Hello Jimuc.

I think that your trustee will take a practical view on this, not least because you need the car to get to work which then funds your trust deed.

Only your trustee can answer your question, but I'd be surprised if they weren't supportive about a proposal from you that didn't affect your ability to maintain your trust deed payment and did mean that you could keep the vehicle.

How much is the car worth?

Hi Jimuc,

As TDA has advised ideally the Trustee will want to ensure that you can support your monthly payments to the Trust Deed so should be prepared to work with you on this.

Extending the finance could be an option. The difficulty might be your credit rating and ability to borrow more finance against the car. You could also look at handing the car back and either taking on a new vehicle on finance or leasing a car. Again though the issue over your credit rating might be problematic. Could be a good idea to touch base with a few garages about this and maybe some research online about car finance balloon payments. If you did go down this route and take out finance and were successful in obtaining it you want to pay close attention to how much interest you will pay back.

The option of having a family member clear the finance and then you pay that person back might also work. One potential issue could be that you might therefore have a vehicle that is free of finance and worth more than £3,000 in value which then could be classed as an asset.

It’s something which you would need to speak with your Trustee about. Whatever option you decide to proceed with just make sure you get your Trustee to confirm in writing that they are happy with it.

Thanks all.
It's really helpful having you here to ask these types of questions.
Regards Jimuc

David.
Can you please clarify your thoughts on the car being seen as an asett? The loan from my mother will cover the £5500 that is still owed. The car will be worth this figure. I will not get Finance and need the car for work.
If I pay the loan back to my mum then the car may be free of Finance but money owed to the family loan.
Regards Jimuc

Hi Jimuc.

The point David is making is an important one here.

As there's secured finance on the car at the moment you do not own it. It's therefore not an asset.

If a relative pays the balloon payment on your behalf you'd potentially become the owner. It is now your asset (even though you expect to repay your mother the balloon payment).

Because the car is worth more than £3,000 you'd potentially have an additional liability to your trust deed.

Thank you again.
Regards Jimuc