[ZeroFx]

The father in law has an issue with an A7.

He traded in an X6 with 12k negative equity against an A7 with 14k discount off list.

Its got an electrical problem and been in the dealership longer than hes owned it for nearly 2 weeks.

As hes in first 30 days a quick google says he can reject the car and cancel the sale...

Am i right in thinking that 12k negative equity is not linked to the A7 and they effectively bought the car off him rather than moved the debt to the new car?

So if he cancelled the sale on the A7 hes back to square one with no debt or neg equity?

[454697819]

Originally Posted by ZeroFx

The father in law has an issue with an A7.

He traded in an X6 with 12k negative equity against an A7 with 14k discount off list.

Its got an electrical problem and been in the dealership longer than hes owned it for nearly 2 weeks.

As hes in first 30 days a quick google says he can reject the car and cancel the sale...

Am i right in thinking that 12k negative equity is not linked to the A7 and they effectively bought the car off him rather than moved the debt to the new car?

So if he cancelled the sale on the A7 hes back to square one with no debt or neg equity?

This will be detailed in the finance agreement, if its listed as the finance including the neg equity then it may be a grey area.

You do need to give I think one chance for it to be fixed but I cant recall the exact details of the rejection law, so do be 100% sure.

Best of luck.

[Wills2]

The old car finance would have been settled by the dealer so that no longer exists, however depending on the deal structure and the deposit paid it'll still be somewhere in the new deal, not specifically but as part of the overall cost to purchase, unless your FIL paid them 12k cash but if they are taking the car back and cancelling the agreement then yes it's gone.

The way you describe the deal it doesn't really make sense he had 12k neg and then got 14k discount but you make no mention of his deposit I'd be astounded if that deal could be done as effectively the discount is 26k if a deposit wasn't given with the new deal.

[ZeroFx]

Originally Posted by Wills2

The old car finance would have been settled by the dealer so that no longer exists, however depending on the deal structure and the deposit paid it'll still be somewhere in the new deal, not specifically but as part of the overall cost to purchase, unless your FIL paid them 12k cash but if they are taking the car back and cancelling the agreement then yes it's gone.

The way you describe the deal it doesn't really make sense he had 12k neg and then got 14k discount but you make no mention of his deposit I'd be astounded if that deal could be done as effectively the discount is 26k if a deposit wasn't given with the new deal.

Ill find out more tomorrow but its an A7 so there could be a big chunk of discount off list and its likely just because its 12 neg doesnt mean the dealer took 12k loss on the X6. Book value versus retail etc.

As far as i know he didnt put any deposit in or if he did it was nominal.

I think the 1 time fix rule is 30 days onwards to 6 months but under 30 days you can reject. Im not sure what the finance element changes in this if its more or less complex etc

[isleaiw1]

i hope it was second hand and he paid cash...

[Wills2]

Originally Posted by ZeroFx

Ill find out more tomorrow but its an A7 so there could be a big chunk of discount off list and its likely just because its 12 neg doesnt mean the dealer took 12k loss on the X6. Book value versus retail etc.

As far as i know he didnt put any deposit in or if he did it was nominal.

I think the 1 time fix rule is 30 days onwards to 6 months but under 30 days you can reject. Im not sure what the finance element changes in this if its more or less complex etc

In many ways how he got into the car isn't the issue, as the car is on finance the finance company is the owner so they have to reject the car on behalf of the debtor so your FIL will have to contact them if he hasn't already.

[NotGotABimmer23]

I have rejected a car before and it went very smoothly, it's all down to the dealer. Within 30 days you don't have to give them the chance to fix. Write a letter informing the dealer you are rejecting the car and explain why. Also contact the finance company and tell them the same thing.

On the neg equity, if he has 2 loans, 1 for the A7 and 1 for the neg then he will continue to have to pay off the 12k. Alternatively its all been bundled into a deal where the "14k discount" is offset by neg equity and there is a single loan against the car. In that situation the slate would be clean. Check the docs.

Rejection can be a massive pain in the ass if the dealer doesn't want to play ball. If you are buying a replacement off them it will make life a lot easier, they should put you in a courtesy car FOC until the new one is delivered as well.

[AyrshireColin]

Obviously the devil is in the detail but I really struggle with the notion that the £12k negative equity can just vanish.

I may be talking through my ass but I always thought there was a limit on what could be carried into a new car finance deal by way of negative equity and beyond that is where the negative equity loan came in.

So for arguments sake the A7 was £56k list (??) and there was a £14k discount making the amount paid for the car £42k. The negative equity loan is £12k and therefore the total amount being financed is £54k. The finance agreement will show 2 different products with 2 different amounts and 2 different rates of interest just bundled up as 1 monthly payment.

As above I really struggle with the negative equity just going away........

[DB118D]

I'd imagine the £14k discount from list covered the £12k negative equity, and he benefited from a £2k saving

The £12k can't just magically disappear, it's in there somewhere

[DB118D]

Originally Posted by isleaiw1

i hope it was second hand and he paid cash...

ex-Audi "management"

Where management means "managed by Hertz"

[ashenfie]

I suspect the new car is already worth less than the cost of settling the finance. So yes you can return the car, but will have to pay extra to settle the finance

[JustChris]

Originally Posted by Wills2

The old car finance would have been settled by the dealer so that no longer exists, however depending on the deal structure and the deposit paid it'll still be somewhere in the new deal, not specifically but as part of the overall cost to purchase, unless your FIL paid them 12k cash but if they are taking the car back and cancelling the agreement then yes it's gone.

The way you describe the deal it doesn't really make sense he had 12k neg and then got 14k discount but you make no mention of his deposit I'd be astounded if that deal could be done as effectively the discount is 26k if a deposit wasn't given with the new deal.

Sorry to hear this OP.

I do agree with Wills sentiment. I believe negative equities is absorbed into any new deal and at time of trade in/completing the deal. Whoever you you but the new car from settled the finance as Wills says on the trades in car, that finance agreement therefore won't exist anymore.

Seems it could get messy, hopefully a technical resolution and a little good will compensation would be a better long term resolution overall.

PS when I've said 'you' I now it's not your car, just a general term while describing.

[NotGotABimmer23]

Originally Posted by ashenfie

I suspect the new car is already worth less than the cost of settling the finance. So yes you can return the car, but will have to pay extra to settle the finance

No you dont

[JD6]

Without knowing much about car finance, it does seem very unlikely that the Audi dealer and finance company would be naive enough to create a deal which allows a buyer to get rid of £12k of negative equity on the old car simply by rejecting the new car. There would be a queue outside the dealership of people waiting to take them up on this generous offer!

[AyrshireColin]

Slightly off topic (well on topic but going off on a tangent).......I've said what I think re. the negative equity above.

Do people really carry £12k negative equity into a new car?!?! Like is this a common thing at all? It seems absolutely mental to me. I can't even really get my head round what kind of deal you must do to even find yourself in £12k negative equity!

[JD6]

Originally Posted by AyrshireColin

I can't even really get my head round what kind of deal you must do to even find yourself in £12k negative equity!

Buy a BMW?

[NotGotABimmer23]

Originally Posted by AyrshireColin

Slightly off topic (well on topic but going off on a tangent).......I've said what I think re. the negative equity above.

Do people really carry £12k negative equity into a new car?!?! Like is this a common thing at all? It seems absolutely mental to me. I can't even really get my head round what kind of deal you must do to even find yourself in £12k negative equity!

12k is a lot but an x6 is an expensive car! Obvioualy rolling that into a new deal is not a very sensible thing to do, but people will do it. Id imagine even on a competitive deal your neg equity levels on that kind of car would be huge in the first year or 2.

[Goneinsixtyseconds]

I can see an X6 being in big negative equity. My 440i is at £4k, and if I hadn't put a big deposit down I think our Q7 would at about £10k now at a year old. We're not getting rid though, so after time it evens out.

What I can't understand is why anyone would trade in a car with £12k negative equity. An A7 may be a little cheaper monthly, but with the £12k in the price it will be as much or more per month.

For every extra thousand you add on to your car, it costs roughly £23 a month per £1,000. Adding £12k in negative equity is like adding £12k of options to a car.

Whatever his monthly cost is, roughy £250-300 of it every month is just paying for his old car that's gone. Mental.

How does a person that you know personally, given your strong views on car financing, end up in a position like this?!?!

[AyrshireColin]

Yeah I perhaps framed it wrong. I know 100% how can you be £12k in negative equity.....you drive away from the garage and the VAT is away!

Goneinsixtyseconds you've nailed it - why would anyone consider trading with £12k negative is more what my thinking was. I struggle with the notion.

[skipraider]

Originally Posted by Goneinsixtyseconds

How does a person that you know personally, given your strong views on car financing, end up in a position like this?!?!

Yeah, I could imagine him having the FIL tied up in the basement until he agreed to pay cash for a lower spec 3 year old car.

Seems a bit odd.

[DB118D]

Originally Posted by AyrshireColin

Slightly off topic (well on topic but going off on a tangent).......I've said what I think re. the negative equity above.

Do people really carry £12k negative equity into a new car?!?! Like is this a common thing at all? It seems absolutely mental to me. I can't even really get my head round what kind of deal you must do to even find yourself in £12k negative equity!

You'll probably find the £12k is an amalgamation of his last 3 or 4 deals, carried forward each time

[JustChris]

Originally Posted by AyrshireColin

Slightly off topic (well on topic but going off on a tangent).......I've said what I think re. the negative equity above.

Do people really carry £12k negative equity into a new car?!?! Like is this a common thing at all? It seems absolutely mental to me. I can't even really get my head round what kind of deal you must do to even find yourself in £12k negative equity!

My man maths don't stretch to -£12k that's a harsh starting point to roll into a new deal.