thunderace
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| posted on 20/2/09 at 12:11 PM |
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can you buy a new car pay 3/4 and hand it back.
the lates thing is buying a new one on finance and handing it back onece you have paid 3/4 of the car its a legal thing.
a taxi driver mate told me about this.
im sure someone on here will know how it works.
is this true and how dose it work.
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DanP
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| posted on 20/2/09 at 12:18 PM |
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I believe if you buy a car on HP as opposed to credit then after you have paid half of the installments you can just hand it back because it is not
yours till you pay the last payment. On credit you own it instantly but just owe ford etc X pounds.
Cheers
Dan
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Hellfire
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| posted on 20/2/09 at 12:18 PM |
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So let me get this right. You buy a car for lets say £20K on finance. After you've paid £15K, you then give them the car back??
They now have £15K of your money and your car whereas you have no car and are £15K worse off. Where's the logic in that??
Phil
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phoenix70
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| posted on 20/2/09 at 12:28 PM |
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Hi
I believe as previously mentioned, on an HP agreement you can hand it back, also some places are offering lease agreement over three years where after
three years you get to buy the remainder of the car, or just hand it back.
In either case, you will get no money back so you will be out of pocket
Also some HP agreements have various clauses that limit your use of the vehicle, so if you do hand it back there is still value in the vehicle
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livelee
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| posted on 20/2/09 at 12:38 PM |
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quote:
Where's the logic in that??
Phil
If the car's only worth 4k then you're 1k up.
If you get a good deal you can actually pay back less than the amout the car is depreciating. Also you can keep your £20k in the bank / ISA and earn
internest on it so you win that way as well.
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nick205
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| posted on 20/2/09 at 12:40 PM |
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Buy an old car and don't get embroiled in all the credit and finance malarky 
Have you looked at what you can get these days for next to nothing?
McLanahan on here was selling a 6 year old fully loaded Passat TDI 130 for something like £3200 IIRC. That's a big chunk of car for very little
money.
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Mr Whippy
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| posted on 20/2/09 at 12:44 PM |
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?
don't think I'll ever understand this kind of thing, I'm very happy with my car that cost a few hundred and having driven some new
ones including my dads Avensis I still think mines nicer 
Fame is when your old car is plastered all over the internet
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whitestu
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| posted on 20/2/09 at 12:48 PM |
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quote:
Have you looked at what you can get these days for next to nothing?
Couldn't agree more! There are so many great cars out there for next to nowt these days.
Stu
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scootz
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| posted on 20/2/09 at 12:51 PM |
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It's 50%*
*Or was the last time I looked into it!
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smart51
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| posted on 20/2/09 at 12:58 PM |
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A ford dealer told me (in the mid 90s)about their "baloon" payment scheme. You paid a 10% deposit, paid about 50% of the new price of the
car over 2 years then either handed the car back or paid the remaining 40% to keep it. Several of his customers bought XR4x4 and Sierra Cosworths on
the scheme. Part way through, their insurance bills went up to £20k or more because of boy racers, so the market value of the cars dropped to about
10% of the new price as no-one could afford to insure them. On the 1st of August when the cars were 2 years old, all the owners dropped the keys at
his dealership and walked away. The dealer was stuck with the loss.
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stevebubs
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| posted on 20/2/09 at 01:20 PM |
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Read you credit agreement - it will detail such arrangements there....
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donut
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| posted on 20/2/09 at 01:22 PM |
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Surely it's cheaper to do what we used to years and years ago and thats to 'Save up' remember that!?!?!?
Andy
When I die, I want to go peacefully like my Grandfather did, in his sleep -- not screaming, like the passengers in his car.
http://www.flickr.com/photos/andywest1/
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mookaloid
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| posted on 20/2/09 at 01:29 PM |
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Consumer Credit Act 1974 provides for: if you have paid 50% of the total amount payable for the car then you can hand it back.
Put very simply, this would mean that if you bought say a £10K car over 5 years with no deposit and after 2.5 years you worked out that it was
actually only worth £3K then you could hand it back and not be in negative equity with it. The next bit is open to interpretation, but the consumer
should have taken reasonable care of the goods.
If you bought the same £10K car with a £4K deposit and handed it back when you had paid 50% (i.e. £4K deposit and £1k worth of payments) then it is
possible that it wouldn't be such a good idea. You would probably be better off trading it as you would be likely to have some equity in the
vehicle.
HTH
Cheers
mark
"That thing you're thinking - it wont be that."
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mookaloid
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| posted on 20/2/09 at 01:30 PM |
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quote:
Originally posted by smart51
A ford dealer told me (in the mid 90s)about their "baloon" payment scheme. You paid a 10% deposit, paid about 50% of the new price of the
car over 2 years then either handed the car back or paid the remaining 40% to keep it. Several of his customers bought XR4x4 and Sierra Cosworths on
the scheme. Part way through, their insurance bills went up to £20k or more because of boy racers, so the market value of the cars dropped to about
10% of the new price as no-one could afford to insure them. On the 1st of August when the cars were 2 years old, all the owners dropped the keys at
his dealership and walked away. The dealer was stuck with the loss.
Actually (being picky) it would have been the finance company which had the loss.
"That thing you're thinking - it wont be that."
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mookaloid
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| posted on 20/2/09 at 01:32 PM |
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quote:
Originally posted by stevebubs
Read you credit agreement - it will detail such arrangements there....
If it is an agreement regulated by the consumer credit act 1974..
This does not apply to vehicles above £25K or to purchases by limited companies.
"That thing you're thinking - it wont be that."
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chrism
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| posted on 20/2/09 at 02:10 PM |
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IIRC I dont think that the deposit counts into the agreement, I would have to check but have always noticed it on the finance agreements for my last 3
cars, where you can after paying so much hand it back, but I think it was a percentage of the finance amount and not the vehicle amount.
But you can also if trading in a car that has finance on it pay off a reduced sum as you pay less interest, there is a calculation I saw somewhere
where you put all your details in about payment size number of pyaments, etc. and it would work out how much you would have to pay to finish early.
----------------------------
A little hard work never killed anyone, but why take the risk!
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zilspeed
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| posted on 20/2/09 at 05:00 PM |
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I'm doing it just now.
As stated above.
In short, pay 50% and under section 99 of the Consumer credit Act 99, you are entitled to voluntarily terminate the agreement and hand the goods back
with nothing more to pay.
If the vehicle is in positive equity, it makes no sense at all.
If the vehicle is in negative equity, it makes all the sense in the world.
Most importantly, as it is part of the agreement and you are not breaking the agreement, it does not adversely affect your credit rating.
My new car is a free one which cost a fiver to fix for the MOT.
Happy days - no more car payments and it does 100 miles on a tenner of 4 star.
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Meeerrrk
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| posted on 20/2/09 at 05:35 PM |
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its true, and its half way through the term, as mentioned above.
a friend of mine did it, bought (on HP) a Leon cupra R but toward the end of last year couldnt really afford the payments and fuel he was doing, so he
waited till it was 50% and just handed it back. He had to pay them £250 because the car had a few scratches (someone keyed their intials in the rear
door!) but apart from that, he washed his hands of it.
think of it as a hire car really, but you dont have the advantage of having the servicing/maintenance paid for!
For Sale : 2008 Aries/Stuart Taylor Motorsport Locoblade (954 Blade)
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Meeerrrk
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| posted on 20/2/09 at 05:38 PM |
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quote:
Originally posted by donut
Surely it's cheaper to do what we used to years and years ago and thats to 'Save up' remember that!?!?!?
couldnt agree more
For Sale : 2008 Aries/Stuart Taylor Motorsport Locoblade (954 Blade)
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zilspeed
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| posted on 20/2/09 at 05:41 PM |
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quote:
Originally posted by Meeerrrk
quote:
Originally posted by donut
Surely it's cheaper to do what we used to years and years ago and thats to 'Save up' remember that!?!?!?
couldnt agree more
Yes indeed, or just buy / acquire a nail and just run it.
I've learnt my lesson.
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Antnicuk
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| posted on 20/2/09 at 05:50 PM |
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i prefer to just not lose any money on the car or as little as possible.
If you look carefully for the right car, you can even make money
I bought a stunning 540 BMW for £6k did 30k miles over 2 years and sold it for £5100
My current car is an M3 which i paid 4k for with low mileage, I reckon I could get that for it now.
I bought a Blackbird for £1900, used it for a year and sold it for £2300
My best yet is a Back Jag XJr V8 S/C which was a barn find at £1200, spent 2 weeks cleaning and servicing it and sold it for £4k.
I couldnt think of anything worse than paying £200 + a month for a car and after 3-4 years have absolutely nothing to show for it
600 BHP per ton, Stylus Brought back from the dead! Turbo Rotary Powered!
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Memphis Twin
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| posted on 20/2/09 at 05:55 PM |
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quote:
Originally posted by Mr Whippy
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don't think I'll ever understand this kind of thing, I'm very happy with my car that cost a few hundred and having driven some new
ones including my dads Avensis I still think mines nicer
Yes, nice car. But what the f**k is it?!
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