Advice on car payment

[yyydelilah]

We purchased a new car in June last year. It was actually brand new, but just new to us.

It's the same brand as our previous car, just the next size up, as our kids are getting bigger. We didn't do a huge amount of research but have been shocked by how bad it is on fuel consumption.

Our old car was great for mileage so we didn't even really think about it when buying this one.

Anyway

Our payments are about £350 a month, and we still have two years left. And at the end of that we'll still about £16k to pay off.

It may not be possible but I want out! I'd like to go back to our old, small, cheaper car - if possible.

Has anyone else had a similar experience? Are we just stuck with this car now for the next two years??

Anyone??

How have you financed it.

a bank loan? I’m assuming not.
a loan from garage? Hpi?
a personal contract purchase.

You can ask for a settlement figure and see if a garage will buy it off you - there may be some money left after Hpi is cleared.

Yep HPI.

I just don't want to end up paying over the odds, so am trying to work out of its best to just keep it or try to reach a settlement

Ask for a settlement figure, sometimes you can do this in your online account. You probably will be in negative equity but it's worth checking. Used car prices are high at the moment.

Otherwise, your only option is to try and negotiate with the dealer or pay the difference in the sale price and settlement figure to get out of the finance.

We had a similar situation; we'd paid for longer than you but we were about a year away from being able to give the car back or pay the lump sum. We tentatively approached the garage we bought it from and it turned out they were absolutely desperate to buy it back because of the current user car shortage. Not only did they settle the amount we had left on the finance, they also paid us extra.

It's worth a go!

If you're going to do it then now is the time before used car prices go back down - first step is to call your finance company. All depends how much you've paid so far. Some companies will also arrange a swop out depending on vehicle. Good luck.

Are you sure it's HP if there's a large balloon payment at the end? It sounds more like a PCP? I would get a settlement figure form the finance company. Get a rough valuation online from We But Any Car (taken with a pinch of salt as they WILL reduce that valuation when they see the car) but it gives you a rough idea. Then approach the dealership you bought it from with both of these pieces of information and see what they offer. But as a PP said used car prices had gone mental up to December last year, they're now starting to depreciate at a more normal level per month, but are still high as they went up so much late last year. Certain cars are depreciating more than others, for example if you had bought a 65 reg fiesta 18 months ago you'd probably be looking at £1500 more for it now as a part exchange price. Some stuff went stupidly high and is now being hit a little harder now, I'm talking crazy prices like £25k for a Ford Kuga that didn't even cost that new. There are still supply issues of new cars so take advantage of it now I would think.

As PP mentioned, sounds more like a PCP agreement.

Not impossible to get out of, particularly with the current used car market being as strong as it is. Go and look for the car you want and ask what trade in value you can get. You'll hopefully find you can at least break even on your current agreement, but if not they may still be willing to roll any shortfall into a new agreement.

Use the online dealers too as many of them can settle finance. They will give you a figure and you can compare it to your settlement and what the garage offer so you can have an idea of best offers.

I'd research carefully to check you can actually get the car you want before getting rid of the current one. Second hand cars are in high demand currently - so you stand a reasonable chance of the garage wanting to buy it off you, but also run the risk of not being able to get the car you want to replace it with.

Thanks all, really helpful.

I went on a valuation site the other day and it said the car was valued at £22,920. We took it on at £26,500.

We part exchanged our old car, in lieu of a deposit, on this car and will pay £3500 for three years, and then the big lump at the end.

If we're able to sell it back to the dealership I'm a bit concerned that because of the crazy car prices at the moment we'll end up spending a lot on another car and end up out of pocket.

As you may have noticed dealing with the ins and outs of car finance is not my strong suit 😂

Annoying as I'm usually pretty savvy with financial matters. I could kick myself for buying this car!!

I've changed my car before the end of the PCP term and just started a new agreement on another car.

I suppose you have to balance up the loss in changing to a smaller car vs running costs saved over the next few years.

I'm guessing it's a 4x4 type car for it to be so expensive as a used car and use so much more fuel? Is it a hybrid, which only save fuel on short journeys where you use the battery, but in my experience of using hire cars, use alarming amounts of fuel on long motorway runs.

What about a small petrol engined estate car, like a Skoda Fabia estate or similar? Gives you more room, but not expensive on fuel. But from your description of the finance arrangement, it's almost certainly a PCP, not a HPI, so the best option is probably to go back to the place you bought it, and ask about options to swap to a different car.

It is a SUV type car, but the other one was too. It was just a smaller version.

I had a look last night the current car is 37.7 mpg, where the old one was 51.1 mpg. Makes a big difference.

My petrol used to be £50 a month max. It's now £150 per month. Obviously not helped by fuel price increases but still 🫤

We were able to give the car back once we had met 50% of the payments on the last one we had
It depends on the contract
You need to read it