Handing a car back on finance ? how does it work ?

[phib]

We have a family member who has a car on finance.

25k car 5k deposit and 21.8k finance including fees. (car value now £18k)

She's told once she's over 50% paid up she can hand the car back.

How does this work as I cant see any benefit to doing this but am probably missing something.

i.e. she would loose her £5k deposit and £10k she's paid, so assuming the cars value is more than 10k its not worth doing, she's better off selling ?

Confused

[Wooda80]

From your description it reads like the total amount payable ( including the deposit ) is £26800 and she has already repaid more than half of this?

If that is the case then

1) Get a a settlement figure from the finance company ( that's a statement of how much you need to pay to fully pay off the agreement today )
2) Get a valuation on the car ( maybe from Webuyanycar or the garage where she bought it from.

If the valuation is more than the settlement figure then it would be better to sell the car and pocket the equity. If the valuation is less than the settlement then it would be better to return the car to finance company.