Help! Can't pay loan!

YB2402
YB2402 Posts: 2 Newbie
in Loans
Hi. My 18yo son stupidly took finance to buy a car. He was given credit of almost £20K! Even though he had no credit history, had only been in his job for a month, and was on 6 months probation!! Really?! He wasn't kept on at his job after the probation and can obv no longer afford the payments. We've helped him while he's looking for another job, but can't really do that any longer! He wants to hand the car back, but he's not had it for too long and would be left with a large debt to pay off! But he has no income! What can be done? Thanks.
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Comments

  • fatbelly
    fatbelly Posts: 20,487 Forumite
    Name Dropper First Anniversary First Post Cashback Cashier
    Those are pretty much his options. Voluntarily terminate or keep paying.

    The third option - stop paying and let them repossess the goods, is not a good option.

    If he takes the first option his liability is limited to 50% of the amount payable under the credit agreement.

    https://debtcamel.co.uk/vt-end-car-finance-early/

    He can then nip over to the debt-free wannabe board for advice on dealing with his debt. A lesson learned early, hopefully.
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    He needs to let them know he can't make repayments and talk to them about the options.

    He's obviously bought himself an expensive car, so selling that and making up the difference to repay the loan would be a starting point. He'll need to clear the finance to sell it though if the loan is secured on the car.

    Are you able to help him out?
  • elsien
    elsien Posts: 32,720 Forumite
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    Was he honest about his income and situation on the loan application form?
    All shall be well, and all shall be well, and all manner of things shall be well.

    Pedant alert - it's could have, not could of.
  • dealer_wins
    dealer_wins Posts: 7,334 Forumite
    Either a wind up, or OP you havnt done a good job of preparing him for adulthood!
  • fatbelly
    fatbelly Posts: 20,487 Forumite
    Name Dropper First Anniversary First Post Cashback Cashier
    When looking to sell a vehicle with outstanding finance, it’s important to remember that until the car’s finance is paid the vehicle doesn’t actually belong to you. It’s against the law to knowingly sell a vehicle with outstanding finance attached to it and as all companies register finance on HPI and Experian databases to protect buyers, it’s easy to find out if a vehicle has outstanding finance. In addition to this if a vehicle is sold on with unpaid finance attached to it, the company can track down the new owner, repossess the vehicle and the new buyer will be able to sue the person who sold it to them in addition to the seller facing the possibility of fraud charges… So it’s really not worth trying to sneak unpaid finance past somebody when selling a vehicle!

    We're assuming here that it is HP, PCP or similar.

    If the finance is not secured on the car, i.e. your son got an unsecured loan, then he is free to sell the car. But bear in mind that there may still be a mark against it on the hpi database.

    If he (or you) can find the funds to pay the settlement figure then again it can be sold once the finance is cleared.
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
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    Number 1 would be find another job chop chop that pays the same. Then he can simply carry on with the repayments, failing that you have your answers in post #2 - his credit history may be trash for 6 years if he cannot magic up £10,000 cash.

    The other issue about an 18 year old with £20,000 car would probably be left to another thread, along with 18 year old takes out finance for £20,000 without stable income.
  • parking_question_chap
    parking_question_chap Posts: 2,694 Forumite
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    What type of car is it?
  • MovingForwards
    MovingForwards Posts: 16,918 Forumite
    First Anniversary First Post Name Dropper Photogenic
    What type of finance?
    Car?
    Bank loan?
    PCP etc as the advice will differ.

    But he must get any job going in the interim or claim benefits.
    Mortgage started 2020, aiming to clear it in 2026.
  • DCFC79
    DCFC79 Posts: 40,598 Forumite
    Name Dropper First Anniversary First Post
    MovingForwards wrote: »
    What type of finance?
    Car?
    Bank loan?
    PCP etc as the advice will differ.

    But he must get any job going in the interim or claim benefits.

    Or even 2 jobs whether 2 part time or full time and an evening job.
  • foxy-stoat
    foxy-stoat Posts: 6,879 Forumite
    First Anniversary Name Dropper First Post
    OP isn't coming back, they didn't get the "send in this template letter for mis-bought finance of how to stop payments and keep the £20,000 car".
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