Car Finance

dubmando

Can anyone advise, like most of the people in Ireland my financial circumstances were drastically reduced last year, I have car finance and was over 3 years into a five year loan. I became ill and was in hospital and undergoing treatment and had to look at my budget in order to survive.I contacted the finance company amongst others and explained my situation and requested a reduced payment from 300 monthly to 150, which was all I could afford to pay at that time. They firstly refused and I basically told them this was all I could give and even then, this was stretching as far as I could go. They eventually agreed and said for 6 months I could do this,Unfortunately although I am back part time at work I am still attending hospital and at present it is not possible to return full time, I have contacted them again and requested a further 3 months at the same payment. They have point blank refused and when I told them I could not pay the full amount, it was impossible they suggested I return the car (which incidentially I did not borrow the full value of when taking finance I had over 25% of the value myself) or go into arrears??? Having never been in arrears of any kind of my life I find this suggestion amazing for any financial institution to suggest to a customer. Can anyone advise what to do, I cannot return the car, as I need to drive or I will lose my job also I don't feel this is a fair suggestion as I have paid over 70% of the initial car loan, and cannot pay in full the outstanding balance of the loan. I fully intend to pay the balance, just over a longer period than initially agreed, this isnt a choice I chose to take, these are circumstances I cannot control and at the minute am trying my best to work through a very bad time while honouring all my commitments, and hope things improve and expect them to within (please God) the next few months. Any suggestions,advice would be greatly appreciated.

Rebel1977

1. Ask can you go interest only for a period ?

2. Had you any payment protection on the loan ?

3. Was it a bank loan ? Finance loan i.e.lease/hp

Thoie

This might be better off in the banking section, but depending on how much money is left on the car finance, would you consider taking a personal loan for the outstanding amount, paying off the car finance, and then repaying the personal loan over a longer period than is left on the car loan?

So, say there's €3.5k left on the car loan, at 300 a month for another 12 months. Ask them how much it would cost to clear the loan now (something may be knocked off for interest). Let's say the cost to clear is €3.2k. Borrow that over 2 years (150 per month payment), as long as you're sure you can keep paying that amount.

In normal situations I'd advise against this sort of thing, as you end up paying more in interest, but in your situation it might give you some breathing space. Depending on the bank you go to you might be able to set up payment holidays as well, so if you know you'll be going for surgery in September, you could arrange to skip that month in advance. Obviously that increases the monthly amount/drags out the repayments (costing more in interest), but it might help somewhat.

chris85

they are suggesting you return the vehicle as they have no legal entitlement to reposses it as you have over a third of the finance price paid (commonly known as the third rule in car finance) so they would have to go to court to allow them to take back car, which they wont do as often unsucessful.

daingeanrob

good advice chris, they won't go to court and you hold all the cards. you should insist on speaking to a manager/senior person and follow up with a registered letter. explain you situation and let them know you intend on paying all off.

dubmando

Thanks for the quick replies, I had not payment protection with the loan, it is with Permanant TSB finance and there is no way I can borrow any further loans (personal) this is an option I initially looked at and unfortunately is not open to me. I am going to write them a letter (as advised) and make the offer I have previously made. I have spoken to a person who works in a money advise position and she suggested this also. It is a relief to know they are unable to repossess the car and although the loan will be over a longer period, It will be completed at some stage. Thanks again, will post any further update.

dudara

Moved to Banking & Insurance & Pensions

dudara