Downsizing when 6 months into a 4 year PCP

m1stergeorge

Hi all,

So things have happened in life..  The very condensed version is that my marriage has ended, I've moved out on my own and need to bring payments down across the board pretty much asap.

When I took out the PCP (on a brand new vehicle), there was no indication that my life would change and was perfectly happy with my payments and that I'd even hang onto the car to the end of the term.  Sadly, this isn't the case.

I'm with Audi Finance and need to get the payments down by any means possible.  I won't lie, I'm paying £430 per month and have no complaint in downsizing the vehicle considerably to bring down the monthly payments.  I spoke to the Salesperson at my local dealership and he said that theres no point in doing anything for about a year as he couldn't assist in any way.  The problem is.. I don't think I have a year.  By the time that comes, theres a real chance I will struggle to make the payments regardless between now and then.

Can anyone offer any advice?  My apologies for the semi-garbled post etc.. things are (as you can imagine), just a world of weird/crazy/lonely/insert term here.

rousetafarian

Hi

Could I suggest that you could either sell the car to settle the outstanding finance (and ensure it’s paid directly to the finance company) or work out what 50% of the total amount minus the deposit but with interest is and continue paying the direct debit or get a loan to cover that same amount and look at the voluntary termination position and hand the car back.

Mostly the dealership and finance companies are entirely unsympathetic in my view.

Sorry to hear of your plight!

rousetafarian

I was 33 months into a 48 month term by the time I could hand the car back by my calculations and that was with a £500.00 is minimal deposit, sorry.

m1stergeorge

Thanks rousetafarian, I'll see what I can do on that score.  Admittedly, what doesn't help (and what I probably should have also mentioned), is that my credit record is a bit of a shocker so a Loan is out the window currently.  I won't lie, life has turned into a hugely bad state of affairs right now.

m1stergeorge

Thank you, Audi Finance do have a part on their site relating to if payments are starting to get too difficult.. I could give them a call and at least see if they are open to something.  Realistically, if they aren't, then payments will very likely start to be defaulted upon in the next 6-8 months either way.

Bl4ckGryph0n

First point of call is to talk to the finance company, not the dealership. If you know in advance that you may have difficulties it is much better when those get managed opposed to simply defaulting.

I can’t see/understand what the sales person has got to do with this. On finance the contract is not with them, and most likely not even trained other than the 'business manager' to sell finance.

Selling it is the other alternative, but six months in it is unlikely going to raise more then the settlement figure is unless it is a rare and high spec vehicle with a long waiting list. So whilst you may get out, you’ll still have a loss.

It sounds a bad situation, I’m sorry to hear that. But remember you can’t pluck a bold chicken (A Dutch saying by my grandmother). And bad news doesn’t age well. Make the fall to the bottom as quick as you can, you can then be back in a place that you can deal with positives again and build it up how you want it to be.

Best of luck in these tough times.

mjn

If your credit rating is bad now, don’t default on the PCP, otherwise you’ll struggle to get any form of credit!

As others have said, speak with the finance company.

m1stergeorge

Thanks all, i think thats the route I'll be taking imminently.  As an idea, the settlement on the PCP is about £4k more than what I could probably sell it for.

ChuckMountain

That is one of the issues with pcp that for quite a lot of the contract you be in negative equity and so it will cost you a lot to get out of it.

At the point when you get to have paid 50% of total credit agreement you can voluntary terminate it which is good but that is usually around 3/4 of the way through because of the balloon payment at the end.

At the moment I was looking at my options on my Audi.  I can VT it next Jan when I hit the 50%.  However at the moment is on negative equity to the tune of about 10 months payments going on we buy any valuation.  So if I hand it back now, I would owe the same money as I would to keep it till VT. I could get a better price than we buy but it's not going to be that much better.

Let us know how you get on with Audi finance

its_all_Greek

is something like a consolidation loan a viable option once you know the final figures and combine all your debt etc into something more manageable?