For the most part, a car is a practical luxury. Some people need a car to get to work as an essential, but it’s still a luxury expense every month when you want to avoid the public transportation system. A lot of people go above and beyond when it comes to their car; adding tech features and glitter rims to make it look better. Adding DVD players, built in sat-nav and parking sensors are all lovely – if you can afford the upkeep.
When you’re in a position where you can no longer afford to maintain luxury cars, you need to look at downgrading. Firstly, life happens to get in the way sometimes and divorce, loss of income and a downturn in your finances can affect your ability to keep up the repayments on a car that you’ve piled money into. It’s always better to look at your options if you find yourself stuck with a beautiful sports car that you can no longer use. Once you are ready to look at the issue head on, there are some options available for you so that you can manage.
Take The Car Back To The Dealer
Going from a sports car like a Ferrari or a Lamborghini to a more ordinary model can feel like a kick in the teeth, but it’s better to have A car than THE car! If you’re currently paying off your car with a dealership, return to the dealer in question and check out your trade in options. Putting your sports car back on the forecourt and downgrading to a more ordinary model may be better than going without.
Refinance
You may well have taken out a loan on your car, and refinancing at a much lower rate can make a huge difference to your wallet. You may be able to keep your car but have a longer loan period with a higher interest rate. While that’s not ideal, it’s better than giving your car up!
Sell On
Selling your car can only happen if you bought it outright in the first place. You don’t want to have the responsibility of trying to sell a car that you are still paying for! Selling your car allows you to pay off the loan entirely, taking you out of debt and giving you the opportunity to get finance for another model.
If you’re in a position where you have leased your car, you don’t own it and therefore cannot sell it. You can bring your car back to the dealer, you’ll lose the money that you paid for the car up front and you’ll have to pay a recapture fee. It’s not the most ideal situation, but if you can, you can transfer your lease to someone else. It’s very important to take a look at your finances before you commit long term to a car or any other hire purchase. Life happens sometimes, so don’t beat yourself up if you’d already weighed all the risks and it didn’t turn out the way you thought it would.
