Advice re finance

[Darlo]

Hi guys,

Rather unfortunately I am in a position where I need to buy a house following a split with the Mrs.

I've jumped through many many hoops with the mortgage company and I have now got a deal sorted.

However if I could reduce the payments I make per month for the car I would be in a lot better position.

I have never had finance on a car. Either paid cash or had a loan. I bought my gti new in October and got finance through VW so totally inexperienced in what to do.

Now I know I am going to take a big hit if I sell, I mean a massive it!! At the minute though the house is priority. If I can find an extra few quid a month it means I have to find less for my deposit when the house is built eg reducing my monthly by £70 will mean I have to find £3k less deposit.

So my options are

1) struggle, keep Gti and be on my arse when it's built in December
2) speak with vw find a cheaper car and reduce my monthly payments
3) find another car from a none vw garage and hope they give me a decent part ex against a cheaper car.
4) sell private, clear finance and start again... Although I suspect there will be little or no equity in the car.

Anyone had any experience or can offer any advice?

Thanks 

[GrahamFR]

why dont you extend the finance period so that lowers your monthly payments. thinking about it there wont be a mk8 for about 5/6 years so you might as well keep it till the mk8 comes out, there's nothing better out there till then lol 

[CraigW]

Sorry to hear about your circumstances. In this instance the house is the priority and not the car. As tough as it may be if i were in your position i would get shot of the car and get a cheaper alternative until i was in a position where i felt more financially comfortable. Don't put yourself under any undue stress because your trying to keep payments up on a car which is quite frankly an expensive luxury

[dubber36]

When you say you'll take a massive hit, how much are we talking? As you didn't pay for the car outright, it won't be the difference between your invoice price and what you sell it for, it will be your deposit plus payments, minus any equity (or plus the negative equity if that is the case.) That's not the whole story tho', because since October, you would have had to have had a car of some description to drive around in, so that would have cost you money in depreciation and servicing.

If you are able to find an extra £3k deposit for the house, over 25 years that will mean you pay back £5,800ish less, so it might be as well to take the hit now to save more in the long run.

As Graham suggested, you could extend you finance and keep the car, but that would mean owing more money on both the house and the car and even longer before you have any decent equity in either.

[Rossc0]

Phone up VW finance and see what they can do for you, would be the best bet

[Maka344]

Call around a few dealers - they also buy cars.

A GTI at the age yours is will fetch a better price than a trade-in.

[Bandit127]

If you can sell it and clear the finance then do so. Anything else is messy and extending the finance is (IMO) using credit to get out of a money problem.

Buy yourself a Mk4 GTi 1.8T for a grand and use that for a year or so until your finances have settled back down. You can then review your budget and proceed accordingly.

I can recommend the 1.8T with a stage 1 remap for full on fun. And I certainly don't get embarrassed parking up in the local Sainsburys. It is in good company with all the other Mk4s in there.

[Darlo]

Glad I posted now. Some good ideas and options I had not considered.

I rang vw finance and got a settlement figure but not discussed extending the deal as yet. If I were to sell it I think it would clear the finance and have some pocket change.

I rang up about an 07 plate S3 from a garage, the salesman I spoke to was really helpful. I explained my problem and he basically said there wasn't enough in the deal to make it worth his while. He was gutted as he wanted to have a go in the mk7!

The stupid thing in all this is can afford new mortgage and the monthly payments on the car BUT the monthly just reduces my borrowing power as they will only let me use 50% of my overtime. I understand why the mortgage company is so strict given the mess the country got in but it is frustrating.

Something else I was discussing with the lads at work. The next three services are paid for on the gti, its stupid cheap to tax and insure, peace of mind of the warranty and I'm now getting 35mpg. So if I buy something cheap the likelihood is my running costs will be higher.

I will have a think over my options. I have a mortgage offer in place so the house is secure. It's that extra £3k that's a pain in the ass!!

Thanks again

[Phil 117]

I sold mine and didn't take too much of a hit. Although I did get an initial deal.

The other thing if you want to take out finance again on another... At the moment, I think VW offer a £4000 deposit contribution on a CC. You can use part of the £4,000 to clear the negative equity, and the rest as a deposit on a CC. If you go for a lowish spec (and they are still well equipped), you might be able to lower you payments.

Even if it not be VW, deposit contributions seem to be the done thing to reduce negative equity.

[Darlo]

I sold mine and didn't take too much of a hit. Although I did get an initial deal.

The other thing if you want to take out finance again on another... At the moment, I think VW offer a £4000 deposit contribution on a CC. You can use part of the £4,000 to clear the negative equity, and the rest as a deposit on a CC. If you go for a lowish spec (and they are still well equipped), you might be able to lower you payments.

Even if it not be VW, deposit contributions seem to be the done thing to reduce negative equity.

Yes certainly another options. Maybe not a CC but will look in to other options.

Cheers mate