I think I've been ripped off :(

[BellaBoo0512]

Me and OH had to change cars a couple of weeks ago due to not being able to find a group 1 car seat that would fit in our old car. Because we don't have much money we had to trade in our old car and get finance to cover the rest.

When we picked the car we wanted at the garage we asked how much the interest rate would be on the finance and the guy said it was low and they would go through it all when we came to collect the car.

3 days later we went to pick the car up.. We got £750 in part exchange for our old one, this went down as a deposit for the finance, the car we bought was £2,750. When we signed the finance agreement it said our monthly repayments were £89 per month over 2.5 years. At the time we were so excited to get the car that we didn't check how much we were paying back.. Our total to pay back (bearing in mind we have only took £2,000 on finance) is £3,650.. So we have been charged £1,650 interest. That doesn't sound like low interest to me!

After we had signed it and realised what the interest rate was we told the salesman that we wasn't aware it would be so much to repay. He said that if we paid it off early then we wouldn't repay back as much. I knew I was due some money and asked what would happen if we paid a chunk of the finance off.. He said it would lower the interest.

This morning I have received a payment and rang the finance company to pay off £1,000. I asked how much would be left to pay and they replied £2,650... I explained what the guy at the car showroom said and she said that the interest is applied at the beginning of the policy and isn't worked out monthly so no matter when I settle, I will always have to pay the full amount.

So basically the guy at the car showroom has lied to us. I am so frustrated with the whole situation. I can't believe we have been charged £1,650 to borrow £2000 when we put a £750 deposit down

Is there anything I can do about it?

 

[smileyfaces]

You usually have 14 days to cancel a credit agreement...how long ago did you buy the car?

 

[BellaBoo0512]

It was 2 weeks ago today, so 14 days. Trouble is, I don't know if the place we got the car from will still have our old car hubby is going to give them a ring when he gets home from work.

I'm so stressed out with it all we were told the interest would go down if we paid a big chunk off.. The lying sod!

 

[smileyfaces]

That would never happen unfortunately. At this point I would think it is highly unlikely the finance agreement can be surrendered but I think you should defo complain to the showroom manager about how it has been missold! Ultimately you are responsible for not reading thepaperwork before signing but he shouldnt have lied in the first place. Defo complain amd see how you get on.

 

[Abz1982]

I think that also you should conact FSA or whoever will give he garage the right to offer finance, as they could be classed as having missold it to you.

I bought a computer on HP years ago, so GE paid Dell and I owed GE the money, if I paid early then my total amount to repay would go down.

Any loan I have ever had the interest is calculated at the start but it DID go down when paid off more of it off in chunks.

 

[BellaBoo0512]

I've just looked through the credit agreement (that we only received through the post after we bought the car) it states that we have 15 days to terminate the credit agreement so today would be the last day.

I don't really understand where we stand though. I wish we had of just waited a few more weeks now but I didn't know when my settlement was going to come through

It doesn't say anywhere in the credit agreement about early repayment still being the total amount. It says that we have the right to repay fully or partly and to ring a number, which is the number I rang earlier.

Looks like I'll just have to pay the full amount back

 

[Abz1982]

Hold crap..........I jsut calculated it and thats 80% interest.....................EIGHTY PERCENT.

How can that be legal? If he didnt inform you of the rate before hand how can it be legal?? I think you need to speak to CAB.

https://www.adviceguide.org.uk/engl...htm#h_about_your_rights_when_you_borrow_money

 

[wishuwerehere]

Did you sign a credit agreement?? Unfortunately the onus is on you to check the interest rate in the contract, and i think you'd have a hard time claiming it was missold if it was in a contract you signed. Again with early repayment it should be in the paperwork, if it's not then you might have something to go on?

 

[Bittersweet]

It's the same anytime you buy a car on finance unfortunately. I have 6.9% interest on mine so il pay more than the car is worth. That does seem a lot in your credit agreement it should state the % of interest you are paying.

 

[catty]

That is more interest than im paying on a car that costs £10,000!! Thats terrible. Tbh I wouldnt wait for your oh to get home incase they are closed. Phone them up tell them your really struggling with money, you were told it was a really low interest rate. Exagerate your struggling and feel it was missold and see what happens. Did you pay the extra £1000 or just call to ask about it?

 

[VikkiD]

can I ask what finance company you are with as I have dealt with a couple recently and if you pay a lump sum off they have reduced the cost as you are not accumulating the interest so this doesn't seem right

 

[misspriss]

That is not 80% interest, but it is 23.707%!! That is quite high! I don't know about standard auto loan rates outside of the US, but ours is 2.7%! (Actually, with fees and insurance it's about 3.3%, but still)

If that isn't normal, I would definitely cancel and see what you can do, that is not an acceptable amount of interest for a secured loan.

 

[dgirllamius]

Surely what you owe in interest would be stated in your contract. When I bought my car last year it had all the numbers so I knew exactly what I was getting,how my h I'd be paying back per month and how much interest I would need to pay. You should have been shown this and been given a chance to read the contract over.

To be honest I don't know what kind of leg you'd have to stand on because you should really read any contract before signing BUT does your contract actually state you owe so much in interest?

Its such a shame that you don't have enough to time to cancel it. The salesman should have made everything perfectly aware to you so you could decide on declining it. I'd give CAB a call you might still be in with a chance even though you're over the cancellation period.

 

[BellaBoo0512]

Sorry I'm only just replying..

My husband rang the place we bought the car from last night and the salesman that sold us the car is still saying that our interest should go down a lot if we pay £1,000 off.

My husband then rang black horse (the finance company) and they are still saying that no matter if we pay our finance off early we will still have to pay all of the interest.

By the time he got off the phone to the finance company the car place had closed so we are going to go there tomorrow when hubby gets home from work and get the salesman to ring the finance company why we are there.

I've got a thing here with the exact numbers on and they just don't seem right to me.. I'll take a photo and try to upload it now x

 

[BellaBoo0512]

These numbers just don't seem to work out right to me

We only received this through the post 1 week after buying the car. When hubby signed the contract agreement he didnt sign the actual agreement, it was an electronic signature pad.

 

[dgirllamius]

It seems to me that you are not paying much in interest. You need to look at the breakdown of it all.

So you borrowed 2862.75 and part exchanged at 750, so you then borrow 2113.75.

You then get charged 461.58 for taking out credit in the first place, the other charges of 195, 135 and 10. All these add up to 801.56. So the total credit you have taken is 2914.33. The interest appears to be around 600ish.

It's not the interest that's making it look high, it's those charges.

 

[BellaBoo0512]

But it says total amount payable A + D which includes the deposit.. Shouldn't it be total payable C + D?

 

[dgirllamius]

It seems to me that you would have to pay back E. F is just the total without deposit. But you've already paid this part.

If you take the 2914.33 and add 750, you will have the total of F. But seeing as you have already paid the 750, your actual repayment total is E and not F.

 

[BellaBoo0512]

The finance company is saying we owe £3,600 altogether

I'm so confused by it all hopefully the garage will be able to sort it out for us.. we wasn't even aware of any charges until this came in the posf.. surely they should of give us the credit agreement to read through before signing an electronic pad.

 

[Almostmom]

Hi, sorry about the stress. How did you get to the total of £3650? There's no way £89 could amount to that in just 30 payments.