Car Finance Terms
- Thread starter Melon
- Start date
You can't normally (IIRC) up the payments, but you can pay off a lump sum and reduce the number of monthly installments.
So rather than pay more now, you could save the extra you're willing to pay and when you have enough to pay off the remainder you can get out early.
But, as already stated this would depend on your contract, so it's best to speak to the lender.
Is it HP or a PCP?
So rather than pay more now, you could save the extra you're willing to pay and when you have enough to pay off the remainder you can get out early.
But, as already stated this would depend on your contract, so it's best to speak to the lender.
Is it HP or a PCP?
Was the original agreement 3 years or 5? And was it Hire Purchase (Total value of car / xx months) or a PCP (Where you have £xxxx to pay at the end of the agreement)?
Also, was the car new when you bought it, or 2nd hand?
Also, was the car new when you bought it, or 2nd hand?
There is a final payment which is more than the monthly payments and it was for 3 1/2 years finance.
I fell stupid because I knew I would have to keep the car for 3 1/2 years but now I am fed up with ti after just a year.
I fell stupid because I knew I would have to keep the car for 3 1/2 years but now I am fed up with ti after just a year.
Melon said:
The final payment is normally more then the monthly payment as this allows them to secure the loan on car. Normally HP has say 48 monthly payments of £200, then a final payment of £285.99 and this allows them to maintain an interest in the car. This is what mine is anyhow.
I'm not sure if you can pay into the scheme. Normally it's decided on time of purchase, and you can -
1. Pay all payments on due date, with final optional purchase fee to then own. On HP it's normally a final document fee, PCP what is known as a balloon payment
2. After half payments made, hand the car back, and either take another agreement of walk away
3. Pay off with other means if payment, such as bank loan or you have the cash. Normally they charge for this.
As a rule, only purchase a car on HP if you intend to keep the car for at least half the term, or the whole term. Changing a car on HP after just one year isn't a good idea. Unless you can pay off the HP and sell private..
I'm in the same boat, or I was. I wanted to change my car from a boot to a hatchback. Decided against this in the end.. Just not worth the hassle..
I have my car on a 4 year finance plan and I have just applied for a loan with my bank to pay it off because the interest is INSANE! It's 28.8%, and that's with Welcome Car Finance. My bank are quoting me an interest rate of 8% over 3 years with is cheaper!!!
Get a loan and pay it off, then maybe go to a dealership and get one with 0% finance because they will see on your credit record that you paid the car loan off and you will have a better overall score as getting a car on finance is second to getting a mortgage!
Hope this helps.
Get a loan and pay it off, then maybe go to a dealership and get one with 0% finance because they will see on your credit record that you paid the car loan off and you will have a better overall score as getting a car on finance is second to getting a mortgage!
Hope this helps.
Walliam said:I have my car on a 4 year finance plan and I have just applied for a loan with my bank to pay it off because the interest is INSANE! It's 28.8%, and that's with Welcome Car Finance. My bank are quoting me an interest rate of 8% over 3 years with is cheaper!!!
Get a loan and pay it off, then maybe go to a dealership and get one with 0% finance because they will see on your credit record that you paid the car loan off and you will have a better overall score as getting a car on finance is second to getting a mortgage!
Hope this helps.
28.8%... Woah..!!! I've got mine with Honda and it's 7.2% over 48 monthly payments. And yes it's two months interest to settle early with HP.
A bank loan is better though, as with a loan the car is not listed on HPi as on credit, whereas with HP they do secure the loan on the car. The only advantage with HP is that if the loan ends up being more then the cars worth, after half payments you can hand it back and walk away.
With a bank loan if this happens you have to take it on the chin.. Swings and round a bouts really...
Personally, when I took mine I planned on keeping the car for 4 years, but did think about it a few weeks ago as circumstances had changed.. But it all worked out in the end, and I shall now keep my car until the remaining payments are made...
One thing though - Do not, and DO NOT buy the payment insurance schemes... These are daylight robbery..!!
After speaking to you guys I am going to take a Bank Loan to pay off the loan and then change the car from there.
I am only doing all this as my gf has just had my Baby two weeks ago and this car isnt really suitable as a family car. There is no boot space or anything.
Many Thanks for the Advice guys.
I am only doing all this as my gf has just had my Baby two weeks ago and this car isnt really suitable as a family car. There is no boot space or anything.
Many Thanks for the Advice guys.
Melon said:
Thats not a bad option, in some ways it could be your only one if you need to get rid of the car. I'd reccomend Nationwide for a loan, I've just gone through them and they were really helpful. But definately speak to the lender, they may be able to give you a lower buy out figure if nothing else (especially if you use the added family member to your advantage
).Good luck with at anyhow, I'm doing pretty much the same thing atm albeit for a different reason.