Hi guys, I have a 2005 volvo s60 2.0t that I'm trying to get out of. I'm very backwards on the finance..owe 6k, car worth 2800.

The garages I've been to say that the balance could be put onto the new car but it's quite high so the finance cos are unlikely to accept.

Surely though there isn't a lot going on if they are creative..I.e new car is 7k, they give me 2.8k for mine, leaving 3200 remaining. The 2.8k comes off the new car and the 3.2k goes on making it just over 7k?? If they just told the finance co that the car was just over 7k to begin with and didn't mention the part ex etc?

Or am I stuck?

The 2.8k part ex wouldn't come off the new car...

You would actually be paying 10.2k for the new car (7 + 3.2k neg eq).

The 2.8 they give part ex would go to pay off your current finance.

Damo

What was the term on the loan if you owe so much more than the car's worth? Sure, it happens with brand-new cars (GAP) but it shouldn't be so bad with a 5YO one!

I hope I've got it wrong, but it sounds to me like the reason you're in your position is exactly what you're trying to get yourself back into! If I understand you correctly, you're suggesting you effectively give your current car to the dealer, and they reorganise the finance so that it's as if you're buying your new car at a premium with nothing to put down against it?

[edit] In that case, it depends whether the finance was secured against the car or not, as above... [/edit]

how about dont get finance if you cant afford it.

sell car + buy cheap £200 runaround +payoff what you owe = start again once finance is clear

lesson learnt = live within your means

Well, yeah, there's always that!

Sorry Chris but your calculations don't add up :S

You are looking to buy a car worth £7,000

You currently still owe £6,000

You have a vehicle worth £2,800

The dealer would deduct the £2,800 part-ex value from your outstanding debt leaving you £3,200 still owing to the finance company.

This would then be added to the price of the new vehicle leaving you paying £10,200 for a £7,000 car - in other words in the same situation than you currently are!! As you have said yourself the finance companies are unlikely to accept your application and if they do the interest rate is likely to be astronomical!!

As others have said your best 2 options are:-

1) Keep your current vehicle until you have paid off the outstanding debt.

2) Sell your current vehicle and buy a very cheap run-around and make an overpayment on your current debt - therefore leaving you with less to pay off.

Edited 19 October, 201015 yr by Jono76

Yeah my mistake!! Lol. Finance isn't the problem! It's the 27mpg

Is it HPI?

Could you hand it back to the finance company?

Yeah, it is hp so I will have to wait for another 16 payments until I get halfway through the agreement.

Thanks for your help guys.

I may be wrong but if you owe the finance company 7k you wont be able to sell the volvo as you dont own it,they do! if anybody does a check on the volvo it will come back as on finance. you would have to clear the finance on the car before you sell it.

Sounds like making up to the half payments and looking at your options is the only sensible way to do this.

1) Keep your current vehicle until you have paid off the outstanding debt.

2) Sell your current vehicle and buy a very cheap run-around and make an overpayment on your current debt - therefore leaving you with less to pay off.

This is really your choice (plus consider finance hand back when you're eligible howvever check out the other implications of this regarding your credit rating).

Other option may be to talk to the finance co and see if you can re-finance the existing car (pay more, clear the debt sooner?)

I was in negative equity with a car a few years back - i chose just to stick with it and enjoy the car - keep paying and you'll eventually get back in the black. Your rate of depreciation slows eventually and your o/s balance reduces as you continue to make the payments. For me, it was a lesson learned - I don't buy cars on finance any more.

HTH.

I bought this as i needed out of the Vectra 1.9 CDTI 150bhp I had as it was nothing but trouble. I wanted an S60 and decided the 2.0T was for me...impulse. 10 months later and I'm feeling every penny of the 27mpg i'm getting even with a gentle right foot, plant it and I'm looking at low 20's...

Lesson learnt...don't impulse buy a car...

Whatever you do don't roll up your current negative equity into a new car and a new finance agreement - it doesn't solve the problem - in fact it just stores up a much bigger problem for the future IMO.

Why is your car only worth £2800?

Glass's is giving you the following:

Volvo S60 T Sport

2.0 Petrol 4-door Saloon

5 Speed Manual Front Wheel Drive

Year: 2005 05

Mileage: 80,000

Part-exchange Price:

Excellent condition:

£3540

Average condition:

£3190

Below average condition:

£2840

Thats with 80k as an estimate.

I would sell it private for whatever they are going for, then get a personal loan for the difference of what you get for it. ie if you get £4k for it get a loan for £2k to pay off the finance.... Or get a bigger loan say £8-10k (and a lot lower interest rate) and then you will have £6-8k to get a decent car

Final tip is to never have HP on a car - always get a loan if you need finance. HP is often a rip off with inflated and fudged figures to make it seem attractive especially when they say the interest rate is 4% but that isn't the APR - The APR is usually at least 12-15% whereas you can get a loan for around 8%.

Hope this helps.