Finance Q&A - Change/Amend Finance

How do I get out of car finance agreement?

I’ve signed a hire purchase car finance contract over a year ago, but since had a change in my financial situation. Now I can’t keep up with payments. Is there a way to end or change or end the agreement? 

Tom

Answer from the Stoneacre finance team:

Hi Tom, thanks for your question.

You have a few options available when it comes to HP finance. The first one is to simply extend agreement length, thus making monthly payments cheaper. The downside is that you’ll end up paying more interest over time. It’s worth it though if you want to keep a car. 

Another option is to pay the remaining settlement sum until you reach a 50% - which will be much sooner than with PCP since you’re paying for the whole cost of a car without a final payment in the end. However, this can be pricey depending on how long you have left on the finance agreement. 

You can also part-exchange the current car and trade it for a cheaper one, even with outstanding finance. If the price of a car is worth more than outstanding finance, then you can use the equity to cover the cost of financing or buying a new vehicle. For example, if the car is worth £10,000 and outstanding finance £4,000, you get £6,000 to use towards a new car, while £4,000 is paid as a settlement sum for the finance company.

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