S3TH

iTrader: (2)

Has anyone ever bought a car on say a 3/4 year Higher purchase agreement and then sold it/changed it early on in the agreement?

Looking at the terms of my agreement I could end the contract early but the penalty would be horrendous so its really not worth doing.

however how hard is it in the real world to change the vehicle but keep the same agreement with the finance company? I am guessing they would expect you to sell the vehicle and then recalculate the deal on another car?

Just wondered if anyone had done anything similar and how/if did it all work out?

thanks.

Henrik

iTrader: (5)

if you trade your car in at a dealers they'll sort it out for you. What happens then is that you give them the car, they settle the finance and any difference is used as a deposit on your new car.

If you're selling it privately, you're better off taking out a bank loan and clearing the finance as nobody in their right mind would buy a car with outstanding finance on it. Some people might be happy to pay the finance company your outstanding amount and giving you the difference between agreed price and the finance outstanding, but I'm thinking that they are few and far between.

S3TH

iTrader: (2)

Yes have considered the bank loan option to clear the finance but it might not be feasible in my current circumstances.

I took the HP agreement out with a finance company and they then paid the ticket price to the subaru dealer. So what you are saying is I could take the car to any dealer and they would settle the finance? and any difference would be a deposit and any shortfall I would make up?

hmm im thinking economically that could incur quite a penalty

R 14NS R

it depends which finance company is used,if you have had the car for over 60% of the term then you should be there or there abouts (obviously depends on residuals of the model), with what the car owes, however your initial deposit will effect this too.

the fee for settling early once again depends on who it is financed with but most companies you will not pay the interest on the remaining term.

TheVoices

iTrader: (5)

Check your agreement, if it is 'regulated' one of the options is to give the finance company the car back once you have paid half the total amount payable under the agreement (including interest) This is useful if you have negative equity (car worth less than you owe on the finance agreement) This procedure is called a voluntary termination or 'VT' and doesn't affect your credit rating, it's your legal right under the consumer credit act.

sti-04!!

Sorry for the thread hijack, i have a similar type question.
Friend of mines has a car that due to neg equity the vehicle was financed on a personal loan. He now wants to get rid of the car, he has a buyer thats going to pay x amount, but still leaves my mate with x amount to pay himself.
Its going to take him 1 month after he "sells" the car to raise the amount he has to pay himself before he can pay the car off.

Can you see any legal problems with doing this ?

Is the car still classed as financed seeing as it is a personal loan ?

Also the guy thats buying the car doesnt have an issue with buying the car still outstanding finance as he knows it will be paid off quite quickly.

Thanks

Henrik

iTrader: (5)

if it's a normal bank loan it probably isn't secured against the car, in which case the bank doesn't care what he does to the car. In fact, if it's not secured against the car, he doesn't strictly need to pay the loan off immediately either (although it might be prudent to do so, of course)

Edit: best check the loan agreement, of course. It will state the terms in there.

r32

Its almost always best to have a personal loan to buy a car, rather than the HP, not only are the rates generally lower but you can sell the car on without settling the loan. With HP they own the car until its paid for, so you cant legally sell it without settling the finance.

sti-04!!

The finance was arranged through the garage he bought the car from, but because he owed £1500 on his last car finance deal they wouldnt regulate the finance deal so its classed as a personal loan. Is it still the same thing ?

Ie personal loan from the finance company against personal loan from the bank.

Sorry for the daft questions just want clarification.

Thanks

MattN

NO it's not the same thing. If the gararge are saying his loan is not covered by the credit consumer act 1974 then they are basically loan sharks.

A personal loan is just that regardless of who the loan is with (they ( the garage) must be licensed credit broker to facilitate the loan.)

All loans under a certain value are covered by the act, I can't remember if it's 15k or 25k.


SORRY TO RANT BUT ...
It really does surprise me when people don't have a clue what type of loan they have just agreed to. Considering the cost of the loan, would your mate buy a product for x thousand pounds without first checking it was OK? For example you don't just buy a TV for 5k without checking it's a) what you want and b) a sensible price.