Car finance help required

livmum_2

I've recently lost my job and have split with partner leaving me with my 2 year old daughter and claiming benefits. I don't see how I'm going to be able to keep up car finance on car (from dealer) and wonder what the consequences will be if I tell dealer I can no longer pay? Will this affect credit rating?

Stesnees

Hi there, my understanding of this situation is that so long as you have paid off half of the aggreement then you can hand back the car no questions asked. The finance company MAY put a voluntary termination notice on your credit file which might go against you in the future. A friend of mine did this a couple of years ago and didn't have any problems at all. If you have paid well over half of the aggreement and have a lot of equity in the car then a better option might be to call up the finance company and ask about reduced payments, depending on your circumstances of course. Hope this helps.

CLAPTON

what sort of finance do you have?
If its HP then you can voluntary terminate the loan after half the agreement has been paid, if its personal finance then that doen't apply.

livmum_2

Its HP from Arnold Clark and I've only paid a 12 months of 56 so far.

makingendsmeet_2

If you have only paid 12 of 56 months you won't be able to just hand the car back....

Don't worry about the dealer they won't be bothered as its not their money. They will have been paid for the car the day you drove it away.


Best advice I can offer is find the finance paperwork that you signed and phone the finance company up who lent you the money.. Tell them your situation and make an offer to to pay them a lower monthly payment until you get back on your feet.. Do not let them bully you into making a payment you can't afford..

Finally DON'T take out any further credit to get you out of a hole.. It will keep them off you back in the short term but in the long term you will make a bad situation worse...

Afraid whatever you do will effect your credit rating.. Shouldn't worry too much just try and get back on your feet and worry about your credit rating later.

tupperware

makingendsmeet wrote: »

If you have only paid 12 of 56 months you won't be able to just hand the car back....

Don't worry about the dealer they won't be bothered as its not their money. They will have been paid for the car the day you drove it away.


Best advice I can offer is find the finance paperwork that you signed and phone the finance company up who lent you the money.. Tell them your situation and make an offer to to pay them a lower monthly payment until you get back on your feet.. Do not let them bully you into making a payment you can't afford..

Finally DON'T take out any further credit to get you out of a hole.. It will keep them off you back in the short term but in the long term you will make a bad situation worse...

Afraid whatever you do will effect your credit rating.. Shouldn't worry too much just try and get back on your feet and worry about your credit rating later.

You have to keep in mind though that because it is a Hire Purchase on a vehicle the finance company may be reluctant to allow an extended period of reduced payments. Realistically if the OP is not able to return to the normal payments within say 3-6 months then they may have to look at the possibility of a refinance deal in order to avoid repossession.

But yeah, first and foremost, find out who the finance is through and call them and see what they can do to help. The dealer will have nothing more to do with it now.