Negative equity on 2nd hand car

Whu557

Hi i don't come on here often and was wondering if you could help me out here.

Has anyone ever wanted to trade in a car they have not had on hp very long for something else perhaps abit smaller and ended up in negative equity.

We would be about 3k possibly a bit higher in negative equity but was wondering if we traded down to a car which costs less say a car that cost 9k then we could add the negative equity to that and end up with 12 or possibly 13k finance outstanding. It's just we possibly rushed into a deal to get a bigger car but find we could be paying to much for a 4 year old car.

Any help much appreciated many thanks

colm_mcm

At this stage the best thing you could do is suck it up. Your car will have depreciated, and you'll be handing the garage over another chunk of profit whether you move down, up or sideways.

Whu557

colm_mcm wrote: »

At this stage the best thing you could do is suck it up. Your car will have depreciated, and you'll be handing the garage over another chunk of profit whether you move down, up or sideways.

How much would a 4 year old car depreciate roughly just a figure on any car off the top of your head. I'm only the 2nd owner

Atlantic Dawn

Whu557 wrote: »

How much would a 4 year old car depreciate roughly just a figure on any car off the top of your head. I'm only the 2nd owner

About 50% every 3 years would be a guide amount.

Whu557

Atlantic Dawn wrote: »

About 50% every 3 years would be a guide amount.

Well we are going into our 2nd month of ownership the car is a 2012 and was bought for 14000 with Apr on top. Thanks for replies guys

colm_mcm

There's no hard and fast rule for depreciation. Looking at 10 reg Golfs at the moment for example, the decent ones are €12k, that's 50% depreciation over 6 years.
Re the price of your own car, prices vary depending on the car, so the ones you see much cheaper than yours may not be equal.
Don't worry too much about it at this stage, far away hills are greener etc.

Whu557

colm_mcm wrote: »

There's no hard and fast rule for depreciation. Looking at 10 reg Golfs at the moment for example, the decent ones are €12k, that's 50% depreciation over 6 years.
Re the price of your own car, prices vary depending on the car, so the ones you see much cheaper than yours may not be equal.
Don't worry too much about it at this stage, far away hills are greener etc.

Not too worried about the deprecation I'm just wondering really if it's possible to go down to a bit of a smaller car and if there's any negative equity could i add it onto a new hp deal. Would this be possible??

colm_mcm

No, you wouldn't be able to change out of the car until the balance of the HP is the same as or less than the net trade in value. Ie you'd have to pay off the shortfall before you could do anything.

No bank would (for example) want €13k financed against a car worth €9k, so the original deal has to be boxed off before you go again.

It's never worth your while doing something like you're suggesting.

Whu557

colm_mcm wrote: »

No, you wouldn't be able to change out of the car until the balance of the HP is the same as or less than the net trade in value. Ie you'd have to pay off the shortfall before you could do anything.

Ah I was under the impression you could add whatever you owe to a new finance agreement.... don't think that Will happen if ever at this stage car retails for between 12900 and 14k and we owe 14k plus Apr so about another 3000 on top of that. Unless they drop the Apr possibly

Sh1tbag OToole

Negative equity is so 2008

Whu557

Just unsure what would happen if i was to go looking for a cheaper car. Say i found a car i wanted for between 7 and 9k could i add what's owed into that bringing it up to 12 or 13k with interest. It's not that we don't like the car it's fantastic it's just we think we might of been swindled a bit and paying more than we should for a car of that age

colm_mcm

Ok, I'm just gonna spew some figures here and see if it makes sense.

Buy car for €14000
HP for 4 years @ €373 (assuming 7% Apr)
Total would be €17900
Assume you've paid €750 off so far.
Total owed €17150

You go back to garage, they will buy car off you for €11,500
You come up with €5650 and pay the finance company that,


You're back to square 1

You buy a cheaper car for €9000
Do finance for 4 years again,
€240 a month x 48
End up paying €11500 overall for new car.

So in this example, you'd pay €17900 if you keep what you have,
Or pay €17900 (750+5650+11500) in total and end up with a smaller, less valuable car

Whu557

colm_mcm wrote: »

Ok, I'm just gonna spew some figures here and see if it makes sense.

Buy car for €14000
HP for 4 years @ €373 (assuming 7% Apr)
Total would be €17900
Assume you've paid €750 off so far.
Total owed €17150

You go back to garage, they will buy car off you for €11,500
You come up with €5650 and pay the finance company that,


You're back to square 1

You buy a cheaper car for €9000
Do finance for 4 years again,
€240 a month x 48
End up paying €11500 overall for new car.

So in this example, you'd pay €17900 if you keep what you have,
Or pay €17900 (750+5650+11500) in total and end up with a smaller, less valuable car

I see what about 60 months?? Wouldn't they take the interest off that seeing as I would of only paid 2 payments?

Not too clued up on all of this but if we got a new car say 9k we could end up paying the same as we do now if they was to add the remaining balance onto a new car.

All I'm wondering is would any finance company add the remaining balance like the negative equity onto a new deal with a new car?? I know it's possible in the UK don't know about here tho.

Many thanks

Hopeful2016

Whu557 wrote: »

It's not that we don't like the car it's fantastic it's just we think we might of been swindled a bit and paying more than we should for a car of that age

Just curious if this is buyer's regret or if you hadn't considered this before you bought it? Genuinely just asking not being smart here or having a go.

colm_mcm

Whu557 wrote: »

I see what about 60 months?? Wouldn't they take the interest off that seeing as I would of only paid 2 payments?

Not too clued up on all of this but if we got a new car say 9k we could end up paying the same as we do now if they was to add the remaining balance onto a new car.

All I'm wondering is would any finance company add the remaining balance like the negative equity onto a new deal with a new car?? I know it's possible in the UK don't know about here tho.

Many thanks

60 months is worse again. That would put your total owed to around €19k.
When I sold HP the interest was front loaded, so settling early is unattractive. I'd say nothing's changed there.
You might get a tiny rebate, but nothing that will make a difference.


Check your finance docs, they'll have the totals detailed on it.

No company will let you transfer negative equity into a new deal.

Whu557

Hopeful2016 wrote: »

Just curious if this is buyer's regret or if you hadn't considered this before you bought it? Genuinely just asking not being smart here or having a go.

Not considered before we bought it. Hmmmm say we kept it for two years would we be in a better position then?? We can afford it just a bit disappointed were paying so much for a 4 year old car

Del2005

Whu557 wrote: »

Not considered before we bought it. Hmmmm say we kept it for two years would we be in a better position then?? We can afford it just a bit disappointed were paying so much for a 4 year old car

But if you do want you want to do you'll be paying the same amount for a car worth much less than your current car, the value of a car isn't purely down to age.

Search this forum for "half hp law" to get out early.

Whu557

Del2005 wrote: »

But if you do want you want to do you'll be paying the same amount for a car worth much less than your current car, the value of a car isn't purely down to age.

Search this forum for "half hp law" to get out early.

That is true i guess I never thought of it like that. We can afford the payments no problem it's when you see a car like a 141 or a 132 for less than what you paid for a 12 plate your heart sinks a little. Like I said the car is fantastic and not much more than what we was paying for our previous car which was getting a tad ridiculous as trying to fit more than two Tesco bags in it was like a job for a contortionist.

Was only querying if you could trade in a car oweing more than what it's worth and adding that outstanding amount onto a new deal. What happens if you want to pay say a bit more a month in this situation??

bazz26

That depends on the terms and conditions of your HP agreement, check with your lender. Most of these HP finance deals will allow you to repay the amount early but may still charge you the full interest amount of the original term.

Not having a go OP but it really sounds like you did little or no research into the financial side of things at all. You really need to sit down, study the details of these finance deals and do some maths before just leaping in and ending up where you are now.

Whu557

bazz26 wrote: »

That depends on the terms and conditions of your HP agreement, check with your lender. Most of these HP finance deals will allow you to repay the amount early but may still charge you the full interest amount of the original term.

Not having a go OP but it really sounds like you did little or no research into the financial side of things at all. You really need to sit down, study the details of these finance deals and do some maths before just leaping in and ending up where you are now.

That's exactly what I'm doing now I've been sat all night working things out. It's why I asked would it be possible to trade down to a car that's worth less and add what is owed into the new agreement with the same lender or a new lender. Thus possibly reducing the payments and possibly going up a year or two instead of paying such a huge amount for a 4 year old car. Seen 131 and 141 cheaper up the country.

Many thanks

bazz26

Your problem is though is that your current car is now worth less than you owe on it so by trading it you're going to lose more money.

Del2005

Whu557 wrote: »

That's exactly what I'm doing now I've been sat all night working things out. It's why I asked would it be possible to trade down to a car that's worth less and add what is owed into the new agreement with the same lender or a new lender. Thus possibly reducing the payments and possibly going up a year or two instead of paying such a huge amount for a 4 year old car. Seen 131 and 141 cheaper up the country.

Many thanks

So you want to pay the same amount, or more, for a worse car with a newer registration number. I never realised that reg plate snobbery was so bad. You have a perfectly good car at a price you can afford who cares what age it is. I bought a 7 year old car last year for nearly as much as a new car, thing is my 8 year old car has luxury and tonnes of power the new car would have been a barren eco box with no comfort.

Whu557

Del2005 wrote: »

So you want to pay the same amount, or more, for a worse car with a newer registration number. I never realised that reg plate snobbery was so bad. You have a perfectly good car at a price you can afford who cares what age it is. I bought a 7 year old car last year for nearly as much as a new car, thing is my 8 year old car has luxury and tonnes of power the new car would have been a barren eco box with no comfort.

No it's not just that we just feel as if were always going to be owing more than it's worth even into the 5th year of payment. Pretty disheartening really yes we didn't look into it fully i must admit and if we could refinance what we owe outstanding into a new agreement that would be fantastic. We just don't want to be paying over 300 quid for a 9 year old car in 5 years time that Will be virtually worthless

Del2005

Whu557 wrote: »

No it's not just that we just feel as if were always going to be owing more than it's worth even into the 5th year of payment. Pretty disheartening really yes we didn't look into it fully i must admit and if we could refinance what we owe outstanding into a new agreement that would be fantastic. We just don't want to be paying over 300 quid for a 9 year old car in 5 years time that Will be virtually worthless

If you get a brand new car once you drive it off the forecourt you owe more than its worth.

How will owing 13k on a 9k car feel if you roll the negative equity over? You'll have is a newer number plate, a lower quality car and bigger difference between value and loan.

Whu557

Del2005 wrote: »

If you get a brand new car once you drive it off the forecourt you owe more than its worth.

How will owing 13k on a 9k car feel if you roll the negative equity over? You'll have is a newer number plate, a lower quality car and bigger difference between value and loan.

Well we would be happier paying that for a newer car as we would feel that it would be better to pay that amount on a car which is newer and could possibly cost less to run in the long term.

Just wanted to know if you can roll over negative equity on car finance in ireland......

Many thanks

s14driftking

What's the car. Learn a lesson from this the next car u try to buy don't use a loan or a pcp deal as u will always be in negative equity.

Whu557

s14driftking wrote: »

What's the car. Learn a lesson from this the next car u try to buy don't use a loan or a pcp deal as u will always be in negative equity.

Hyundai ix20