What to do when you want to sell kit onHP/finance

[Matthew Storrs]

Basically I bought a machine 3 months ago on 48 month finance repayments, I now think I made a bit of a mistake buying it and wondering how you go about things.

Anyone had this before? I have a nasty feeling il be losing a fair whack if I go down this route particularly as not VAT registered so the 10% and all the VAT will be lost now. But at the same time probably prefer to lose now and get the right machine rather than keep paying off for the next 45 months on the wrong machine!

[gdh]

Can you transfer the finance to the next machine to minimise fees? We use a separate finance company so it's simpler but obviously if it's with 2 dealers that's not an option. 

 

Not sure about the technicalities of transferring finance to the new owner which I would be very careful about but maybe an option because it looks like it's going to cost you heavily especially with initial depreciation. 

[Steve Bullman]

tricky one.  What is the machine, and would keeping it as a hire out machine be an option?

[Matthew Storrs]

Yes. I suppose that’s what I’m wondering. What’s the standard procedure- whether the machine can be sold and I just pay off the finance company the remaining amount, then start fresh with the new one. As you say I reckon I will lose a few £k in depreciation and all the vat on it. 

[Matthew Storrs]

1 minute ago, Steve Bullman said:

tricky one.  What is the machine, and would keeping it as a hire out machine be an option?

It’s a 1.8t digger. I bought it from new and really just too small for most of my work I seem to be getting in. generally depreciation is low but that would be over a few years not 3 months!

Hiring it out would break my heart, but I see your logic. TBH I think I just want it gone and start again with the bigger machine, I’m just figuring out the best method of loss limitation!

[nepia]

I've had minimal dealings with lease but how about putting on a big smile and speaking to the lease company, offering a 3-month extension on current payments but on a bigger machine?  If you don't ask you don't get and all that.

[Matthew Storrs]

21 minutes ago, nepia said:

I've had minimal dealings with lease but how about putting on a big smile and speaking to the lease company, offering a 3-month extension on current payments but on a bigger machine?  If you don't ask you don't get and all that.

Indeed- I think a big smile is going to be required somewhere along the line. I always have used the same finance company- independent firm so hopefully they will be kind!

 

the machine is HP hire purchase which is a bit different from lease in that I will own it once the repayments are complete. Lease you have to give it back at the end- although often there is an option to buy too.

[butters]

Could you not just sell privately saying that there is finance on the machine and they would have to clear the remaining funds with the lender first before having the machine?

[Gray git]

As far as I know you can sell a machine with hp on it and not have to tell anyone as realistically there is no way of checking unlike on a car so you could sell it privately, get the money back into your account then clear the balance on the hp and look at the loss as cheap hire for the last 3 months or expensive depending on how much its dropped by.
Personally I'd go back to the dealer I got it off if it was a new machine and start talking to them about upgrading the machine as they could be in a far better position to sell yours as a ex demo machine on your behalf and possibly give you a better price for it to sweeten a deal on a bigger unit.

[Stephen Blair]

It’s not yours to sell.

Anyone who has any common sense will ask if there’s an HP, if you say no then you are lying and at fault.

If they don’t ask and there is and you say nothing, you are lying and at fault and would be taking advantage of someone.

Call up your finance and ask for a settlement figure, if there is interest in the finance they usually add this on in a oner then your payments are knocked off that total.

So you could still have 3k plus interest to pay on a machine worth less than you paid for it.

If it’s a 0% finance deal like most offer then it’s a better situation.

Ask for the settlement, have a look around and see what it’s worth.

Hopefully it’s about the same. If someone wants it, you show them the settlement figure that’s valid up to a certain date. If you want more for it and can get more, they pay that amount to the finance and they will send you the change. Or if they trust you and it’s a mate, get them to pay you and you pay it. If less then you pay the pitfall to make it up.

Just remember, the guy who sold you it is a salesman, he isn’t in the business of buying a machine back to help you. So you might get passed straight to finance.