To Walk Or Not?

[Teeonethousand]

Hi All

We live in interesting times - I read something about folks being in negative equity with their car contracts and that it would be the owners problem - not the finance house and so I read the small print on my finance deal.

It turns out i can hand my car back at the end (Sept 09) and walk away which might be good but I also calculate that I could walk away now if I have paid half - which i almost have.

I would be interested in opinions on what value the outstanding balance would have to be to make walking away a good option for 57 plate 250 SEL Auto (without SatNav) that has 28k miles on it. (so a service and some tyres are due)

Another way would be to ask what it is worth but the fact that i have had it since new and know it well has some additional value.

Common sense says keep it for 5 years but I cannot see the point if the car is in neg equity right now.

It is worth adding that having lost a ton on this car I would probably not buy a new vehicle but a 1 or 2 year old something.

[aido]

Personally I'd walk away like you're saying and just bite the bullet.

I was having this exact conversation with my boss the other day and he is where you are right now, except he currently has a 320d to show for it.

He's going to chop that in, and get a newer 320d if they'll match his payments and then he not only saves on tax quite heavily but also gets even better MPG than he is currently getting!

[simon k]

same with me paid half so can hand it back which im going to, the only problem that you possibly could have so im told is that if you do it more than once or twice with the same dealer or finance company you are likely to get refused finance from them again.

but its your legal right that you can hand it back with nothing further to pay

[scott]

It turns out i can hand my car back at the end (Sept 09) and walk away which might be good but I also calculate that I could walk away now if I have paid half - which i almost have.

One thing to watch is there might be a clause regarding fair wear and tear - brakes/tires etc. My mate handed back a Discovery only to find they charged him for every scratch that had to be "fixed" to bring the car up to showroom condition. I understand that the finance companies/dealers are loosing money on these deals so might be keen to extract a pound of flesh.

[Teeonethousand]

I wondered whether they would try to nit pick - the contrac says in good condition for it's age and miles - so the odd bonnet chip and kerbed alloy is ok by my interpretation.

The big thing for me is whether i am losing out by it - half the finance is still 20% less than the price of a simlar car at the dealer - assuming you can get a good bargain at a dealer for effectively no part ex then I could stand still for about the same. If I get another new one I will have to put another deposit down and have another high depreciation asset and **** another load of money away.

Since i have been thinking about it though - i do like the 3 series convertable :=)