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  • FIRST POST
    • SThom87
    • By SThom87 16th Nov 19, 11:16 AM
    • 2Posts
    • 0Thanks
    SThom87
    Car Finance outweighs value of Car
    • #1
    • 16th Nov 19, 11:16 AM
    Car Finance outweighs value of Car 16th Nov 19 at 11:16 AM
    Morning,

    I have 8400 left on my car finance agreement and the car is currently now valued at a lot less.

    My contract says if I pay half the value of the overall contract (overall contract was 10,200) then I can give the car back to the finance company. Has anyone ever done this?

    I still have around 49 payments to make, and have thought about paying this off with a credit card if possible. Looking at all options at the minute and any advice would be great.

    Thanks
Page 1
    • jonesMUFCforever
    • By jonesMUFCforever 16th Nov 19, 11:18 AM
    • 26,221 Posts
    • 13,389 Thanks
    jonesMUFCforever
    • #2
    • 16th Nov 19, 11:18 AM
    • #2
    • 16th Nov 19, 11:18 AM
    Did the overall contract figure include interest?
    You need to factor that in as well.
    What goes around - comes around
    give lots and you will always receive lots
    • Nebulous2
    • By Nebulous2 16th Nov 19, 11:46 AM
    • 2,535 Posts
    • 1,683 Thanks
    Nebulous2
    • #3
    • 16th Nov 19, 11:46 AM
    • #3
    • 16th Nov 19, 11:46 AM
    Yes it's a well-trodden route that people go for a voluntary termination and hand back the car. You need to be clear what you needed to pay in total and how much you need to contribute to reach the 50% mark.It's common for cars to spend a lot of the payment period in negative equity. Here's some basic information on VT.
    • tempus_fugit
    • By tempus_fugit 16th Nov 19, 11:49 AM
    • 801 Posts
    • 758 Thanks
    tempus_fugit
    • #4
    • 16th Nov 19, 11:49 AM
    • #4
    • 16th Nov 19, 11:49 AM
    Yes, have done this before. You have to check the original documentation to check the original contract value, which as jones MUFC says will likely include interest and possibly other things too. If you have paid at least half of that contract total then you can return the vehicle with nothing more to pay. We did this with a Rover years agao as their market value had tanked due to them going bust. The car was collected by the finance company, it was all very straightforward.
    Retired at age 56 after having "light bulb moment" due to reading MSE and its forums. Have been converted to the "budget to zero" concept and use YNAB for all monthly budgeting and long term goals.

    Pedant point: There is no such word or construction as "I's", the word to use is "my".
    • supersaver1000
    • By supersaver1000 16th Nov 19, 1:04 PM
    • 2,172 Posts
    • 13,513 Thanks
    supersaver1000
    • #5
    • 16th Nov 19, 1:04 PM
    • #5
    • 16th Nov 19, 1:04 PM
    Yes we did a VT. We were going to a part-exchange, but the value they were giving us would have left us with (from memory) about 1,500 deficit - which we would have had to add to the new car loan. I realised that we were something like 300 away from being able to return the old car and walk away. We phoned up the finance company for an accurate figure, paid the difference and were able to buy the new car from scratch, saving us the 1,200 difference.

    Out of Debt April 2019
    - last few student loan payments by April 2020
    Trying to get it together - Homeowner wannabe

    Flylady & Grocery Challenge Lurker - millionaire/fashionista wannabe
    • SThom87
    • By SThom87 16th Nov 19, 1:27 PM
    • 2 Posts
    • 0 Thanks
    SThom87
    • #6
    • 16th Nov 19, 1:27 PM
    • #6
    • 16th Nov 19, 1:27 PM
    Thanks for your help, much appreciated. The full amount includes all the interest and insurances too. My only concern is the how they see the condition of the vehicle, a dent and scratch put in by the RAC will work against me I can imagine.
    • Terence Burrows
    • By Terence Burrows 19th Nov 19, 3:52 PM
    • 20 Posts
    • 1 Thanks
    Terence Burrows
    • #7
    • 19th Nov 19, 3:52 PM
    • #7
    • 19th Nov 19, 3:52 PM
    Morning,

    I have 8400 left on my car finance agreement and the car is currently now valued at a lot less.

    My contract says if I pay half the value of the overall contract (overall contract was 10,200) then I can give the car back to the finance company. Has anyone ever done this?

    I still have around 49 payments to make, and have thought about paying this off with a credit card if possible. Looking at all options at the minute and any advice would be great.

    Thanks
    Originally posted by SThom87
    Is this on HP Or PCP?
    • molerat
    • By molerat 19th Nov 19, 4:07 PM
    • 21,609 Posts
    • 15,844 Thanks
    molerat
    • #8
    • 19th Nov 19, 4:07 PM
    • #8
    • 19th Nov 19, 4:07 PM
    Is this on HP Or PCP?
    Originally posted by Terence Burrows
    And the difference is ?
    https://www.helpforheroes.org.uk/give-support/donate-now/
    • chelseablue
    • By chelseablue 19th Nov 19, 4:35 PM
    • 2,962 Posts
    • 3,486 Thanks
    chelseablue
    • #9
    • 19th Nov 19, 4:35 PM
    • #9
    • 19th Nov 19, 4:35 PM
    Curious to know, does voluntary terminating do anything negative to your credit report? Or does the account just show as settled and closed?
    • k3lvc
    • By k3lvc 19th Nov 19, 4:43 PM
    • 2,796 Posts
    • 4,573 Thanks
    k3lvc
    I still have around 49 payments to make, and have thought about paying this off with a credit card if possible.
    Originally posted by SThom87

    49 payments left to make and your almost half way through - either you made a significant deposit/PX or your figures are dodgy


    And unllikely you can pay off directly via credit card - it'll need to be 'cash' in some format (bank transfer, debit card etc albeit potentially funded by another loan)
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