Fair division of assets at end of relationship query

I'll keep this very simple and intentionally vague/genderless to get fair answers.

Alex and Sam were together for over a decade. At the beginning of the relationship Alex had a car which was leased but at the end of the agreement both partners agreed to buy a new vehicle. Alex put around 10% of the purchase price forward as a deposit, but the monthly repayments were split equally. The loan was paid off some time ago and this car is now 9 years old and worth around £4,500.

During the relationship a second car was acquired on a PCP agreement. The deposit and monthly payments for this were split equally between both partners. The relationship is now ending and there are 17 monthly payments of £385 left on the agreement, along with a £12,700 final payment.

It has been agreed that the partners will take one car each, but they have not agreed how to fairly asses the value of these and how much one might owe the other to split these fairly.

What do the great PH collective consider to be a fair agreement in this situation, assuming all external factors are entirely equal?

Car 1 £4500 - original deposit = X.

Original deposit plus 1/2 X to Alex. 1/2 X to Sam. Made easier if one of the two wants the car and just pays the other one out. But be realistic on value and don't over value it. Best bet is take it to a dealer and get a proper trade price on it.

Car 2 is a liability. It's effectively a car on hire. It's unlikely to be worth more than the final payment so it's just a hire car for £300+ a month till the contract ends. Hopefully the person who's name it's in wants to keep it till end of contract, you've both had use of it up till now, the money already paid out is gone, let the contract keeper deal with it from now on but don't expect anything back from it. It only gets messy if the person named on the contract is Sam and Sam doesn't want it, and wants to use the non existent equity of the PCP car to pay for their half of car 1.

Together for a decade and quibbling over two cars, one of which is in negative equity?

I'd just take whichever car the other person doesn't want and move on...

So in theory you would let your ex keep a £4,500 asset while you inherit a £15,000 debt? That's generous of you.

If you really want to be that way about then, whoever takes the finance car should be getting £2250 out of the first car + (17 * 385) / 2 = £3272.50 which equates to half the remaining rentals of the second car for which both partners are liable. Total of £5522.50

That would reflect that one partner is left with an asset whilst the other is left with a rental agreement to service and nothing at the end. It could be tweaked to cover the fact car 2 is no doubt nicer, but they may also get caught with additional fees on return.

As for wanting to take into account a 10% deposit after a 9+ year relationship, come on really!!, but if you must then you split the car 55/45 and apply the rentals on top.

Absolutely this. Deducting the deposit from the current value is definitely not equitable.

Or do as you say with the second car and 1 person keeps car 1 and gives the other person £2,250

I'd calculate the present value of the portfolio of cars, loans/liabilities and divide it by two. I'd value both cars at their current market price. You then allocate assets, liabilities and put in/take out cash to achieve an even split. This means ignoring the 10% deposit from 10 years ago which is going to be worth bugger all anyway. This also means agreeing that the benefit of having the newer car is fairly reflected in its current market price, which is pretty much the definition of "price" if the market is operating efficiently.

I'm also in agreement with Wrencho. You need to keep this simple, even if it's a bit of pain financially. You bought a car on finance based on your circumstances then, the circumstances changed so you need to rethink the finance. If neither of you can afford to pay the monthly payments on your own (or want to), sell it and get something else.

I think you need to ask the question of what's fair. And the second car is a key player because that is an absolute millstone when a relationship splits up. Personally I'd write the deposit off as long as there were no aggravating factors that made me want to push some misery back, if it was just a straight grown apart situation I'd swallow the 3k and split the £4500 down the middle. But at the same time, you put 3k in, the car wouldn't have been possible without it, the monthly payments are gone, but I'm not convinced it's fair that 60-70% of the deposit is gone too. That said. If Alex wanted the car, Alex mainly drove the car, it was basically Alex's car, then it's only sensible that Alex shoved the 3k in at the front end and Sam should get a decent chunk of the cars value back instead of the £750 that they will get back under this arrangement.

However if Sam will take the millstone because it's in Sam's name, then Sam has just done Alex the favour of the century. So Alex would be an arse if he didn't bung Sam £2250 and move on with life. End of the day your quibbling over 1500 quid here. It's peanuts.

Whoever ends up with the millstone should end up with the better financial position, if it's Alex then it's only fair that Alex gets a decent chunk of car 1 back, especially if it's always been Sam's car and Alex effectively loaned/gave Sam 3k to buy it. Perhaps on this basis 3k and Sam keeps the car is the sensible approach.

Just sit down and both work out on a sheet of paper what each of your best and worst case scenarios are and try to draw a line somewhere down the middle where you both lose out, both winning isn't an option, just both lose a fair amount.

Don't be a dick though and try to lumber Sam with the millstone and nothing to show from car 1. Unless of course the breakup was due to Sam playing hide the rugby ball with your local club.