Selling Car that was bought on finance!

SoupyNorman

The g/friend bought a '06 golf on finance a month or so ago. She is now starting a job with a company car.

Can she simply sell the golf and pay off the finance or is it a little more complicated than that???

furtzy

AFAIK any bank draft etc will have to be made out to the finance company and cleared before you can transfer the ownership. Remember when you finance a car you pay the interest up front. Usually takes about 10 months to pay the interest off so she will owe a huge amount on the car if its only a month old. Probably about the price of the car + 9 monthly payments....ouch!

kluivert

What type of agreement is with the finance company, ie lease, hire purchase or personal car loan.

Personal car loan - sell the car pay off the principle + any interest accured since the loan was taken out. Interest accured is calculated as APR dividend by 365 days mutipled by the number of days the loan has been out for.

Eg 25000 @ 9% APR

9% APR = 0.02% per day off the 25000 = 50 cent per day * 30 days = 15e in interest.

Lease - give the car back and stop the payments

Hire Purchase - same as the car loan above.

Big Nelly

If you get a company car it kills your tax free allowance, better off keeping your own car and claiming milage etc on that car if it is on finance.!

furtzy

kluivert wrote:

What type of agreement is with the finance company, ie lease, hire purchase or personal car loan.

Personal car loan - sell the car pay off the principle + any interest accured since the loan was taken out. Interest accured is calculated as APR dividend by 365 days mutipled by the number of days the loan has been out for.

Eg 25000 @ 9% APR

9% APR = 0.02% per day off the 25000 = 50 cent per day * 30 days = 15e in interest.

Lease - give the car back and stop the payments

Hire Purchase - same as the car loan above.

Not sure about that. Any finance agreement I've ever had or anyone I know has ever had be it with Irish Permanent or Woodchester or whoever works on the principle of price of car plus interest over the term so if you choose to settle the finance early they get the total interest from the term.

Ring them up and get the settlement figure....I'm sure it will be huge

galwaytt

Fitzy - you're right.

Hire Purchase = loan amount+ interest over the period agreed.

So, say, on a 3 yr deal, you borrowed 15k,and the interest came to 3k - what you've signed up for, on Day 1, is to repay 18k.

Now, say 1 month into the deal, you need to get out. Total Amount Repayable = 18k minus the one months' repayment already made. That's going to hurt, especially this early. If you were further into the deal, they might give a small discount on the repayable amount, but outside of that you're stuck with it.

And, if you take into account the BIK she'll pay on the co car, and add the almost 3k loss on the finance amount - she better be getting a bloody huge payrise.............!

colm_mcm

also take the years depriciation into account.... ouch!