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Payment difficulties

What to do if you are struggling to meet your payments?

It’s important to always choose a finance plan that you can comfortably afford to repay, but if a change in circumstances leaves you struggling, getting the right information quickly can make the process much easier.

Firstly, it’s important to speak to your finance provider as soon as possible, as the earlier they know about the problem, the easier it will be to solve. You may also benefit from contacting your Local Trading Standards Department or Citizens Advice Bureau, who will offer you free, impartial information to help you get back on track.

Until then, there are a few things you might want to consider:

Don't stop making your repayments altogether
No matter what your circumstances, stopping your repayments entirely is never a good idea. The contract that you signed at the beginning of your agreement is legally binding, so ignoring the problem won’t make it go away. Instead, you’ll be faced with late and missed payment charges, increased interest rates and even admin charges. You might even have your car repossessed or have bailiffs come knocking at your door.

Swap for something cheaper
One solution could be to trade down for a more affordable car. This means taking out a loan to cover the full amount still owed on your initial loan, plus whatever extra is needed for your new car, which all helps to lower your monthly payments. This helps to ease any immediate pressures on your cash flow, but you’ll still be paying more for a car of lesser value, so you should be sure that it’s what you really want before committing.

Selling up
If you can’t afford to run a car at all (or maybe you no longer need one), then simply selling your car might be the best option. One important thing to bear in mind is that your finance company still owns the car, so you’ll need to make sure you consult them before making any decisions.

Handing the car back
If you’ve chosen dedicated car finance rather than a personal loan, your agreement will give you an additional option to hand your car back. This requires a certain proportion of the car’s value to have already been repaid, which generally equates to around two thirds of the total price, and for all payments so far to have been paid on time.


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