Coronavirus payment breaks have been a lifeline for millions since the first lockdown started in March 2020. But now they are being restricted... You may have lost your job or be worried that may happen. You may be back on furlough or your partner may have had their hours cut or a self-employed business may have been badly hit by Coronavirus. If you know you can't pay all your debts, bills … [Read more...]
3 month car finance payment breaks because of Coronavirus
In April 2020, the Financial Conduct Authority (FCA ) set out new rules for car finance lenders on how they should respond to customers who are affected by coronavirus. It followed the general "three-month payment breaks" approach used for other credit from mortgages to credit cards. In July, the FCA these rules were extended to allow for a first or second payment break to be taken up until … [Read more...]
“Will settling defaults help me get car finance next year?”
A reader, Mr W, asked: I had credit cards and got myself in a mess when getting balance transfers but keeping the old cards. Then I lost my job last year, but I am now working again. I have defaults ranging from 2015 to last month. All my debts add up to about £6,500. Many of them have offered me a discount if I clear the outstanding balance. I have been offered a 20% discount on a £3,500 … [Read more...]
“Can I transfer a loan to my partner? It’s car finance.”
A reader asked: I got a car loan last September because I had better credit than my partner. She has been paying it off since the start by transferring the money to my bank account. Now the question is, would it be possible to transfer the loan to my partner so it's completely in her name? And if so would it move off my credit report? You can't "transfer" a loan The simple answer is No. … [Read more...]
Were you sold a car on unaffordable finance?
The FCA has published its long-awaited review of car finance: Our work on motor finance – final findings. This work began back in April 2017. News reporting has seized on the FCA's findings that commission structures give dealers an incentive to charge higher interest rates. For example: Car buyers overcharged £1,000 by dealers for loans, says watchdog. But here I am interested in the FCA's … [Read more...]
Voluntary Termination (VT) – how to end your car finance early
When you are buying a car on finance you have the right to hand the car back and end the agreement. Depending on how much you have paid, you may not need to pay any more. This is known as Voluntary Termination (VT). It applies if you have an HP or PCP finance agreement. This article explains your rights and what you have to do to VT your car. In 2020 and 2021, many people who have lost … [Read more...]
Car finance – what happens in an IVA?
Cars on finance can be a difficult problem if you are thinking of an IVA or already in one. And with more than a million cars a year in the UK being bought on finance, this is an increasingly common situation. It can make a big difference if you are leasing a new Range Rover or if you have a 5 year old small hatchback on HP! You will need to talk to your IVA firm about your particular … [Read more...]
Can I get another car after VT or is part exchange better?
A reader asked: I want to terminate my PCP car finance. The car's fine, good condition, but we now need a bigger car. According to my contract I can hand it back. But I am going to need to get another car, so I am worried this will harm my good credit record. Would part exchange be better? Your right to end a PCP contract early Personal Contract Purchase (PCP) is the most common way to buy … [Read more...]
What’s the right car finance option for you?
Cash is often the most cost-effective way to buy a car. But this isn’t always possible, especially if you have money problems. In 2018 more than 80% of new cars in Britain were bought on finance - but that doesn't mean it's going to be right for you! The four ways to finance your car a personal loan - a loan from your bank or building society to spread the cost over 1 to 7 years. Here … [Read more...]
Avoid insurance rip-offs if you pay monthly
MoneySupermarket have found that on average people are being charged an extra £73 to pay their car insurance monthly. And as more than 45% of people do this. Do people realise the extra cost? The Financial Conduct Authority's Thematic Review of Provision of premium finance to retail general insurance customers may sound dull - but read on if you are one of the millions who pay for your car … [Read more...]