# Finance Advice



## TYPH3OUS (Oct 9, 2014)

Hi guys,

Just want a bit of advice on what you would do in this situation. 

My job is in a bit of a weird moment in time. The company has had the main production moved down to London except for myself (due to me being due our first little one any day) so the boss has been kind enough to let me still work for the North East. I do however know that it won't last and I am currently looking for another job in the fear of being either asked to move or be made redundant. I have a mortgage and I'm close to my family so that's out of the question. 

So, the jobs I'm looking at in my area aren't as well paid as my current role and I may have to free up monthly outgoings. 

So I'm 2 years into my 5 year HP deal on my 2012 focus. To free up monthly outgoings I am considering re financing my current car when the time comes to reduce the monthly payments. 

Or.

Part ex my car for something older and reduce the amount that I owe. The only downside is that I will be upside down for a longer period of time, but free up some monthly income. 

Either way I know I will still be upside down on my loan, and I don't know if I'd feel right having such a big loan against a cheaper car. 

I've been looking at 2007-8 Octavia VRS or Seat Leon FR 2.0 cars of around the same year. 

What would you guys suggest as the best option or course of action? This is a worst case scenario if I decide I need to free up some cash. 


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## Finman (May 24, 2013)

How long have you been with your current employer?

If you have a redundancy package use that to pay the car off.


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## Alfieharley1 (Jun 8, 2014)

There is a way out but it does mean you will need money at the ready. Halfway through which you are already near you can do a voluntary termination. You just need to make half the payments towards the car and then you just ask to voluntary terminate.
You won't need to pay anything unless there is damage to the car and can just hand the car back instead of being in negative equity.


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## andy665 (Nov 1, 2005)

Alfieharley1 said:


> There is a way out but it does mean you will need money at the ready. Halfway through which you are already near you can do a voluntary termination. You just need to make half the payments towards the car and then you just ask to voluntary terminate.
> You won't need to pay anything unless there is damage to the car and can just hand the car back instead of being in negative equity.


Its not halfway through the agreement when you can voluntarily terminate - its at the point where you have paid half of the total amount payable - this is set out in the finance agreement paperwork


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## TYPH3OUS (Oct 9, 2014)

andy665 said:


> Its not halfway through the agreement when you can voluntarily terminate - its at the point where you have paid half of the total amount payable - this is set out in the finance agreement paperwork


Hmm thinking about it now if I wait until either of those points in time I would at least be striking nearly even with the value on the car and how much I still owe.

If that's the case is probably be better off refinancing and then pumping any spare cash I had into the loan every couple month to get myself in credit that I can then use to get a cheaper car and hopefully clear off all the finance.

As I say, it's a worst case scenario as id much rather keep the car if I can as I know what's been done to it and the condition etc

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## lick0the0fish (Feb 29, 2016)

TYPH3OUS said:


> Hmm thinking about it now if I wait until either of those points in time I would at least be striking nearly even with the value on the car and how much I still owe.
> 
> If that's the case is probably be better off refinancing and then pumping any spare cash I had into the loan every couple month to get myself in credit that I can then use to get a cheaper car and hopefully clear off all the finance.
> 
> ...


I disagree

If you want to reduce payments and you're close to being able to VT the car then do it. Then get a cheaper car on HP. No point refinancing what you owe AND getting another car. You will pay much, much more in the long run.

I used to see people switching cars and "lumping and bumping" which is essentially what you would be doing. Its a bad move.

VT the car, and then get a cheaper one. Personally that's what I would do to keep your monthlies down.


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## TYPH3OUS (Oct 9, 2014)

lick0the0fish said:


> I disagree
> 
> If you want to reduce payments and you're close to being able to VT the car then do it. Then get a cheaper car on HP. No point refinancing what you owe AND getting another car. You will pay much, much more in the long run.
> 
> ...


What about refinancing and keeping my current car? Just to add a year or two back onto the finance? So I will still owe the same amount but it will be spread back over 4-5 years and reducing the monthly payment

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## lick0the0fish (Feb 29, 2016)

TYPH3OUS said:


> What about refinancing and keeping my current car? Just to add a year or two back onto the finance? So I will still owe the same amount but it will be spread back over 4-5 years and reducing the monthly payment
> 
> Sent from my iPhone using Tapatalk


Ah I see what you mean, I'm sorry I assumed you meant changing and carrying the negative over onto a different car.

In principle yes you would save monthly payments but pay more overall. However it would enable you to keep the newer car you have (should be more reliable - less maintenance etc.)

It might be worth speaking to your finance company to see if they would be willing to refinance on a new HP deal to keep the loan secured on the car as opposed to a personal loan (I am in the trade and firmly believe its safer to have the money secured against the car instead of yourself.)


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