Hi. A bit of background.... Im in the UK..
I was brought up living in a family where my dad was lucky enough to work for a company where he was given 2 or 3 company cars at a time at a minimal cost, with fuel and insurance all paid for. He is now retired at 60+ but gets a new car every 6 -12 months from work for the rest of his and my mums life. He currently has a Range Rover Evoque, previously a Jaguar XF and next a Land rover Discovery Sport. I have been preconditioned to expect a new and up to date car at this sort of level as 'normal' and necessary for 'safety' and I struggle to except a 'cheap' car as OK to use. Number 1 question.. How can I recondition my mind to a new normal of using cheaper cars??
Because of this my and my wife have a small 2011 Suzuki Swift paid for on finance which is no longer used, so we are selling ASAP. I changed jobs 15 months ago for 11 months which created an 70 mile round trip commute. At the time I did not know I would not like it and want to leave so we bought a 2nd brand new car on finance which has insanely low running costs. The 2nd car is a Volvo V40 Diesel R-Design, officially one of the safest cars in the UK. I managed to achieve 83mpg on my work commute often, so fuel costs were low, insurance was very cheap, tax was free, and maintaince is included for 5 years. So at the time it seemed very cheap.
We now have a 3 month old son and don't really use either car (I cycle to work and my wife walks). We do need a car for visiting family and transporting the little one. We would love to get rid of both cars but it is not possible.
I know that a new car is technically significantly safer than an old car and so I cannot justify to my wife changing our brand new Volvo V40 for an older car that costs less to run. Even just for the argument that things like airbags are more likely to work properly. Yes, I will need to work for longer to pay for this car but I would happily increase the risk on my life, to decrease the risk for my son when he is in the car.
However, I cannot justify paying for a car that is 50% of our mortgage cost, which maybe gets 5000 miles use a year if that and that we do not own.
Info about the car:
Volvo V40:
https://upload.wikimedia.org/wikipedia/commons/b/b1/Volvo_V40_T4_R-Design_2014_(15100067255).jpglist price: £19000
list with interest:£22500
Monthly payments for 36 months: £348
Guaranteed value after 36 months: £9500 (I can hand back at 36 months and walk away or pay this to keep the car).
Current value: £14000
Current settlement:£16500
We are 12 months into the 36 months. So we have another £8352 to pay before we can walk away without the car and a further £9500 to keep it.
If we terminate now, we will have to pay £2500 to hand it back (16500-14000), and then find money to buy another car.
I know getting this car was a terrible idea and I am after help for how to fix this mistake and prevent it in the future so me and my wife can retire early and spend as much time with our son as possible, whilst being the best role models we can be.
I am after advice on whether I should terminate the finance early for a fine (and if that should be now or in a year etc), just hand it back at the end of the lease period and start fresh, or pay off the remainder ASAP (£17000) and keep it for as long as possible. (10 years + etc.) I will struggle to convince my wife of any change so any advice on how to do this?
Thanks for all of your advice!
