How can I get out of an expensive contract purchase agreement on a vehicle that is now in negative equity?

Question

the reason I am asking this question is that the car company have considerably reduced the new price on this vehicle ( mine is 18 months old ) so the trade in value has dropped accordingly - I am not trying to avoid my responsibility ( as one reply indicates - he has plenty to say in judgement - it must be good to be so perfect) neither am I looking to weasel out ( as another poor reply is suggesting ) - I am looking for a solution applicable to UK law - thanks

Answer 1

Wow who would have thunk it. A car in an upside down loan situation...happens every day (yawn) As long as you buy a car, you lose money on the deal the moment you take ownership, the value goes down...unless its a collectors item of some sort. Other wise most all cars lose value. That's why they are not true assets. You pump them full of gas, insure them, maintain them, and the resale value drops with all the gentel glide characteristics of a free falling safe.

So lets say you find a way out of this. What is your next step? how are you going to do this again and not have the same problem? how do you get a car and not be upside down on your loan? Unless you have a pot load of cash, how do you avoid this in the future?

Unless you can make much larger payments on the car you will always be upside down in the loan very early on and remain there for the life of the loan.

If you can only afford the car if you make smaller payments over longer periods of time, this will be the case with every car you buy. Every single time.

Your other option is to come up with a really big down payment. I mean really big. LIke 50% of the purchase value big.

So again I ask you, if you manage to weasle out of this without taking a hit on your credit (like thats really gonna happen) how do you avoid it in the futur?

My ex is still paying for a car that is sitting in a field with weeds growing up around it. Because the car is not yet paid for she is still paying full coverage on her insurance. Its broke down and she can not afford to repare it. So she is strapped for cash and still making payments. She got in trouble with the court so the judge watches to insure that she maintains insurance. Even though the only place that car will ever go is behind a tow truck to a junk yard. The weeds are about half way up the windows now. Another month and they will be taller than the car.

If you fail to pay this off you may find your self with a big ding in your credit report so your next car is going to cost you more interest making it harder to pay it down. Not a smooth move.

Answer 2

Let's see if I understand this right:

You bought an expensive car or truck, financed it for probably a long time - maybe 5 or 6 years, right? You're paying and paying, but now the vehicle is worth less than what you owe.

If that's so, you have two options: suck it up, be an adult, and keep paying as you promised to do when you bought the vehicle. Then learn your lesson, as you couldn't afford this car in the first place.

Sell the car, use the proceeds to pay off as much of the loan as possible, and come up with the extra money somewhere to pay off the rest of the loan. Then learn your lesson, as you couldn't afford this car in the first place.

Answer 3

In the UK under the consumer credit act, If you have a hire purchase agreement you can terminate the agreement if you have paid more than 2/3rds of the original balance or a figure which should be at the bottom of the HP agreement form you signed. This is called a volountary surrender.

Or you could contact your lender and tell them your problem and see if they can come to some agreement.

Answer 4

You can't. a new car is always in negative Equity, as you drive out the showroom you lose 10%. If you traded your car in for a new one now though you would get that new car at a reduced price too. Its like buying a bottle of wine on Saturday night and Sunday it goes on offer, you bought and agreed that price and can't change that

Answer 5

there is no way out of this.

however if i remeber the law correctly you have to legally insure a HP car fully comp to cover the HP company should you right it off. So if you, god forbid, had an accident they would be paid off and you would be clear of the debt. I suspect this would also be true if it was stolen. of course taking it to the roughest neighbourhood you know and leaving the keys in the ignition would invalidate your insurance, so your probably stuck with it or the debt. sorry

Answer 6

Never buy a brand new car as soon as you drive it out of the garage it has lost money.go for a 1 or 2 year old

Answer 7

sell it or trade in for another car

Answer 8

try these offshore links

http://www.lofinance.blogspot.com