Finance Help

[MattDRX]

Afternoon All,

Anyone here work a bank or similar.

I have no idea on these things and asking for a mate.

Long story short, took a car on a 5 year plan to buy / own.

Cannot afford it anymore, called finance company, Barclays, and they said they have no financial interest in the car and it's just a loan not secured anything.

Car currently worth about 9K and the agreement to settle stands at about 16K.

Any suggestions on what to do, apparently she cannot hand the car back and is ultimately !Removed!.

there is no VT written in the agreement although they will take 10K plus the car to settle.

anyone been in this situ before?

thanks.

Matt.

[jeebowhite]

If the car is bought with an unsecured loan there is nothing that can be done. Basically if a finance arrangement is made on hire purchase then you can hand the car back (hire purchase, pap etc) but when you take out a loan they won't do anything with it.

If she is really struggling she needs to plead poverty. Speak to stepchange debt charity and get onto a debt management plan or Consider a debt relief order as this will allow her to manage the payments as much as possible.

[jeebowhite]

The only other thing she could do us downsize the car, if she part ex's and gets a much more economical / financially viable car and the finance company agree to transfer the existing plan to their care, she could look to extend the agreement to 7 years or more if it's offered. That way she still had a car, can pay off a lump sum of the finance, and spread the rest over 7 years bringing down the rest of the monthly payments to a manageable level.

[Phil 87]

I agree about downsizing the car, or if possible just sell the car and do without, either way use the money from selling the car to refinance the loan (if the bank allows that) so that the repayments are smaller.

[MattDRX]

Cheers guys I'll let her know, the car is only a 308 pony little engine, my advice was to ring them and ask to freeze interest as they cannot charge interest if you plead financial difficulty, that would lower the payments a touch and sell it asap, depreciation of this is unreal

[Phil 87]

It might be worth asking on another forum like Money Saving Expert, there are some people on there who know as much about money as we know about Fords :)

[jeebowhite]

That's a misunderstanding, they can and are entirely entitled to charge interest. The Only time interest is forcibly stopped is when the account is with a debt collection agency after a default. But to get the most, she needs to buy a car less than half the value of the 308 and put the difference to paying it off. That's the only way she could plea bargain with them is to show an effort to pay them back, some favour this, otherwise she has a lump sum paid off and reduces the amount. She can sell it as long as it's not owned by a finance company. Otherwise she will be in trouble

[gus607]

Surely she can't sell a car on finance ?

[Ford_Man]

Surely she can't sell a car on finance ?

If the loan she got is unsecured then technically the car belongs to her as she paid the relevant dealer in full E.G cash

[Phil 87]

Surely she can't sell a car on finance ?

If the loan she got is unsecured then technically the car belongs to her as she paid the relevant dealer in full E.G cash

Exactly, and this is my situation too (although thankfully I can afford to pay the loan). I could sell my car tomorrow, and the bank wouldn't know or care, as long as I keep up with the monthly payments.

[alexp999]

My Fiesta was the same, dealer arranged finance but it was actually an unsecure loan, so when I sold it for my last Focus, the loan just kept going.

As others have said, the car is therefore hers outright.

Is 9k a cash price? Seems a little low if still 16k remaining. Negative equity isn't usually that big unless she paid well over the odds on the car?