# Car finance options



## Mattey h (Apr 19, 2011)

I have a car on finance through moneyway car finance. Now my misses wants me to sell the car, as the repair bills are asstronomical, and by another car with the money. I have told her it is illegal to sell the car with finance attached, but she thinks if we just keep making the payments it "won't hurt, as they won't know"
I presume my standpoint is correct, and it would be illegal? I presume I could sell the car as long as I settle the finance, but there is not enough monetary value in the car to clear the outstanding balance.


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## danwel (Feb 18, 2007)

You'd need to sell car and pay finance as a result if the sale. Any outstanding finance will show up on a vehicle check too.

Failing that a personal loan to pay off total remaining finance


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## Avanti (Jan 17, 2006)

It's not illegal, but the car belongs to the finance company, so you would need to seek their permission to sell it and agree to continue with the payments.
The car I had before this the owner had 3 more payments to go, but the finance agreed he could clear it as I was ready to buy and he could settle immediately.


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## Dixondmn (Oct 12, 2007)

its a bit tricky, anyone buying a car privately will surely do a history check, so could mean wasted time and effort in advertising it.

You're best option would be to find a way to finance the balance and settle your debt with the lender before getting into more stressful stuff.


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## Johnboy82 (Nov 12, 2010)

Have a look at your agreement. There will be a "you rights to terminate" section. If you've paid the amount that it states then just hand it back


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## Bero (Mar 9, 2008)

Mattey h said:


> Now my misses wants me to *sell the car*, as the repair bills are asstronomical, and by another car with the money. I have told her it is illegal to sell the car with finance attached, but she thinks if we just keep making the payments it "won't hurt, as *they won't know*"
> I presume my standpoint is correct, and it would be illegal?


Yes this would be illegal as you are not the owner - worse case is they find out, you get the police at your door and the finance company rocks up to the 'owner' with a warrant and takes back their property without compensating him.


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## justina3 (Jan 11, 2008)

Avanti said:


> It's not illegal, but the car belongs to the finance company, so you would need to seek their permission to sell it and agree to continue with the payments.
> The car I had before this the owner had 3 more payments to go, but the finance agreed he could clear it as I was ready to buy and he could settle immediately.


are you sure on that mate i would have thought the car doesnt belong to him so he has no right to sell, if he did without concent isnt that the same as stealing ?

never heard of a company letting go of a car before its cleared, you learn something new everyday


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## rtjc (Apr 19, 2009)

Personal loan, pay off the car, then sell it. Do not sell a car which you have not paid for.


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## Avanti (Jan 17, 2006)

justina3 said:


> are you sure on that mate i would have thought the car doesnt belong to him so he has no right to sell, if he did without concent isnt that the same as stealing ?
> 
> never heard of a company letting go of a car before its cleared, you learn something new everyday


It is correct, as others have pointed out a HPI check will reveal outstanding finance, so more fool the buyer if they do not conclude the relevant pre buy checks 1st. When I purchased the MK4 the owner had said he had permission to sell and gave me the agreement number and company, who I called up and they said it was ok and emailed me the confirmation, bank transfer and job done. Also the buyer can (with agreement with the finance house) pay them the money and the residue passed onto the owner.


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## Kerr (Mar 27, 2012)

If you have the car on hire purchase and have paid back half of the total repayable, you are legally entitled to hand the car back to the finance company. 

The car has to be in reasonable condition though. 

You can sell the car. 

Make sure any potential buyer knows there is finance and let them pay the balance directly to the finance company.


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## justina3 (Jan 11, 2008)

Avanti said:


> It is correct, as others have pointed out a HPI check will reveal outstanding finance, so more fool the buyer if they do not conclude the relevant pre buy checks 1st. When I purchased the MK4 the owner had said he had permission to sell and gave me the agreement number and company, who I called up and they said it was ok and emailed me the confirmation, bank transfer and job done. Also the buyer can (with agreement with the finance house) pay them the money and the residue passed onto the owner.


cheers as i said above you live and learn :thumb:


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## SteveTDCi (Feb 8, 2006)

My brother is currently buying a used ford focus with outstanding finance, according to ford credit it is illegal to sell the car as they actually own it, not the seller. The finance needs to be cleared before its sold. Whether you do this or the new owner does won't matter. Nobody would buy a car knowing finance is outstanding. Where you will struggle is with the negative equity you have in the car.


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## Mattey h (Apr 19, 2011)

Thanks for all the replies guys. As I thought it would be illegal to sell. I am indeed stuck in negative equity, I owe over 12k on the finance, but there is most probably at the most 5k in my car. It's only the wife that wants to change the car.


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## SteveTDCi (Feb 8, 2006)

It's not on a ballon type payment is it ? If so you would almost be better just returning the car and walking away.


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## Kerr (Mar 27, 2012)

Mattey h said:


> Thanks for all the replies guys. As I thought it would be illegal to sell. I am indeed stuck in negative equity, I owe over 12k on the finance, but there is most probably at the most 5k in my car. It's only the wife that wants to change the car.


How have you managed to end up owing 240% of the cars value?

That seems to be very extreme to be honest.

Finance companies have been stickier about loading agreements with negative equity and a car of that value shouldn't have depreciated too much.

Are you sure your figures are correct?


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## andy665 (Nov 1, 2005)

If you have repaid back more than 50% of the TAP (total amount payable) then you exercise your legal right to terminate the agreement. The TAP should be clearly shown on the agreement. 

You will be liable for any wear and tear that is considered excessive (most finance houses the BVRLA guidelines so its fair) but voluntarily terminating an agreement does not affect your credit score - its a legal right


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## Mattey h (Apr 19, 2011)

Kerr said:


> How have you managed to end up owing 240% of the cars value?
> 
> That seems to be very extreme to be honest.
> 
> ...


Crappy credit history and high interest rate. The car was £8995. Had it nearly 2 years. Paying £256 a month. Some sort of daft apr, last time I had finance I was paying 38% apr.
Always wondered why people with a bad credit history get hit with higher interest rates.


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## Bero (Mar 9, 2008)

Mattey h said:


> Crappy credit history and high interest rate. The car was £8995. Had it nearly 2 years. Paying £256 a month. Some sort of daft apr, last time I had finance I was paying 38% apr.
> Always wondered why people with a bad credit history get hit with higher interest rates.


:doublesho:doublesho

You end up paying >£18,000 for a <£9,000 car!! I work out it's a 6 year loan (or 5/4/3yr + balloon payment) so at 2 years will not be 1/2 way through and don't have the option of handing it back.

Aside from the legal issues please don't try and sell this one on the 'down low' and finance something else at those crazy rates (or any rates), it's the kind of hole that becomes impossible to get out of.


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## Beancounter (Aug 31, 2006)

Mattey h said:


> Always wondered why people with a bad credit history get hit with higher interest rates.


Seriously :wall:

It's risk. If you have got into credit problems before, you are more likely to do it again, therefor you are a bigger 'risk' to the lender. :thumb:


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## alan hanson (May 21, 2008)

wow, might sound harsh but if you've been in trouble before how comes you decided to take that debt on with the conditions on a 9K car couldn't you have picked something cheaper up?

sad thing is there's so many out there the same too much stuff nowadays is bought with money peeps don't have

Hope you get it sorted either way and sorry if it sounded like i was having a dig wasn't and now it doesn't help you in any way


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## PhilDc2 (Dec 7, 2011)

38% APR! That is shocking. The only way to sell the car is to tell the new buyer that there is outstanding finance and make sure its payed off when the new owner signs for the car.

Sorry mate but sounds like you made a bad financial decision and now you're paying for it :-(


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## SteveTDCi (Feb 8, 2006)

For me i would find out what the settlement figure is, then work out the lowest way to pay this back. The last thing you want is to be paying for a car that you cannot afford to repair.


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## Mattey h (Apr 19, 2011)

Looks like I will be keeping the car. Not really a bad financial decision, but was the only finance I could get. Had a better job when I signed for the car, but was made redundant last Xmas. Got a new job within a few weeks, but the pay was nearly £200 a week less. You know how it is, with bills to pay I couldn't hold out for a better payed job to come along. And for the comments about the apr, I had a bad run of credit issues about 8 years ago, but it doesn't mean I am still a risk now. Just think that companies penalise people with a bad credit history unfairly, and they might not be in as bad a financial position now as they were in the past, but still have to pay the price. They don't seem to give you the benefit of the doubt or a chance to prove your situation has changed.


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## SteveTDCi (Feb 8, 2006)

Let's hope it's reliable then  for me I'd rather a £500 banger than pay that amount in interest but then we are all different


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## PhilDc2 (Dec 7, 2011)

Mattey h said:


> I think that companies penalise people with a bad credit history unfairly, and they might not be in as bad a financial position now as they were in the past, but still have to pay the price. They don't seem to give you the benefit of the doubt or a chance to prove your situation has changed.


They don't give you the benefit of the doubt or a chance because its their money. Its all risk, they say your high risk because of your past, you say i'm not high risk i have changed. But then you have money owing on an object than its worth.


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## Kerr (Mar 27, 2012)

Horrible situation to be in. 

It is a vicious cycle once you end up with bad credit. 

The only way out is to prove yourself over time. 

Getting a credit card and using it whilst paying off the debt would help a lot. 

The flip side is if you apply for a card and get refused it will have a negative effect.


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