Must I continue to pay off the loan on a car I'm scrapping?

I have an old car which has a loan secured against it. The engine has blown up and the car is really only fit for scrap. However the outstanding loan amount is greater than the car is worth as scrap, and I cannot afford to pay it off. Where do I stand?

Asked on 14 July 2010 by tigraboy

Answered by Honest John

You have to pay it off. This isn't like a car bought on HP where you can pay off 50 per cent and walk away. If the finance company cannot recover its money by selling your car it may come after you for the rest, get a court order and send the bailiffs in.

Tags: scrapping

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