Negative Equity Car Finance

What is Negative Equity?

Negative equity occurs when the current value of your car is less than the amount needed to pay off its finance. As cars usually lose value faster than you're paying off the finance balance, you're in negative equity for most of the contract, and it’s only paid and up-to-date at the end of the contract, once the deposit and all monthly payments are complete.

What is Negative Equity Finance?

Negative Equity Finance, HP+, is a great product for those would like to purchase a vehicle, but have negative equity on their current vehicle, and need help to clear it. Creditas can help customers afford a little extra with a combination Hire Purchase (HP) and personal loan

Our HP+ product delivers up to 130% of the CAP retails value. Up to 100% of the retail price plus £1000 can be placed on the HP component, with an additional 50% of the retail price placed on the Personal Loan component. With the Personal Loan, the customer can settle a previous finance agreement (contra-settlements), and vehicle extras/accessories.

What are the Pros & Cons of Negative Equity Finance?

• Both components of the finance, HP & Personal Loan, are combined into a single monthly payment
• The amount of deposit is up to the customer, as there is no expected minimum or maximum
• The first payment isn’t due until a month after the agreement starts, although the interest is calculated from the day the agreement starts
• Repayment terms are flexible to suit the customer’s budget, from one to five year
• Interest rates are fixed for the length of the finance term so customers are aware of monthly costs
• The HP and Personal Loan elements can be settled together, when requested
• Once the finance agreement is paid off, and the option to purchase fee is paid, the vehicle legally transfers to the customer
• If all of the repayments aren’t made, as agreed in the contract, the vehicle can be repossessed
• The vehicle cannot be sold or given away until all of the repayments have been made