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Keyser Soze666

No longer being able to afford car repayments

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Call it default, but IF one can no longer afford the car repayments and you tell the finance company this, how does it work exactly?

 

So say you bought a car for Bt1 mil 2 years ago and in that 2 years you have paid off half the value (500k) How would it work, would you just lose the car and that's it, or would some cash be coming your way back at some point since on paper you own half the motor?

 

Asking for myself NOT a friend. I'm genuinely not in this position now and hope not to be, but it's worth knowing incase it does come to this later down the track.

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The Bank or finance company will want to recover the total amount owing which is the payout figure.

If you owe 500K still then the bank or FC will take court action to recover the amount owed.

The LED ( legal execution dept')  will auction the car and the amount will be deducted from the final payout figure that's required. Then, if that's not sufficient, they will auction what other assets you may have to get the money owed back.  

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Right ok. What if they auction the car and get say 750k for it, would 250k then come back to you?

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1 minute ago, Pilotman said:

The person paying for the car on finance does not own the car, they are in effect renting it until the final payment is made,  the finance company own the car, therefore all things being equal, nothing will come back to the 'renter'.  

I know that, same as a house with a mortgage, why i said 'on paper'

 

Anyway, some say you will get some back, if in 'profit' but others saying you don't.

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1 minute ago, Keyser Soze666 said:

Anyway, some say you will get some back, if in 'profit' but others saying you don't.

 

Whose name is on the car ownership document?

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1 minute ago, Keyser Soze666 said:

I know that, same as a house with a mortgage, why i said 'on paper'

 

Anyway, some say you will get some back, if in 'profit' but others saying you don't.

you (they) won't, end of. 

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Just now, blackcab said:

 

Whose name is on the car ownership document?

The wife's, of course. That isn't important though, just generally trying to find out how it works.

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Just now, Pilotman said:

you (they) won't, end of. 

If that is the case then fine, just want to know.

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1 minute ago, blackcab said:

 

Whose name is on the car ownership document?

Try selling it and defaulting on the remaining debt, plus interest.  You will then find out who the real owner is. 

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2 minutes ago, Pilotman said:

you (they) won't, end of. 

So if there is any profit after sale that goes to the finance co?

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Posted (edited)
5 minutes ago, Keyser Soze666 said:

So if there is any profit after sale that goes to the finance co?

usually, they will try to off load the car quickly, inevitably at a reduced price.  Obviously, any 'profit' will go to them, but there will not be any excess cash from such a sale, as to them its a loss of interest that would have been paid over the remaining years.  Add depreciation and it will always come out negative.  What's worse is that repossession doesn't mean that the debt is cancelled.  If the calculation of loss exceeds the sale price, that will remain a debt to be paid by the 'renter'.  

Edited by Pilotman
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Posted (edited)

Its best to try to sell the car with finance. This can be done at times. That way you can maybe get some of the profit your way. The finance company has to agree to this. Also the other buyer must be checked. 

 

Its not easy but it can be done. 

 

*edit*

 

But 2 year old car just paid of 500K not sure how much you could sell it for in the current market. So maybe there is no profit at all. Maybe even an extra loss. 

Edited by robblok
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