Car finance company wont stop interest
keithboy40
Posts: 303 Forumite
I am seeking advice for my daughter. She currently has a debt management plan, however her car finance company has refused to stop the interest. She has offered to hand the car back, however they refused to take it. She is currently paying off £20 a month, but the interest per month is much higher. Her load was at £13000 when she started and 2 years later it is not £17000. at the same tine the cars value is depreciating. What option does she have?
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Hi,
Well they should work with your daughter and cooperate with the DMC company aswell, if they are refusing to help or atleast reevaluate the affordability of the finance then raise a complaint, they have a max of 8 weeks to offer a resolution which if you are not happy with you can decline and got to the financial ombudsman who can review the case and force the finance company to follow the guidelines set by the FCA.
Its also worth just talking to someone on the phone about it, advise you are willing to go to the FOS and report this and you want to raise a complaint, they are charged for any cases brought against them so often try and resolve it with you directly.
Hope this helps.0 -
keithboy40 wrote: »I am seeking advice for my daughter. She currently has a debt management plan, however her car finance company has refused to stop the interest. She has offered to hand the car back, however they refused to take it. She is currently paying off £20 a month, but the interest per month is much higher. Her load was at £13000 when she started and 2 years later it is not £17000. at the same tine the cars value is depreciating. What option does she have?
without interest £20 a month will take 850 months or 70.8 years. Daft situation really.
Obviously returning he car depreciated will lose them money, although mitigate a loss on a bed debtor. Rather that then she go bankrupt and them lose more.
Perhaps you could pay off the loan, sell the car and thenshe can pay you back ?0 -
surely if she does a voluntary termination then they legally have to collect the car and charge her 50 percent of the finance less any installments already paid0
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surely if she does a voluntary termination then they legally have to collect the car and charge her 50 percent of the finance less any installments already paid
Yes, if it's hire purchase or conditional sale, which it usually is.
The finance company's attitude suggests this is a loan. OP needs to check paperwork.
If it's hire purchase or conditional sale, there's a VT letter here
https://www.nationaldebtline.org/EW/sampleletters/Pages/Terminate-a-hire-purchase-agreement-%28sole-name%29.aspx0 -
It would appear the car company that sold her the car sold it on a loan finance. How does she stand now.0
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The car is hers to do what she wants with.
The loan company should be reminded of The Standards of Lending Practice:
9. Firms should consider reducing or freezing interest and charges when a customer is in financial difficulty.
and CONC 7.3.5:
(1) considering suspending, reducing, waiving or cancelling any further interest or charges (for example, when a customer provides evidence of financial difficulties and is unable to meet repayments as they fall due or is only able to make token repayments, where in either case the level of debt would continue to rise if interest and charges continue to be applied);
As neas says, a 70-year dmp does not make much sense. Is this with a fee-charging debt management company, by any chance?
Maybe run the whole situation past National Debtline or CAB?0
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