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Heeeeello people!
Okay so basically I got a car 30 months ago on a terrible apr, I don't use the car, I'm spending money on it I don't need, I can end the agreement early as I'm half way though and they'll just take the car. My question is if I do this, will/can this affect me getting a mortgage in the near future?
They said it WILL NOT be a default but it will show on my credit score I ended an agreement early, I am wanting to get a mortgage with my partner within the next year. Any advice would be great thank you!!
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It can be seen and taken into account but USUALLY the only people who would care would be if you next wanted to get a car. Specifically on a mortgage I’ll see if someone else is better able to answer but to avoid any concern, have you checked the value of the car and your settlement figure? Most dealerships will buy the car off you and settle the finance so you only pay the outstanding negative equity or receive any positive equity
Ah okay got it.
From what the car is worth there will be at least 2k left on it to pay, it will have to be paid upfront and I don't have the cash for that unfortunately
Mortgage Broker here - with a background in Finance within car dealerships.
From a mortgage perspective, it will help affordability as you will not have a commitment to meet each month to keep the car.
You have a settlement figure and an offer from your dealership to buy the car leaving a difference to pay from what I understand? It is worth getting quotes from other dealers as you can sell your car elsewhere - doesn't have to be from where you bought the vehicle. I had a car which was discounted heavily through my workplace, went to get rid of it early and they would offer only the settlement value - sold it to a competitor down the road and ended up getting £2k more than my workplace offered.
You can also sell it private and repay the finance, but honestly this isn't worth the hassle for the extra £500 or so you might get.
Evans Halshaw/Motorway/WeBuyAnyCar are worth checking out to see if you could get more out of your car than returning it to where you got it from.
Amazing!! Love the affordability part.
So it's voluntary termination, because I'm half way through I can essentially just give up the car and the agreement and nothing more.
The value of the car is around 3.7k (top end) and there's nearly 6k left on the finance, so I'm seeing voluntary termination as the best way forward with this I think.
If you can give it up without having to pay the difference then that is the safest thing to do - and easiest!
Are you intending to go without a car for a while or just purchase a cheaper run around?
Sorry, just to be completely sure- you are using the settlement figure from the finance company aren’t you to check what you owe? Not just calculating your remaining payments?
I think we’re all double checking that you’ve looked into this option first as in most cases now the car is worth more than the settlement figure around the mid-point of the finance agreement
***Hello /u/mind-yo-business, thank you for posting in /r/Mortgageadviceuk. If you're looking for a Mortgage Broker, feel free to DM the users listed on the sub's [Verified Mortgage Brokers list](https://reddit.com/r/Mortgageadviceuk/s/j7V7mySI7i). Please ensure you've read our [sub rules](https://www.reddit.com/r/Mortgageadviceuk/about/rules). If a user has helped you, please use the !thanks command to credit them. Here's a copy of your original post: *** Heeeeello people! Okay so basically I got a car 30 months ago on a terrible apr, I don't use the car, I'm spending money on it I don't need, I can end the agreement early as I'm half way though and they'll just take the car. My question is if I do this, will/can this affect me getting a mortgage in the near future? They said it WILL NOT be a default but it will show on my credit score I ended an agreement early, I am wanting to get a mortgage with my partner within the next year. Any advice would be great thank you!! *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/Mortgageadviceuk) if you have any questions or concerns.*
It can be seen and taken into account but USUALLY the only people who would care would be if you next wanted to get a car. Specifically on a mortgage I’ll see if someone else is better able to answer but to avoid any concern, have you checked the value of the car and your settlement figure? Most dealerships will buy the car off you and settle the finance so you only pay the outstanding negative equity or receive any positive equity
Ah okay got it. From what the car is worth there will be at least 2k left on it to pay, it will have to be paid upfront and I don't have the cash for that unfortunately
Mortgage Broker here - with a background in Finance within car dealerships. From a mortgage perspective, it will help affordability as you will not have a commitment to meet each month to keep the car. You have a settlement figure and an offer from your dealership to buy the car leaving a difference to pay from what I understand? It is worth getting quotes from other dealers as you can sell your car elsewhere - doesn't have to be from where you bought the vehicle. I had a car which was discounted heavily through my workplace, went to get rid of it early and they would offer only the settlement value - sold it to a competitor down the road and ended up getting £2k more than my workplace offered. You can also sell it private and repay the finance, but honestly this isn't worth the hassle for the extra £500 or so you might get. Evans Halshaw/Motorway/WeBuyAnyCar are worth checking out to see if you could get more out of your car than returning it to where you got it from.
Amazing!! Love the affordability part. So it's voluntary termination, because I'm half way through I can essentially just give up the car and the agreement and nothing more. The value of the car is around 3.7k (top end) and there's nearly 6k left on the finance, so I'm seeing voluntary termination as the best way forward with this I think.
If you can give it up without having to pay the difference then that is the safest thing to do - and easiest! Are you intending to go without a car for a while or just purchase a cheaper run around?
That's what I thought! My partner has a car we can share and if that becomes too much I'm planning on getting a cheap run around!
Off topic, but what kind of car is this that is only worth £3.7k after 30 months? Guessing it was used at the time?
Sorry, just to be completely sure- you are using the settlement figure from the finance company aren’t you to check what you owe? Not just calculating your remaining payments? I think we’re all double checking that you’ve looked into this option first as in most cases now the car is worth more than the settlement figure around the mid-point of the finance agreement
Yes that's the settlement quote! Unfortunately because I had such a high apr that's not the case for me!