adywrx

y dont u just bye the car in cash and have done with?

ZippyLane

It's in the agreement I have, after 18 months if all payments are upto date and the car is in good condition, I can hand back the keys and walk away..

VJ_STi

iTrader: (1)

IIRC You can do this with almost all car loans/lease type agreements that are arranged through a garage, as Mattw and Howiespreza have stated providing you have paid x amount (usually minimum 50% and this should be stated within your agreement) however the car does not belong to the garage it belongs to the finance company as they have effectively purchased the car and you are then buying it from them. The sting however is this :- no finance company likes to take a hit so although they can't give you negative marks on your credit rating because it is part of the contract I would expect they would be able to make a note which in turn would make it more difficult to get credit in the future, because what finance company is going to want to lend you money and run the risk of being stiffed further down the line coz you've changed your mind or have lost big money on a cars depreciation. Although this is my understanding I would speak to the CAB before going ahead with anything because you spend a lifetime building up your credit rating, so don't make any hasty moves. Hope this helps and let us know how you get on.

GrollySTI

If you've paid at least 57.5% of the cars value back in say 2.5 years - what sort of car is only worth 42.5% of its purchase price after such a short period?!?

That would be like my 05STI+PPP+18"PFF's+Prodrive Springs with say 25k miles being worth about £12K after 2.5 yrs .......... surely not!!

I also thought that these finance agreements always tried to underestimate the value of the car after the finance term.

I suppose I'm not saying you can't, just who would want to take such a hit?

simo

I have done this before with a car. The rule is the car has to be for a private individual & from memory, no more than 25k inc interest. Once you have paid half the purchase price & all of the value of the interest on the full price you are within your rights to ask the finance company to collect it. The car has to be in good condition (ie no accident damage) but apart from that you have no further responsibilty for it.

So you could by a new WRX for 20k, run it for 3 years and as long as you have paid 10k + all the interest just give the keys back. It is worth checking your finance agreement thou as I company purchased cars are not under the same regulations and as said all over 25k are not covered either.

Simon

simo

You try & get 12k for it in this market mate

fitzscoob

Doesnt sound too far off.

Gutmann pug

Lets ask specC57 or Simo if they have struggled with finance as they have done it in the past.

simo

Gary, no problems at all & have never been refused credit (The only ones who may not want to loan you any more money is the finance co who you handed the car back to imho but I never tried )

Gutmann pug

Cheers Simo.

Spec'c'57

iTrader: (1)

not a problem here either....

Just got a 200k mortgage, as a first time buyer also...

davyboy

Yeah pay 3k over the odds for an 03 WRX.......PMSL

Spec'c'57

iTrader: (1)

oh this should be stated on the HP contract...

Gutmann pug

Not got to, as in having payed that amount off yet.

cw42

iTrader: (1)

Read this post with interest (excuse the pun ) as I've just been reminded of what I did a few years ago. I've just bought a new car as some of you are aware, and when I came to financing it, a big black cloud hung over my head for a few days, which could have meant me not getting the car
A few years ago, to get my first scooby, I handed back to the finance company my fiat bravo hgt. I'd paid over the alloted amount needed to do so, and the contract clearly stated I could do it. So I did. Which freed up my money to start paying finance on the scooby, which the dealer at the time was happy to arrange. The dealer of the scooby had told me about the clause in the first place, as it was in his interest to do the deal. What he failed to mention at the time, and what has been mentioned on here in this thread, is that it will put a mark against your credit rating in the future. Now bear in mind, I bought my scooby back in easter 2003, and just bought my new one in November 2005, and this still came up on the credit search with the finance company I'm now with. It's only because its a friend of the family, that I was able to go ahead with the finance.
So gutman, be aware of what could come round to haunt you in the future. Your idea is totally sound, and the contract is solid, but the finance institutions would then look upon you as a dodgy bet in the future
Chris.

massivez

Hi there just been reading this post and 8 yrs ago i done it with a car i bought from a garage( hard times and all).The finance company i took the car with just arranged everything for me, they told me what i owed to bring it up to the 50% mark (200 and odd i think) i was 1 month below my half way stage and then they arranged the collection of the car from my door with a transportation company, i never had anything else to do with them or the car after that.They did however ask me the condition of the car which was immaculate.Hope this helps... Graeme

Jamescsti

I did this a few years ago with a Fiat as well.
I gave the car back to the finance company, who sent someone out to inspect it and was satisfied with the condition, then left it at an auction centre for them.
Straight after I got a loan from my bank for a new car who gave it straight away, no problems.
As someone else said you might just have problems getting finance off the same company, although i've not had any problems since then?

sirscooby

Finance companies appear to charge stupid interest rates, in the past to buy cars I have had bank loans, never a problem, and in this current climate you can get some great apr's at many high street banks. Fortunately, to buy my o2 wrx for 12 grand I was in the fortunate position to pay for it(house sale). I always thought finance companies to be evil bsatards.

Rob

sgcooby

For an 05 STI PPP. No Problem. You would easily get a lot more than that.

Trap2Terrorist

iTrader: (3)

I bought my BMW on finance (balloon payment agreement) a few years back.

You have to pay roughly half the cost of the finance agreement before you can give it back and walk away, or before it's legally yours to sell.

Alternatively you can can just drive it onto the forecourt, chuck the keys and documents on the counter and walk away (take a credible witness of course).

They'll then give you a maximum debt figure that you can owe before they auction it off. For example, if they determine that the most you can owe is £5000 and they expect to auction the car for £8000. If the car sells for £8500 you'll only have to repay £4500.

Of course the car won't meet the valuation so you'll end up owing £5000. They'll then give you 28 days to pay the debt before offering you a repayment plan - £1250k per month for 4 months

After that you'll offer £100/month, they'll refer it to an external finance company and you'll agree on £150/month for 34 months.

Then, if you're lucky, your missus will win a £10k out of court settlement for sex descrimination at work and you'll pay it off.

Job done, lesson learned. Don't get balloon payment finance. In fact, don't buy something you can't afford.

Gutmann pug

Interesting stuff I have to say.

Gary

RyanWRX13

I done this a few years ago aswell. I had a Renault 19 16valve and gave it back to the finance company. If you look on the agreement forms there will be to figures-the first is roughly a 1/4 of your payments which once paid the company can not take the car off you without going for legal proceedings. The second is as most others have said is the figure where you can give back the car. I did this about 6 years ago and I had no problems with getting credit, i.e. I got my mortgage 3 years ago with no probs. You don't get blacklisted as such, but you'll probably never get credit off the same company or a company who is linked with them.

Cheers Paul.

simo

Read the above quote mate, in 2,5yrs. Look what people are trying to sell o2 & 3 cars for now with little luck . I just hope that the market picks up for them.

Simon

homerjay

so lets simplify this.

New Car £20k
Term: 5 years
Rate: 8% apr
Per month: £405
total loan: £24k

at 2 & 1/2 years (at which point i will have paid 12k) i just give em the keys and walk away?

is the same for pcp deals?

Moley

iTrader: (9)

Basically yes.

I used to work for a motor finance company, and we used to get lots of people give the cars back at the end of the term. Most of the time they weren't worth what the balloon payment was, so they gave the car back and the dealers have to take a kick in the nuts!!!

Gutmann pug

If yours has a balance at the end which must either be payed or the car given back then yeah same sort of idea.

Diablo

but remember the balance at the end is included in the "total amount payable" calculations, so it would generally be 50% of that amount you would have to pay before walking away.

I'm changing my car soon 2 years into a 5 year deal. Might well be cheaper to pay a lump sum to have then paid 50% of the total payable and walk away, rather than to pay the difference between HP settlement and the likely sale value.

DonnieDarko

mine's paid for

I paid £16,100 OTR for an EU for a Maltese 55 WRX Wagon incl cat 1 and metallic paint.

had a £9000 personal loan tied to my mortgage from First direct. You then pay back as and when you want, i was planning on doing it around £200 pm but me dad's just given me some downpayments on my inheritance, so now its paid for and i've whacked in £16000 to the mortgage too!!

couldn't have done that with an HP

trigot33

correct !!!!! every finance agreement (by law) to do with motors has this opt out clause, simply because the finance companies lose sod all and you have an oportunity to end an agreement half way through your payments. Bear in mind any late payment charges or arrears need to be paid at this time also, and in addition car needs to be of ``good`` condition , mot`d and taxed , and you dont drive to any garage to hand back the keys but meet a representitive from the finance company in question to arange the handover.
TIME FOR A NEW EVO THEN I THINK LOL.

Crosstalk

If you hand your car back, you will most likely (depends on the lender you got the car through) end up with whats called a "voluntary termination" flag on the finance agreement record which shows up at Credit Reference Agencies.

Other lenders such as banks, credit cards, mortgage lenders and so on won't generally bother about this, but car finance companies are much more likely to. When doing a search of your credit records remember what's important is how anyone you're applying for credit from assesses and makes their decision on the back of that info. And they all have different lending policies aligned to their particular line of business.

So it isn't a "black mark" across the board but it might come back to haunt you in any future car finance deals.