hp on car / returning to finance co.

argamemnon

Hi there, just a quicky i think..

My wife and i have a car on hp, unfortunatly our financial situaton has changed somewhat and we can now no longer afford the repayments on the car....

we have had the car from new (jan 04) and owe less than what the car is worth..

would the finance company be able to take the car back if we told them of our situation because we don't want to fall behind on the payments so would rather nip this in the bud asap...

many thanks in advance....

AdrianHi

Ask the finance company for a settlement figure. The sad thing is these finance deals are often front loaded with interest payments, so if you are say 3/4 of the way through the period you may well still have more than 1/4 of the capital to pay back. So long as you are not in negative equity, selling the car, getting the buyer to pay the finance company what they are owed and the balance to you is likely the best way to sort this.
Balanced lease purchase is a safer method of finance as equal amounts of capital are paid back every month from month one, which only leaves you with negative equity to worry about.
You need to check the terms and conditions of your HP agreement and get a settlement figure from them to start with.