Bought a car on 4 year hire purchase agreement, 4 months ago. Best way to get rid of it?

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Posted 30th Dec 2019
It's a big estate car, had low mileage, 2016 model. Had lost a lot of its value already and was a good deal for us at the time, very practical, especially for weekends.

Life has changed massively since then. Moved home twice, job twice and the main reason for wanting an estate car has also gone. All going well would be leaving the country for work within 2 years too which means car need to go. Sooner the better I'm thinking though.

The car really doesn't make sense. I do like it a lot, but a tiny city car would be more appropriate for the way we live right now.

Read some guides, they're all saying you're screwed basically. Anyone good at minimising the losses and got any tips? I'd love to roll it into a dealership and roll out with a smaller, much cheaper car per month. That would be easier, though likely to be one of the worst options financially I'm thinking..
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It will more than likely end up costing much more in the long run to get rid of it and have a smaller car.
It would make more sense to keep the bigger more comfy car and save money, changing car this early into an agreement is bonkers unless you got a good deal on it and can get a very low apr loan to pay it off
Edited by: "Mark_Hickman" 30th Dec 2019
Voluntary termination Section 99 Consumer Credit Act 1974 = pay 50% of loan, hand back and walk away, with a few caveats.
28 Comments
Get loan to clear it then sell it. Only option
Tell the hp firm and see if they'll reposess
esar30/12/2019 10:24

Tell the hp firm and see if they'll reposess



Surefire way to kill your credit no?
Was it bought via a dealer? If so could you go back to them and see what they can offer?

You could also try asking the HP company what the buy out clause is - although so early in to the agreement I expect it to be huge.
I believe if you pay half the initial HP debit, then you have a right to return, although, I think you would also have to pay for any damage as well.

So, if that is the case, I would check with the finance company how much it is likely to cost you to buy yourself out, and also find out what you could realistically sell the car for (not forgetting to take into account that if you trade it in for a new car you won't get as good a deal on the new one), and go for whichever option leaves you the least out of pocket.
Edited by: "melted" 30th Dec 2019
Ask the finance company what are the options. Also check independently what are the other options available as the finance company will be biased.
Voluntary termination Section 99 Consumer Credit Act 1974 = pay 50% of loan, hand back and walk away, with a few caveats.
Private loan, pay car off, sell privately then pay off loan...?
Go speak with a dealer & see what they offer. If they accept your estate car as trade-in then they'll effectively be paying off your loan on your behalf & whatever profit is left on the price they give you will go towards the cost of your new car. How much they offer you will depend on how much they can sell on the estate car for and how desperate they are to sell you a new car. You can then decide if you want to trade in the estate car or take out a loan to pay it off.
It's not a model that's 'notorious' for catching fire then?
It will more than likely end up costing much more in the long run to get rid of it and have a smaller car.
It would make more sense to keep the bigger more comfy car and save money, changing car this early into an agreement is bonkers unless you got a good deal on it and can get a very low apr loan to pay it off
Edited by: "Mark_Hickman" 30th Dec 2019
Mark_Hickman30/12/2019 13:09

It will more than likely end up costing much more in the long run to get …It will more than likely end up costing much more in the long run to get rid of it and have a smaller car.It would make more sense to keep the bigger more comfy car and save money, changing car this early into an agreement is bonkers unless you got a good deal on it and can get a very low apr loan to pay it off


That's what I'd do. The extra costs from running a car bigger than you need will almost certainly be less than the amount you'd lose from trading it in for something smaller and paying off the finance.

If you don't mind the risk of buying and selling privately it would be financially worthwhile though,but only IF you know enough about cars to spot a lemon before you hand over the cash.
Hmm yes I guess it really boils down to the figures.

Don't have the finance agreement to hand, but car costs £350 a month for another 43 months roughly. Will own the car after that.

Only put down £1k deposit. Think car selling price was 13,500 and total cost was going to be around 17k by end of loan.

Might be some errors in there, but that's very roughly it.

I've seen small cars for around 140 a month that woulds do us for the next 1 to 2 years at which point we won't need a car at all.

Not really the best at working out how exactly I'm supposed to work out what's the best situation. Saving cash is now the priority, hence we've dropped the weekends away, cycling and all that. Just gonna hunker down for a bit. Live off body fat and water
Need to find out what the final figure is to clear it and then decide what your options are. Either part ex if it covers the amount, loan to cover it or live with it till you know what your doing job wise
Ffs just ring then up and explain your situation
tambi30/12/2019 09:54

Get loan to clear it then sell it. Only option


Wrong.
What about getting creative, and using something like hiya? Just came across them, seems they fit a box to your car and people can hire your car out and unlock it with the app. 5 or 6 days hired out a week would cover most of the cost.

Looks like high risk/reward option and I don't know anyone who's done this. Don't even know who these guys are.
Edited by: "Vanderlust" 30th Dec 2019
Is there some type of insurance covering the loan?

It may be worth analysing the terms and seeing what get out clauses may be available or if they can be gamed.
How much do you owe on the car and what’s it’s value?
homebanjo30/12/2019 16:31

Is there some type of insurance covering the loan? It may be worth …Is there some type of insurance covering the loan? It may be worth analysing the terms and seeing what get out clauses may be available or if they can be gamed.



Yeah need to go through the contract in depth, you're right, might be something in there..just need a new copy of it. Lost it when moving recently!
Edited by: "Vanderlust" 30th Dec 2019
toonsquirel30/12/2019 16:40

How much do you owe on the car and what’s it’s value?



Value seems to be around 13k to 14k. Must owe around 15k, but waiting on settlement figure from finance co to know for sure.
Vanderlust30/12/2019 16:46

Value seems to be around 13k to 14k. Must owe around 15k, but waiting on …Value seems to be around 13k to 14k. Must owe around 15k, but waiting on settlement figure from finance co to know for sure.


Then you best options will be sell and pay the difference yourself or option most people end up doing is get new car and finance company will add the extra in there. You could go and buy a let’s say £5000 little car and they’ll make the finance £7000. No matter what your paying that £2k shortfall wither it’s over next few years on the mondeo or added onto something cheaper.
Unfortunately you are not going to get out of this without losing money if you try to change now. I have been in this situation when a job change required a different vehicle type about 8 months in to a PCP, like HP which being a Controlled Credit agreement only has the get out of jail VT card after 50% of the total due is repaid. I bought another new car on PCP and the dealer rolled the debt of the car into the new one which felt less painful as it was just an addition to the monthly payments. In your case, if you are definetly going to be around for the next 2 years I'd keep the car going and revisit the situation when you know if you are going abroard. If you are in the 2 year bracket with such a small deposit you'll be close to the magic 50% so VT is then possible which does not affect your credit rating by the way. There is another out called Voluntary Surrender where u are saying repo my car because I have no options, but that will kill your credit rating.
tambi03/01/2020 09:32

I did it no issues


You said it was only option though hence being told that was wrong.

There are other options and ways around things although some are better than others.
tambi03/01/2020 09:32

I did it no issues


It’s not the only option.

so your wrong.
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