to consider handing car back to finance company. Don't know where to post this and need some sensible advice...asap!

[muffins]

Have VW polo, crappy finance deal taken out 2007 Jan, ends Dec 2010. Costs 271.92 every month. Have paid over half so can hand keys back to finance company (not sure how this works-anyone done this?)
If I continue to pay til end gonna have to fork out 5100 ish . Settlement figure currently 4440, barely value of car. Have listed on ebay to sell but wonder if I should save myself hassle and hand back or does this adversly affect credit rating?
I can just about afford repayments but moving to Yorkshire with little boy in Sept, won't need car much just runaround to and from work. Without car repayment can def afford rent on 2 bed property.
What should i do? Currently living with parents who very anti (everything I do) me selling car, think I should stick it out. Agree car is very reliable etc but perhaps too extravagant and expensive for my needs??
Arrgghh help!
Gut instinct is saying hand it back, spend a grand on cheap runaround, job done!

I can't help much but I can tell you tis, if you hand it back they will send the car to the auction (after detailing it). They will then knock whatever it sells for off the amount outstanding and you will need to pay the rest. As you will no longer have an assett they will want it back asap but will, probably, make an arrangement with you.

You may have trouble on ebay as anyone running a check on the car (and it is really easy, you just send a text) will see there is outstanding finance which puts people off. As the car has a charge on it the company can come and take it from the new owners if you do not pay IYSWIM.

Put this in legal/money matters and someone may be able to help. As Canute says, I doubt the finance company would waive any loss they make on selling the car, unless you have something in writing to that effect?

Going to go read paperwork now.....

Is there anyway the bank will lend you the balance? A "proper" loan will cost you much, much less. (Do appreciate that might be difficult these days though) Presuming your parents aren't willing to help out?

You need to look at the terms of the finance deal or talk to the finance co. If I understand you correctly you want to just give the car back and stop paying? I don't think that that is an option, even if you give the car back now you will probably still have to pay a settlement figure and if you don't pay it, then it will adversely affect your credit rating.

Parents.....don't go there
don't want to borrow it from them anyway.
Looking at Martin Lewis website, it's the 1/2 rule apparently and as long as you have paid half can hand car back with no penalties and nothing further to pay.
Where did you hear about auction side of things King Canute?

check out your contract if you have paid more than 50% of the loan then you can hand it back hang on juts finding the wording oyu need to have in your contract

You must have a very particular type of finance deal, some people have a buyback system some have a two year and new car system and so on. The most usual "straight" finance would follow my example. You, clearly, have a 50% deal which is another type again! (I was going on your op only which seemed to imply a "straight" finance).

If that is the case then you basically have a choice of keep it or give back and replace. It would depend on many things if you got enough from Ebay to pay the settlement figure fully. Personally I would say it is a risk!

The wording in the termination clause says "You have a right to end this agreement. To do so you should write to the person you make your payments to. They will then be entitled to the return of the goods and half the total amount payable under this agreement, that is £XXXX. If you have already paid this amount plus any overdue instalments and have taken REASONABLE care of the goods you will not have to pay any more." It seems to me that "reasonable" is quite a subjective term. Anybody could reasonably expect a 4/5 year old car to have a few dents & scratches. Heres something important to look out for - at the time of taking out the agreement most people also buy one or more insurance products (PPI,Gap etc). There is normally a separate CREDIT agreement for these (NOT HP). Sometimes this is not made clear when signing and the signatures are normally on the same page - these amounts would still be owed to the finance company even if the car is handed back so if you have taken out a £2000 PPI policy chances are you will still owe £1000. PPI is the most profitable part of a finance deal for both the finance company and the dealership and the cover offered is available for about a fifth of the price charged through standalone products - try googling PPI or CPI.

Hope that helps.

You need to check the paperwork to see if this rule applies to you. I have used this to hand a car back after half has been paid and wasnt blacklisted. the car does go to auction but you arent liable for any loss unless its mentioned in your agreement.

They send out an inspector and the car needs to be immaculate before they will agree to take it back.

Agree that if things are tight it is more sensible to have a roof over your head than a posh car.

If this is a HP agreement then you can hand your car back and you are not liable and this will be the end of your contract with the finance company. However you will have a note on your credit file showing that you VT (voluntary terminated) a finance agreement. This is not in its self a bad thing but you may find you pay higher rates and get limited terms on any other HP/CSA agreement you enter into in the future. Note you will not be liable if they sell the car for less than you owe unless the car is not in a satisfactory condition...

If it is a loan agreement then things are different I am afraid...

Well the car is in good condition, serviced back in Feb and got two new tyres last week. Needs suspension bushes (not urgently just in future) had booked this in for Fri but din't know whether to waste time now. May call company tomorrow. Has scuffed alloys and couple of scratches..how long does it take to send out inspector?
Def says on agreement can terminate after paying the 50% and returning the goods.
What if inspector comes out and says not in good enough nick, do they charge u for the visit?

hiya,
we are in the exact same situation as you atm
we have had our car for 2 yrs,settlement figure is £4900 the car is worth around £2000 at most,
we phoned the finance company and all we have to do is write to them to terminate the agreement ad the will come and collect the car,
so long as ts in reasonable condition we will hear no more from them,
we done this a few years back with our previous car too,they didnt send out an inspector they just come and collect it,
we have bought a little run around car for just now for a few hundred,which is much better for us,saves us spending out £160 a month for a car that will end up costing a FORTUNE in the long run,
phone the company and make sure you have paid half and ask them about terminating your agreement,
good uck
sarahx

We did this recently too.
We had paid 50% and rang them to terminate, they arranged to pick the car up and it does not affect your credit rating (it is noted on your file but not as a bad thing)

We got the car valeted and had a company called chips away fix a few bad scratches on the paintwork (cost £200) and the inspector commented on how well we had looked after the car lol.

They send it to a couple of garages and if they cant sell it it then goes to auction, you recieve a few letters saying you are in arrears but this stops once the sale has gone through and doesnt appear on your credit rating.

We then took out a loan and bought a decent car and paid off all the credit cards and saved nearly £300/month so was good all round