tuktuk Posted June 21, 2015 Share Posted June 21, 2015 I bought a car on finance nearly 2 years ago now on a 48 month contract. Is there any financial benefit to paying this off 2 years early? Ie will the outstanding interest charges be excluded in the settlement fee? I want to know how things work before i call them to pay it off incase they try to persuade me that the original full payment is always due, surely there is incentive to settle early? Quote Link to comment Share on other sites More sharing options...
Stu Posted June 21, 2015 Share Posted June 21, 2015 you may have to pay an early settlement fee which is unusual these days you will only pay the balance owing and not interest read your paperwork or give them a call if you can afford to pay it off early then do so as you will save even if there is a early settlement fee Quote Link to comment Share on other sites More sharing options...
Joeman Posted June 21, 2015 Share Posted June 21, 2015 No harm in calling up and asking for a settlement figure. if the settlement figure is less than the sum of the remaining payments and you want to pay it off, then do so. Quote Link to comment Share on other sites More sharing options...
fq-craigus Posted June 21, 2015 Share Posted June 21, 2015 As stu says, only loaned amount to pay and no interest. Just bare in mind you wont have paid off as much as you would have thought because interest is front loaded on finance. Quote Link to comment Share on other sites More sharing options...
eastanglianbiker Posted June 21, 2015 Share Posted June 21, 2015 also ask them the final figure to pay it off and any penalties for doing so and if that alters if you only pay off enough to leave one final payment next month that often changes the way they charge things Quote Link to comment Share on other sites More sharing options...
bmwdave Posted June 21, 2015 Share Posted June 21, 2015 It depends what kind of finance you took it on. If it was an unsecured loan through a bank or similar, then you should only pay the outstanding balance, possibly with an early redemption charge but this must be reasonable. If you took out a Hire Purchase contract its a bit more complicated and you will pay more to get out of the contract, although you will save money compared to paying out the contract to the end. Anyway, it costs nothing to ask for a settlement figure. Quote Link to comment Share on other sites More sharing options...
tuktuk Posted June 21, 2015 Author Share Posted June 21, 2015 Cheers guys, i have the paper work out but its not clear (as if contracts ever are). I remember askig the salesman if paying off early would benefit me and he assured me it would, he kept repeating ''the monthly payments wont be reduced but the term of the contract will''.Il call tomorrow and see how much its going to sting. Quote Link to comment Share on other sites More sharing options...
Stu Posted June 21, 2015 Share Posted June 21, 2015 yeah thats usually the case if you make payments the monthly DD will stay the same but you will pay it off early Quote Link to comment Share on other sites More sharing options...
Fozzie Posted June 22, 2015 Share Posted June 22, 2015 I think if you can you always should I did with my car and they looked at how much I owed, and I tore their arm off as the settlement figure saved me over a grand in interest costs as I had a few years left on it.Sometimes there is a fee but it's a small amount and you save much more in interest costs so it's still a more profitable decision Quote Link to comment Share on other sites More sharing options...
tuktuk Posted June 22, 2015 Author Share Posted June 22, 2015 Its money i would rather be putting down on a panigale 899 or mv f3 800 but sense might prevail on this one! Quote Link to comment Share on other sites More sharing options...
RantMachine Posted June 22, 2015 Share Posted June 22, 2015 Its money i would rather be putting down on a panigale 899 or mv f3 800 but sense might prevail on this one! What, you'll put it down on a Japanese bike instead? Quote Link to comment Share on other sites More sharing options...
Guest Posted July 4, 2015 Share Posted July 4, 2015 my mrs had a finance car, 5 year contract, but due to pregnancy and complications, could no longer afford it..Got in contact with vauxhall, their settlement figure was stupid!.the car finance was for £10k, she already had the car 3 years, so payed of about 3k, and they still wanted another 8k to settle early..work it out quickly.. they wanted more out of you to end it early, than what everything is actually worthof course youe xpect to pay some.. but not that much..My mrs couldnt afford to pay it off in full, so opted for a monthly payment for a set amount of years...vauxhall contacted her back, and said they would accept £20 a month, for the next 18 years, or however long it will take to pay off 8 grand at £20 a month Quote Link to comment Share on other sites More sharing options...
fullscreenaging Posted July 5, 2015 Share Posted July 5, 2015 Another option for you to think about;If you are at least half way through the term of the contract you have the right to terminate it.Look in the small print.Just give them a ring. They will come and asses the cars condition and as long as it is in good nick arrange for it to be collected.Years ago, my Mum started receiving disabled allowance and was looking into getting a car on motorbility. My stepdad said it would be nice but we still have to pay the current car off. I told him this info and he didn't believe me at first until he read the small print.No body wants you to know about this so nothing is said. It's not like they lose money on it as they have already had half the interest off you and they just sell the car in the end.Don't let anyone fob you off by saying it will affect your credit rating either as it won't . As long as you have paid religiously and not let anything within your control affect your rating.. Everything will be fine..The reason know this is that when I was a driving instructor a knew someone that changed their car every 18 months when always on a 3 year finance deal. He just.kept terminating the contract and then entered into a new deal.. Quote Link to comment Share on other sites More sharing options...
tuktuk Posted October 10, 2015 Author Share Posted October 10, 2015 I got a settlement figure which worked out id save around £800 from the current balance. Not too bad!Thing is im now a bit stuck! To settle early i need to pay 5k, ive just been to see a new car im after and they valued my part ex at 5k also, ie id just be handing it over and they settle the finance leaving me back at square 1? Alternatively, ive got the 5k to settle the finance but thats only worth doing if i plan on keeping the car for the next 2 years?Dont know how my car has lost over half its value in 14k miles lol. Quote Link to comment Share on other sites More sharing options...
al_stu Posted October 10, 2015 Share Posted October 10, 2015 From brand new to 3 years old most cars lose at least half their value. In fact a lot of owners would be over the moon if they got half back...Plus of course on trade in they have to resell and make a profit, so you'll get less that a private sale Quote Link to comment Share on other sites More sharing options...
tuktuk Posted October 10, 2015 Author Share Posted October 10, 2015 Very depressing situation lol. Quote Link to comment Share on other sites More sharing options...
Abraxix92 Posted October 10, 2015 Share Posted October 10, 2015 Also, as your paying monthly on finance, you are gaining your credit score up, aslong as your not missing payments, you gain no bonus towards your credit score for paying a large amount of, (i learned this the hard way paying 2 bikes of a year early.) i know you never asked about it from the credit score side, but everything will soon become credit score related including mortgages etc. Quote Link to comment Share on other sites More sharing options...
tuktuk Posted October 11, 2015 Author Share Posted October 11, 2015 I suppose the credit rating is a trade off though as id save roughly £800 by paying 2 years early.I always knew you lost money on cars/bike or any types of transport but it takes the biscuit.Ive seen online the same dealer has the same car as mine with an extra 20k miles, only its an m sport version and 1 year younger for sale at 11k. How is mine worth a whole 6k less?I totally understand its a business and they have margins etc but i cant help thinking im being bent over a bit. Quote Link to comment Share on other sites More sharing options...
Stu Posted October 11, 2015 Share Posted October 11, 2015 Yours will be worth more private sale! You always lose when on trade in prices! I have just traded in our car and got 8k for it although we owed more than this the deal we got outweighed what we owed We would have got more selling private but we didn't want to wait for it to sell as the offer they had on was due to end and has actually ended! If you can wait then sell it privately paying off the finance and anything extra is the deposit to the new car Quote Link to comment Share on other sites More sharing options...
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