giving your car back to the finance company

[Russ]

does anybody know about this? i was told by sales chap when i bought my car, that, when you've payed half the term of the finance, you can hand the car back to them and aslong as its in decent condition (i.e. nothing broke or hanging off) they have to except it back. in september my ill have my 3rd year NCB, and will have payed half the finance, but owe much more than the car is worth, but how will this affect credit rating?

[J4MES]

it won't. i did the same with an astra i had, which was also in 'negative equity' because of the high miles i'd put on it (worth ~£3k, £4.5k left to pay). it makes sense, unless you're prepared to ride it out... check the small print though, as it's not as common nowadays i think...

[Russ]

im stuck either way, need a car, if i give it back i have no cash saved up to buy a new one, unless i get the new job im applying for, but if i get that, i can afford to trade in my car cheers james, ill have to wait and see what happens now

[IainB]

Russ,
Ive done it with no problems, the bloke who picked it up was very suprised about how clean it was (most probably as we had spent the day giving it a thorough clean and and out), and it went straight to auction.....
Credit rating wasnt effected, and bought a el cheapo Mondeo to keep me going..... nearly 2 years on and its still going and the A/C still works

[Ant]

I bought my last clio on finance and gave it back after 2 years and a bit (was a 3 year agreement). I owed more than the car was worth, but as I'd paid more than half the cost of the car, I was able to hand it back with no fuss. Just sent them a letter saying I would like to hand it it back, a week later they turned up and collected it. I then cancelled my direct debit, job done.

[Russ]

i have a crack in my front bumper which you can easily see, has this gotta be fixed too?

[5lab]

yeah i'd say any body damage is beyond 'normal wear and tear'

[Russ]

bah, ill get that sorted either way tbh, looks a reet mess

[listy]

some places can "weld" plastic so it dont look like was damged

[Fox]

Actually, whilst it wont affect your credit rating in the same way that defaulting on payments would, doing this CAN make it harder to obtain credit.

The reason why you can do this is not becuase the finance company is nice, but becuase the Consumer Credit Act requires it - it's going to cost them rather a lot if you do it, and they can and will make a note on your file to say you didn't continue with the agreement and terminated half way through.

This can make other lenders a little more wary of lending to you if they feel there is a risk of you doing it to them, as well.

The best thing to do is never finance most or all of the cost of a car, especially if the car is something mundane and depreciation-prone like a Ford Focus or a Vauxhall Astra becuase you will quickly owe more than the car is worth. If you finance only 50% and/or buy smart, you can ensure that you always owe less than the car is worth, meaning if you ever want to stop paying you can sell the car and use the money to pay the finance off - much better for all parties involved.

[Russ]

6 month thread anniversary, still got my car, but now ive payed half the term and a few months extra, will be giving the car back as i'm getting a mortgage instead :| will be carless (apart from birds Ka) for 6 months ish, but my next car, WILL be a drivers car, even a used elise would be nice.

[herulach]

IIRC its half the initial capital, not merly half the term, the two probably wont be equal

[jenken]

hey,
ive got a car on finance, which is worth £8000 but we had to take an extra £3000 motor loan on top due to part ex-ing our other two cars to buy this one, and obv with outstanding finance left on the 2 cars, this makes up the extra 3 grand. now we are struggling to pay and extortionate amount of money on this car monthly and would like to hand it back to the finance company, but unfortunately, we only got this car in april 08. can we do this?? any advice would be greatly appreciated!!

[eshrules]

hey,
ive got a car on finance, which is worth £8000 but we had to take an extra £3000 motor loan on top due to part ex-ing our other two cars to buy this one, and obv with outstanding finance left on the 2 cars, this makes up the extra 3 grand. now we are struggling to pay and extortionate amount of money on this car monthly and would like to hand it back to the finance company, but unfortunately, we only got this car in april 08. can we do this?? any advice would be greatly appreciated!!

this is probably not the best forum for getting advice regards this, but I'll try anyway.

You basically put yourself into a £3k negative equity situation from the beginning, having had the contract for less than 12 months, if you can't afford the repayments, you'll need to ask them to go for a repossession. They'll need a court order for this and it will have a negative impact on your credit rating.

IMHO, get in touch with citizens advice and/or the national debt helpline, you're going to need some support.

[directhex]