Hand it back. E46

[jonny996]

Here is the deal, I have a clause in my HP that states if I have paid X% of payments then I am intitaled to just hand it back if I want.

Does this affect your credit rateing?

Car is a Sep 2002/52 E46 325i Sport Saloon, Imola with Alcantara, 25000 miles & 3 owners with service history, good contation with 4 good tyres.
My finance balance is £8100, so is it better for me just to hand it back with zero equity & go and look out a cheap deal with the market being what it is just now.

[stockhatcher]

there's no credit rating penalty to hand the car back, it sounds like a straight finance and ballon payment deal. Bonus of handing it back early apart from doc fees, is that you don't pay all the interest on the outstanding amount, - as you are paying it back.

however i do not think your car is worth £8100, so either the finance co will take a bath on it, or they find a way to make you pay for it. which again means that if you can; get rid. if you paid that amount to own the car outright you'd effectively put about £1500 down the pan, as I think its worth about £6500

[pgilc1]

I think the clause reads that if you have paid 50% of the total amount due on the loan then you can hand the car back.

I've done it before, with no come back. In fact the finance company actually wrote to me afterwards to say to keep them in mind when i next needed finance.

[gizlaroc]

As long as you have paid 50% of the purchase price and any charges (such as interest) you are entitled to hand it back.

Right now I would definitely do that if you fancy a change.

[BMWBen]

stockhatcher said:

there's no credit rating penalty to hand the car back, it sounds like a straight finance and ballon payment deal. Bonus of handing it back early apart from doc fees, is that you don't pay all the interest on the outstanding amount, - as you are paying it back.

however i do not think your car is worth £8100, so either the finance co will take a bath on it, or they find a way to make you pay for it. which again means that if you can; get rid. if you paid that amount to own the car outright you'd effectively put about £1500 down the pan, as I think its worth about £6500

Are you sure? I'd have said at least £7500 and maybe £8k having looked at the market. But then I'm not a car dealer!

Unless what you're saying is that the 100's of e46s with higher mileage advertised on PH for about that amount are pissing in the wind?

[CypherP]

BMWBen said:

stockhatcher said:

there's no credit rating penalty to hand the car back, it sounds like a straight finance and ballon payment deal. Bonus of handing it back early apart from doc fees, is that you don't pay all the interest on the outstanding amount, - as you are paying it back.

however i do not think your car is worth £8100, so either the finance co will take a bath on it, or they find a way to make you pay for it. which again means that if you can; get rid. if you paid that amount to own the car outright you'd effectively put about £1500 down the pan, as I think its worth about £6500

Are you sure? I'd have said at least £7500 and maybe £8k having looked at the market. But then I'm not a car dealer!

Unless what you're saying is that the 100's of e46s with higher mileage advertised on PH for about that amount are pissing in the wind?

I'd probably agree with you there. Can't see a 2002/52 with 25k miles being valued at £6500?

I have a 52 plate 325ci M sport with 85k miles and i'd say mine is probably worth about £6000 with all the extras it has. I'd say yours is worth at least £7500...

[gizlaroc]

There are 52 plate sub 40k mile 325i sports on autotrader for around the £7k mark.

That is asking price. Probably sell for £6-6500, maybe less.


So would you hand the keys back on your car and walk away or would you go through all the hassle of trying to sell it just to pay the fiannce house £8100???

Throw the keys back!

[bennno]

pgilc1 said:

I think the clause reads that if you have paid 50% of the total amount due on the loan then you can hand the car back.

I've done it before, with no come back. In fact the finance company actually wrote to me afterwards to say to keep them in mind when i next needed finance.

correct answer, key though is 50% of all charges under the agreement - not 50% of the initial purchase price

bennno

[pgilc1]

bennno said:

pgilc1 said:

I think the clause reads that if you have paid 50% of the total amount due on the loan then you can hand the car back.

I've done it before, with no come back. In fact the finance company actually wrote to me afterwards to say to keep them in mind when i next needed finance.

correct answer, key though is 50% of all charges under the agreement - not 50% of the initial purchase price

bennno

Yes, i meant total amount being total amount including charges and interest. It should be clearly written on the loan agreement anyway.

[Luvmyzed]

You are quite correct when you wonder if the finance company "takes a bath" when folk hand back cars once they have paid 50% of the total amount payable. They certainly do, even though the consumer is perfectly within their rights to hand it back. It usually amounts to several thousand pounds per vehicle, especially as finance co's send stuff straight to the auctions and get what they can for them.It was designed to prevent consumers from being ripped off at point of sale , and is a very good protection tool too, though more and more finance co's are looking at the potential VT ( voluntary termination) positions when they complete the original underwriting and impose deposit condidions on some deals.

[gizlaroc]

Luvmyzed said:

You are quite correct when you wonder if the finance company "takes a bath" when folk hand back cars once they have paid 50% of the total amount payable. They certainly do.......

I disagree.


I bet if the OP posts the figures for the agreement you will see he has more than covered the eventuality that the car maybe returned at the 50% point.

You usually find that the interest rate is high enough to cover this happening, it is when they pass the point where they have paid 50% and they are not handing it back that they start to rub their hands together.

[jonny996]

I will dig out figures tonight, but as the car only costs me £150 Pm and has been running like a dream I may be keeping it

[BMWBen]

jonny996 said:

I will dig out figures tonight, but as the car only costs me £150 Pm and has been running like a dream I may be keeping it

Where on earth did you get a deal like that?? I'd like one too please!