raise the funds to pay off the balloon which I think is more realistic than taking out new finance. How does the balloon compare with the market value, i.e. is there any equity there?

In all honesty it won't be easy with a CCJ - your record is never going to be 'clean' until it drops off. Maybe some loan eligibility checkers to see if anyone will lend?

Goudy

Talking to your existing finance provider about refinancing the balloon might be an option.

It's not unusual for PCP customers to refinance the balloon with their original finance company if they really want to keep the car. You have a good track record with them which might help regarding the CCJ but as it will be a new finance contract, they will obviously take that CCJ into consideration when making a decision.

This way you get to at least have a chance of keeping the current car.

I know it's not overly helpful but if you can't refinance the balloon, at least you have the option of handing the car back and not having nearly £14,000 plus interest hanging over your head for the next few years . A lot of people in debt just don't have that option of walking away like that.

Handing it back might be a wiser option, then you can use that money to pay off that bad debt faster. In this situation, I wouldn't be looking at a new car either. I'd be looking at a bit of bangernomics for a few years.

Herzlos

If you can't refinance the balloon, then the more prudent option would be to try and build up some savings in the next 5 months, return that car and try to buy something cheaper with the savings or some finance if you can manage it. You may find it a lot easier to finance £2k than £14k, though the rates are going to suck.

Penguins4ever36

https://forums.moneysavingexpert.com/discussion/comment/82186649#Comment_82186649

I work in car finance and this is a very sensible answer. Further finance will be very hard with a CCJ and handing car back and buying a cheap car outright until credit file is clear is the best option.

Mildly_Miffed

Given that you still owe money from nearly a decade ago, it's not a great surprise that you might not be top of their list of people to lend to.

You do not NEED a brand new car. You don't even NEED a fourteen grand one four year old one. There are lots of PERFECTLY good two grand cars around.