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Old 7th Sep 2009, 09:19   #1
EddScott
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What happens if you can't afford the finance and car is lower value?

A friend is going through a messy divorce and has an 05 WRX Impreza.

She owes about 8K on finance on the car and needs to sell it as soon as possible. Knowing my love for scoobs she's offered it to me but most I'll give her is 5K (needs major + belt and history has been lost) so unless she finds a way to pay the finance off first I can't buy it.

If she went to the finance company and said she can't pay anymore will they just take the car away? Will they take her to court?

If the finance company will just take the car off her shes better off doing that but if they'll take her to court and punish her financially shes better off using 2 or 3 cards to pay the finance company (if they allow credit card payments) and once the car is in her name I'll buy it from her. Better to service a 3K debt on 0% than an 8K debt on 8%.

However, we need to establish what will happen if she just stops paying.


(Please no why did she do it in the first place remarks, its clearly a poor deal)

Last edited by EddScott; 7th Sep 2009 at 09:21.
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Old 7th Sep 2009, 09:30   #2
Housey
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Depends on many factors not least the source of the finance and the terms, without these it's impossible to give clear advice suffice to say she will owe somebody something and they will want paying unless she can hand back using 50% rules which looking at the values involved I highly doubt.
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Old 7th Sep 2009, 09:37   #3
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Normally if she had paid 50% she could hand the car back with you can't do this with no service history.

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Old 7th Sep 2009, 09:38   #4
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You can do voulentary termination on a finance agreement if it states so in the agreement.

You can hand it back penalty free when you have paid up to 50% of the agreement and the car has had reasonable care.


I am currently going through this process with Honda Finance. They offer it quite freely and are very open about it. The problem is you need the service history and the car must have tax and MOT, or they will take 250 to recover and MOT it.

You can do this before 50%, but you need to pay the outstanding debt up to 50% of the agreement. The only negative point is if they deem the car is not of reasonable condition for age and milage, they can bill you for the loss of value. They can also put a note on your credit report that you took voulentary termination which finance companies might not like in the future, but that's only a small thing in my eyes.

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Old 7th Sep 2009, 09:42   #5
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Hold your horses everyone, it depends how you finance your cars, it's not black and White you can do a hand back!
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Old 7th Sep 2009, 09:42   #6
EddScott
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Originally Posted by [TW]Fox View Post
Normally if she had paid 50% she could hand the car back with you can't do this with no service history.
Really?

That seems a bit off. They let you buy the car but then if its got no history they won't take it off you - having paid 50%. I don't know what history the car had when she bought it.

Its with Black Horse Finance anyway. The car was 10K and shes had it about 2 years. I've told her to speak the Black Horse and ask them what they will do if she just stops paying and/or whether they'll take credit card payments. She has a couple of cards which she can max to 8K but I think her rating is going down the pan as hubby has buggered off back to NZ and left her with all the debts.

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Old 7th Sep 2009, 10:06   #7
[TW]Fox
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Really?

That seems a bit off.
Well not really, otherwise people would trash cars, not bother to service them, crash them into things then leave it with the finance company having paid only 50%. The car must be in a condition that the reasonable man would consider fair wear and tear and must have been serviced in accordance with manufacturers service schedules, though only at a VAT registered garage not a main dealer.

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Old 7th Sep 2009, 10:24   #8
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Well not really,
What I mean is that the car should have all those details in the first place. If the finance company demands those documents if you stop paying they should demand them when you purchase the car.

If thats not the case, then I guess its the finance company saying more fool you for buying a car with no history?

There is a stamped service book although the last one is missing but there isn't any invoices for anything.

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Old 7th Sep 2009, 10:25   #9
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There is a stamped service book although the last one is missing but there isn't any invoices for anything.
So it does have service history then? It's just missed the last service?

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Old 7th Sep 2009, 10:29   #10
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Quote:
Originally Posted by EddScott View Post
What I mean is that the car should have all those details in the first place. If the finance company demands those documents if you stop paying they should demand them when you purchase the car.

If thats not the case, then I guess its the finance company saying more fool you for buying a car with no history?

There is a stamped service book although the last one is missing but there isn't any invoices for anything.
Stamped book is the service history, doesn't matter about the invoices I would have thought, as those are invoices to you personally not the car. Although people use them as proof of work carried out, a stamp in the book means a garage has serviced the car according the manufacturers guidelines and put their name to it. I wouldn't worry about invoices as such.

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Old 7th Sep 2009, 10:38   #11
EddScott
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Personally I work the other way. Lots of invoices and receipts are more important to me than a stamped service book. I'm sure she showed me the service book and the last one or two are missing.

Stamps don't tell you what has been done to the car whereas invoices do - guidelines or not. IMHO anway.

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Old 7th Sep 2009, 10:44   #12
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Quote:
Originally Posted by EddScott View Post
Personally I work the other way. Lots of invoices and receipts are more important to me than a stamped service book. I'm sure she showed me the service book and the last one or two are missing.

Stamps don't tell you what has been done to the car whereas invoices do - guidelines or not. IMHO anway.
Oh of course. I keep all my invoices in case I would sell privately, but with regards to this situation I wouldn't be worried about invoices as such. I never recieved any from Honda when I bought my car but it was only ever serviced at the dealer I bought it from and stamped accordingly. All work from those dates was detailed on their computer.

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