car finance

opstrat · 11 Jul 2012 at 16:58

hello.

looking for some advice.

i have a car from arnold clark and the finance is supplied from barclays partner finance. i have a bout a year and a jalf left to pay on the car.

im looking to change this weekend. was talking to my dad the other night about this and he says "you know you dont have to arnold clark to get a new car". i wasnt convinced about this so wonderd what if anyone else knows about this.

can i go to another garage and continue finance or will i have to go back to arnold clark?

cheers

brightside229 · 11 Jul 2012 at 17:06

When you take the car to the new garage they will see it has outstanding finance, they will offer you an amount for your car and then use that to pay off what is owed and give you the rest.

example, you owe £3000, They offer you £3500. You end up with £500 towards your other car, it can go the other way and you can end up owing them money for the car if what is left on finance is more then the cars worth. E.g They offer you £3000, Finance Remaining is £4000, They will add £1000 to the total price of new car you buy from them.

So no you can go to any garage you want.

opstrat · 11 Jul 2012 at 17:15

right, thats what happend when i got my latest car, from arnold clark.

so i can go to any garage and do this. cheers for that

[TW]Fox · 11 Jul 2012 at 17:57

You don't need to go to Arnold Clark, no. But with existing finance no the vehicle you may well find dealers offer you poor deals because you have little choice but to buy from a dealer who can sort your finance out as part of the deal.

Tell us what the car is (and age/mileage), what the terms of the deal are, what you owe and we should be able to work out a decent way forward for you.

AndrewNR · 11 Jul 2012 at 18:10

How much is the car worth?
How much is the outstanding finance?
WHat is the new car you're looking to buy/finance?

Better English would also help.

[TW]Fox · 11 Jul 2012 at 18:15

AndrewNR said:
Better English would also help.

Oh come off it, it's not like that guy with the 318i thread who couldn't be arsed not to type like an illiterate chav, he's just spelt a few things wrong and not capitalised. We can still offer him advice!

Kennysevenfold · 11 Jul 2012 at 18:16

AndrewNR said:
WHat is the new car you're looking to buy/finance?

Better english please.

To op, As stated, what are the details of your current car and the one you are looking to buy?

AndrewNR · 11 Jul 2012 at 18:22

Kennysevenfold said:
Better english please.

To op, As stated, what are the details of your current car and the one you are looking to buy?

Touché, but there is a difference in holding shift down for a bit too long and constructing a readable post.

I wasn't trying to bash the guy's English like a Nazi, I just felt he needed to put more effort into his post overall, now we've got 3-4 people asking him for the same key information to help him out.

opstrat · 11 Jul 2012 at 18:24

ok mate.

its a ford fiesta 1.4 tdci studio 56 plate. 63000 miles.

the finance details are:

£5656.26 left @ £169.46 per month. actually got a lot longer than i thaught left to pay. roughly 2 years left.

interest rate is 13.8% per year.

looking at a couple of 08 plate focus about the £7500 price.

[TW]Fox · 11 Jul 2012 at 18:26

How long is the agreement in total? Your car is worth less money than you owe, so therefore the most financially prudent thing to do would be whats called a voluntary termination where you hand back the car and the agreement is nulllified. You can do this if you are more than half way through. It won't affect your credit rating (But that particular car finance company might not be in such a rush to offer you finance again).

Your previous deal wsa poor, you are paying quite a lot of interest on a car that isn't particularly residually strong and you must have had quite a low deposit and/or paid more for the car than it was worth. This has conspired to put you in a position where you owe more than the value of the car. It would be very prudent to try and avoid doing this again.

AndrewNR · 11 Jul 2012 at 18:26

opstrat said:
hello.

looking for some advice.

i have a car from arnold clark and the finance is supplied from barclays partner finance. i have a bout a year and a jalf left to pay on the car.

im looking to change this weekend. was talking to my dad the other night about this and he says "you know you dont have to arnold clark to get a new car". i wasnt convinced about this so wonderd what if anyone else knows about this.

can i go to another garage and continue finance or will i have to go back to arnold clark?

cheers

You have a few options in regards to selling your car:
1. Go to a dealer and get them to pay it off in your behalf and buy a car from them plus some cash from you (if upgrading), from them (if downgrading) or no cash.
2. Sell the car privately and explain that there is outstanding finance to the potential buyer and agree to pay it off when the buyer pays for your car.

[TW]Fox · 11 Jul 2012 at 18:28

double post

[TW]Fox · 11 Jul 2012 at 18:29

AndrewNR said:
2. Sell the car privately and explain that there is outstanding finance to the potential buyer and agree to pay it off when the buyer pays for your car.

It is not his car to sell privately, it belongs to the finance company. It's value is less than the outstanding finance therefore even if he did have permission to sell he'd need to find more money himself to clear the extra, which I'd imagine, judging by the car and the finance terms, he doesn't have kicking around.

All going to a dealer is going to do here is end up with them setting up a new finance agreement for the value of the car PLUS the value of his negative equity. bad bad bad bad!

If only your advice was as sharp as your grammar nazi skillz

opstrat · 11 Jul 2012 at 18:29

[TW]Fox;22324923 said:
How long is the agreement in total? Your car is worth less money than you owe, so therefore the most financially prudent thing to do would be whats called a voluntary termination where you hand back the car and the agreement is nulllified. You can do this if you are more than half way through. It won't affect your credit rating (But that particular car finance company might not be in such a rush to offer you finance again).

Your previous deal wsa poor, you are paying quite a lot of interest on a car that isn't particularly residually strong and you must have had quite a low deposit and/or paid more for the car than it was worth. This has conspired to put you in a position where you owe more than the value of the car. It would be very prudent to try and avoid doing this again.

The start of the finance was on the 18/01/10. for 60 months.

AndrewNR · 11 Jul 2012 at 18:30

opstrat said:
ok mate.

its a ford fiesta 1.4 tdci studio 56 plate. 63000 miles.

the finance details are:

£5656.26 left @ £169.46 per month. actually got a lot longer than i thaught left to pay. roughly 2 years left.

interest rate is 13.8% per year.

looking at a couple of 08 plate focus about the £7500 price.

A quick 30 second check on Autotrader suggests your car is worth £4k-£4.5k.

So assuming a trade-in price of 3.5k leaves 2k (finance) + 7.5k (car) = 9.5k to get your 08 Focus.

Just simple man maths; I'll let Fox improve my simple arithmetic.

Edited to add: I'm not going to go down the route of "save the cash and in 4 years buy it outright" nonsense, hopefully you're sensible enough to know how much you can spend per month on borrowing the money now rather than waiting.

AndrewNR · 11 Jul 2012 at 18:32

[TW]Fox;22324938 said:
It is not his car to sell privately, it belongs to the finance company. It's value is less than the outstanding finance therefore even if he did have permission to sell he'd need to find more money himself to clear the extra, which I'd imagine, judging by the car and the finance terms, he doesn't have kicking around.

All going to a dealer is going to do here is end up with them setting up a new finance agreement for the value of the car PLUS the value of his negative equity. bad bad bad bad!

If only your advice was as sharp as your grammar nazi skillz

I've only ever bought using a personal loan so wasn't aware of the pitfalls of having a financed car. My bad.

[TW]Fox · 11 Jul 2012 at 18:36

opstrat said:
The start of the finance was on the 18/01/10. for 60 months.

You are just coming up to half way. Look into a voluntary termination, your car is worth quite a lot less than you owe and any other solution is going to cost a lot of money for the reasons I've explained. A dealer will basically do this:

Amount you owe - trade value of your car = X

Screen price of Focus + X = Y

Finance = borrow Y over W months @ LOL% APR

So you'll basically have the same problem again - a huge loan on a very ordinary car that will simply depreciate to the stage where its worth loads less than you owe on it, meaning you refinance it again and take on even more debt for another fairly normal car.

Bad bad place to be.

Do you have any savings for a deposit? The best way to avoid these problems in the future is start from scratch (Which a VT can allow you to do) and put in a reasonable deposit. This keeps the amount you owe BELOW the value of the car.

If you can't afford to do this then it is my opinion that you can't really afford to buy cars of that value and should look for something cheaper. People make the mistake of thinking that if they can afford the monthly payments they can afford the car, this isn't always the case and what happens with these people is the debt snowballs as they end up constantly having to refinance it to get a new car taking on even more debt. Suddenly they owe bonkers amounts of money and are in a bad place.

opstrat · 11 Jul 2012 at 18:43

No savings for a deposit.

Do i just go to the garage and talk to them about the VT or do i contact Barclays?

thanks

jamief · 11 Jul 2012 at 19:01

opstrat said:
No savings for a deposit.

Do i just go to the garage and talk to them about the VT or do i contact Barclays?

thanks

You contact Barclays.

[TW]Fox · 11 Jul 2012 at 19:42

opstrat said:
No savings for a deposit.

Do i just go to the garage and talk to them about the VT or do i contact Barclays?

thanks

You contact barclays.

If you don't have any savings for a deposit either you should be really careful what you buy, from where and for how much. I certainly don't think financing £7500+ for a Focus is a good idea.

Can you not wait a few months and save up a bit of money for a deposit?

You'll just get bent over on a deal with no deposit as they'll know you'll take anything