downgrading +motor finance

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maxol

Registered User
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Hi all,

i have a car loan with 4 years left on it. roughly 17k o/s.

it is an 06 model and the repayments are currently 420 pm.

i would love to trade down, buy an older/smaller car.

how could i go about this? unfort i am not in a position to pay a lump sum of 17k.

i am guessing that the trae in value will be substantially lower than 17k so am i stuck?!
 
nobody?

i have 5k to buy a car outright but any ideas as to my options or how best to approach this transaction given that i need to offload the 06 car?
 
maxol said:
i am guessing that the trade in value will be substantially lower than 17k so am i stuck?!
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Unless you have cash to pay off the remainder of the loan then yes. It's all very well having €5k to buy an older car but you still have the small matter of rhe €17k car loan to worry about.

Are you sure it's a loan and not hire purchase?
 
Can you sell the car privately? It will be very hard to get a dealer to accept a high-value car as trade-in.
 
oohh I'm not actually sure if it's hp or loan. I must root out papers. I think I recall seeing hp agreement.

And I realise I owe the 17k but I was askingfor suggestions to trade down! It's kind of annoying that I've an 06 car that's worth way more than say an 03 that I'd like but yet I can't exchange!

Apart from finance issues it is simply too small in the back with our new infants seat installed. Only room for one adult.
 
maxol said:
oohh I'm not actually sure if it's hp or loan. I must root out papers. I think I recall seeing hp agreement.

And I realise I owe the 17k but I was askingfor suggestions to trade down! It's kind of annoying that I've an 06 car that's worth way more than say an 03 that I'd like but yet I can't exchange!

Apart from finance issues it is simply too small in the back with our new infants seat installed. Only room for one adult.
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Okay - if it's a HP agreement there is a thing called the 'half rule' - which means that you can pay half the total hire purchase price (that'll be on your agreement) and return the car, undamaged, to the finance company/bank. After that, you'll owe them nothing.

If you haven't paid half the HP price, your options are more limited. But you could do the following:

1. Return the car to the finance company, they sell it & decuct what they get for it (not much!) from what you owe them - hence you still have a massive loan to pay off. This is called voluntary surrender.
2. Pay off as much as you need to bring you up to half the HP price.

The reason I asked if it's HP (aside from above) is that if it is HP, you can't sell the car as you don't own it - the finance company does.
 
I think if you sell the car privately, disclose to the buyer that there is money outstanding on the car, arrange to clear the outstanding balance from the sales proceeds then you'd have no problem.

However,
what can you reasonably expect to get for the car.
Will that cover the outstanding amount.
If not, then its unlikely anyone would buy the car from you.

From the info you gave I don't think the half rule would apply even if it is hp. You have four years left and I am assuming the max loan period was for five years.

By the way four years at 420 pm is closer to 20k than 17k. If its hp, the bank will want total repayments not just outstanding capital only.
 
aamstudent said:
I think if you sell the car privately, disclose to the buyer that there is money outstanding on the car, arrange to clear the outstanding balance from the sales proceeds then you'd have no problem.
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Not good avice IMO.

If there is HP o/s on the car then the OP cannot legally sell it to a private buyer without the okay of the HP company.
 
Please read the full post before judging. I said "arrange to clear the outstanding balance". Both the buyer and the finance company would have to agree.
 
What is the car worth today. Unless its something special I cant see you getting anthing near €17K for it. Is it a popular model? What are they selling for on the likes of Carzone (cheapest)
 
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