No longer being able to afford car repayments

[Keyser Soze666]

Call it default, but IF one can no longer afford the car repayments and you tell the finance company this, how does it work exactly?

 

So say you bought a car for Bt1 mil 2 years ago and in that 2 years you have paid off half the value (500k) How would it work, would you just lose the car and that's it, or would some cash be coming your way back at some point since on paper you own half the motor?

 

Asking for myself NOT a friend. I'm genuinely not in this position now and hope not to be, but it's worth knowing incase it does come to this later down the track.

[steven100]

The Bank or finance company will want to recover the total amount owing which is the payout figure.

If you owe 500K still then the bank or FC will take court action to recover the amount owed.

The LED ( legal execution dept')  will auction the car and the amount will be deducted from the final payout figure that's required. Then, if that's not sufficient, they will auction what other assets you may have to get the money owed back.  

[Keyser Soze666]

Right ok. What if they auction the car and get say 750k for it, would 250k then come back to you?

[innosiem]

2 minutes ago, Keyser Soze666 said:

Right ok. What if they auction the car and get say 750k for it, would 250k then come back to you?

no,
on paper the car never belonged to you
ownership is transferred when car is fully paid for
all you own is the debt

[Pilotman]

2 minutes ago, Keyser Soze666 said:

Right ok. What if they auction the car and get say 750k for it, would 250k then come back to you?

The person paying for the car on finance does not own the car, they are in effect renting it until the final payment is made,  the finance company own the car, therefore all things being equal, nothing will come back to the 'renter'.  

[jvs]

1 minute ago, blackcab said:

That is assuming the vehicle ownership document is in your name.

If you are making payment to a finance company the car will not be in your name.

[Keyser Soze666]

1 minute ago, Pilotman said:

The person paying for the car on finance does not own the car, they are in effect renting it until the final payment is made,  the finance company own the car, therefore all things being equal, nothing will come back to the 'renter'.  

I know that, same as a house with a mortgage, why i said 'on paper'

 

Anyway, some say you will get some back, if in 'profit' but others saying you don't.

[blackcab]

1 minute ago, Keyser Soze666 said:

Anyway, some say you will get some back, if in 'profit' but others saying you don't.

 

Whose name is on the car ownership document?

[Pilotman]

1 minute ago, Keyser Soze666 said:

I know that, same as a house with a mortgage, why i said 'on paper'

 

Anyway, some say you will get some back, if in 'profit' but others saying you don't.

you (they) won't, end of. 

[Keyser Soze666]

Just now, blackcab said:

 

Whose name is on the car ownership document?

The wife's, of course. That isn't important though, just generally trying to find out how it works.

[Keyser Soze666]

Just now, Pilotman said:

you (they) won't, end of. 

If that is the case then fine, just want to know.

[Pilotman]

1 minute ago, blackcab said:

 

Whose name is on the car ownership document?

Try selling it and defaulting on the remaining debt, plus interest.  You will then find out who the real owner is. 

[Keyser Soze666]

2 minutes ago, Pilotman said:

you (they) won't, end of. 

So if there is any profit after sale that goes to the finance co?

[Pilotman]

5 minutes ago, Keyser Soze666 said:

So if there is any profit after sale that goes to the finance co?

usually, they will try to off load the car quickly, inevitably at a reduced price.  Obviously, any 'profit' will go to them, but there will not be any excess cash from such a sale, as to them its a loss of interest that would have been paid over the remaining years.  Add depreciation and it will always come out negative.  What's worse is that repossession doesn't mean that the debt is cancelled.  If the calculation of loss exceeds the sale price, that will remain a debt to be paid by the 'renter'.  

Edited July 1, 2020 by Pilotman

[robblok]

Its best to try to sell the car with finance. This can be done at times. That way you can maybe get some of the profit your way. The finance company has to agree to this. Also the other buyer must be checked. 

 

Its not easy but it can be done. 

 

*edit*

 

But 2 year old car just paid of 500K not sure how much you could sell it for in the current market. So maybe there is no profit at all. Maybe even an extra loss. 

Edited July 1, 2020 by robblok

[Keyser Soze666]

5 minutes ago, Pilotman said:

usually, they will try to off load the car quickly, inevitably at a reduced price.  Obviously, any 'profit' will go to them, but there will not be any excess cash from such a sale, as to them its a loss of interest that would have been paid over the remaining years.  Add depreciation and it will always come out negative.  What's worse is that repossession doesn't mean that the debt is cancelled.  If the calculation of loss exceeds the sale price, that will remain a debt to be paid by the 'renter'.  

Yes, know what you mean. there is never going to be a 'profit' in a million years is there.

 

This type of thing must happen a lot over here when you see how many new cars are on the roads?

[Pilotman]

Just now, Keyser Soze666 said:

Yes, know what you mean. there is never going to be a 'profit' in a million years is there.

 

This type of thing must happen a lot over here when you see how many new cars are on the roads?

I think it does. 

[Dumbastheycome]

Not  really sure  about how it works  in Thailand  but  in general terms  for default on financed assets debt recovery is foccused  on the  debt only. Which means  that despite  laws the forced  debt collect sale  is  satisfied  by retrieving the debt . Failing that  and/or additional  costs remain with the debtor.

So thinking  that  ok, take it away, may  not  be the end of the debt.

I have never used  credit  to purchase a single  damn thing !

 

 

Edited July 1, 2020 by Dumbastheycome
Additionals

[kingdong]

these baliffs and repossession companies have got more fiddles going than the london philamornic,they,ll tell you they got some right low price when its been sold to a mate who repays the gesture with a brown envolope,try not to get in this situation as legal costs can escalate your debt to unbeliveable levels,good luck.

[timendres]

33 minutes ago, Keyser Soze666 said:

I know that, same as a house with a mortgage, why i said 'on paper'

 

Anyway, some say you will get some back, if in 'profit' but others saying you don't.

Actually, it is not the same as a mortgage on a house. In the case of a mortgage, I obtain ownership of the house, and the house and property are in my name. However, the house is listed as the collateral for the mortgage. In this case, if I default, and the house is sold, once the mortgage is settled, I am entitled to any remaining equity. At least in the US.

[aldriglikvid]

1 hour ago, timendres said:

Actually, it is not the same as a mortgage on a house. In the case of a mortgage, I obtain ownership of the house, and the house and property are in my name. However, the house is listed as the collateral for the mortgage. In this case, if I default, and the house is sold, once the mortgage is settled, I am entitled to any remaining equity. At least in the US.

Working at a bank I can confirm that this is the common practice in most western countries; the title ("ownership") of a house (land, really) is with a real person(s). Finance setups, such as car finance, is almost always in the banks name. 

Your best way of action would be to try sell it yourself. Break-up fees and interest will occur, but if you're confident of the price it should be a better deal. Good luck mate. Hope you do well. 

[FritsSikkink]

2 hours ago, blackcab said:

 

Whose name is on the car ownership document?

The company who financed the loan. 

[Kwasaki]

13 hours ago, Keyser Soze666 said:

how does it work exactly?

Best sell it yourself and pay off in full, otherwise you could end up still owing money on it.

[Keyser Soze666]

1 minute ago, Kwasaki said:

Best sell it yourself and pay off in full, otherwise you could end up still owing money on it.

Can you do that if under finance, pretty sure you cannot?

 

As I said in my OP, i'm not in that position right now,  just gaining knowledge just incase I am later.

[KamnanT]

16 minutes ago, Kwasaki said:

Best sell it yourself and pay off in full, otherwise you could end up still owing money on it.

The OP could certainly attempt to locate a buyer but s/he cannot transfer ownership of a vehicle s/he does not own.  The buyer would have to prepare two bank cheques: one for the loan payout amount to the finance company and one for any remaining amount to the seller.  Buyer gives first cheque to finance company, who transfers the vehicle into the buyer's name, then the seller gets the second cheque.  This can be a time-consuming process (depending on the finance company) and I suspect many buyers would be put off.  Easier to purchase a car that has no finance on it.

[Keyser Soze666]

5 minutes ago, KamnanT said:

The OP could certainly attempt to locate a buyer but s/he cannot transfer ownership of a vehicle s/he does not own.  The buyer would have to prepare two bank cheques: one for the loan payout amount to the finance company and one for any remaining amount to the seller.  Buyer gives first cheque to finance company, who transfers the vehicle into the buyer's name, then the seller gets the second cheque.  This can be a time-consuming process (depending on the finance company) and I suspect many buyers would be put off.  Easier to purchase a car that has no finance on it.

That's interesting. I take your last point, but if the buyer has their heart set on a certain car they may be prepared to be patient with the process.

 

Also, if the buyer fully trusts the seller they can send the seller the money who in turn pay off the finance co?

[AndyAndyAndy]

One of the local farangs bought a second hand car from one of these second hands shop. After a while he wasn't able to make payments. So they took the car back and gave him 20 000 Baht.  Which I understood was an amount based on how many payments you already did.

 

Maybe the best solution would be contact the bank/leasing company and ask them directly?

[Kwasaki]

2 hours ago, Keyser Soze666 said:

Can you do that if under finance, pretty sure you cannot?

 

As I said in my OP, i'm not in that position right now,  just gaining knowledge just incase I am later.

Well we have done it twice as long as your buyer is happy to go along with you settle finance and then gives you what's over in cash.

 

If you can't and can't pay if the finance company repossesses the vehicle be prepared to most probably be still in debt, depending on how works out.

 

For one family member it was not good, they hate me for not helping them.

 

Edited July 2, 2020 by Kwasaki

[Don Mega]

16 hours ago, Keyser Soze666 said:

The wife's, of course. That isn't important though, just generally trying to find out how it works.

Your wife's name is Mrs Finance Company ?

[Keyser Soze666]

11 minutes ago, Kwasaki said:

Well we have done it twice as long as your buyer is happy to go along with you settle finance and then gives you what's over in cash.

 

 

 

I assume the finance co won't care who the money comes from, ie the new buyer?