right ok, i know nothing about the ins and outs of finance or how finance works on a vehicle.

The situation is i have a car on finance at the moment and have roughly 7500 left to pay. with monthly payments being 250. im trying to think of ways of either 1. getting out of the finance or 2. making the finance cheaper. I contacted British Credit Trust 10minutes ago as i thought i had a brainstorming idea!

My car has been valued by a showroom (ridiculous price) of £4000. so i thought if i part X'd the car for a car with a price tag of £3000 then it would be quite simple and strait forward that id have £1000 knocked off my outstanding finance and my payments would be reduced.

British Credit Trust began ranting on about it being too much of a shortfall to take across onto a new deal or something? i have no clue what so ever how these things work and barely know what shortfall and other jargon words mean.

She basically said NO!.

so how does these things work???? surely if i part X'd my car for a cheaper car id be reducing the amount oweing not increasing like she said......

Scott,

The big issue lies in that you must settle the existing finance and take out a new agreement when you part exchange your car. If you owe £3500 more than the car is worth then this must be added to the price of the new car.

Finance companies will probably not lend someone £6500 for a £3000 car but lets say they would for the point of the exercise.... Then, once you have been loaned the 6 and a half grand, there will be interest to pay on it bringing your total amount payable to, let's say, £9000. You will be increasing your amount owed by doing this.

There are 2 ways that I can see as being your ways out...

1) Personal unsecured loan, it'd have to be a cracking rate for it to be worth it.

2) Exercise your early termination rights - if you have them on the current agreement (dig out your agreement to check).

I hope this has helped you to understand what the hell is going on here.

JJ

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You gotta tie yourself to the mast my friend, and the storm will end.

ahh now i understand what she was ranting on about. thankyou very much for clearing that one up mate. they have offered the early term thing but only once iv payed half of the agreement which means if my calculator is correct, id have to keep the finance/car for another 2 years before id be allowed to do this :(

No probs.

Why don't you set up a savings account for overpayments for the car? Keep a check on the amount left owing and when you have enough savings to 'buy' your way to the termination point, get shut, thus not having to keep it for ages.

Better than having to keep the car for another 4 years though eh?

JJ

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You gotta tie yourself to the mast my friend, and the storm will end.