Moneybarn car loan

Solcom · 12 July 2017 at 9:45AM

Hi,
In march 2016 i borrowed £9500 from moneybarn for a 2008 MERCEDES CLS.
I paid £320 a month until december 2016 when i lost my job unexpectadly.
I had paid £2880 in total
I told moneybarn what had happened and that i would hopefully be back working soon as i am a highly skilled engineer.
Moneybarn werent really interested and said they eould start court proceedings anyway.
At the end of february 2017 i set up my own business and told moneybarn payments will resume at the end of march.
Moneybarn said that only way i could keep it is if it went to court for some kind of control order and that this will cost me an additional £1500 plus the 3 months arrears of £960 so this would now put my monthly cost upto £450
I told them no way was i excepting this extortion and wouldnt agree to it.
Eventually i agreed to surrender the car back to them as they told me they wouldnt just sell it for anything and a reserve would be put on vehicle in auction.
After letting the car go back which was still low mileage and in excellant condition with full service history etc i got a letter saying the reserve would be set at £3000 which is half its trade value.
Its eventually been sold at auction for £4100
The trade price is £6200 and retail is £8000
Ive now received a letter from moneybarn telling me i know have to pay the balance of £11000
How can i still owe this amount? Thats still more than the actual cost of car 12 months ago even after £7000 has been paid in last 12 months!
This amount cant be a reasonable figure?

Thanks

Paul

[Deleted User] · 12 July 2017 at 9:51AM

Solcom wrote: »

This amount cant be a reasonable figure?

It can. But you'd need to provide a detailed breakdown of payments, rates and a timeline to know for sure.

StopIt · 12 July 2017 at 9:55AM

Do you have a costs breakdown stating how you owe the money?

It'll be the fact that Moneybarn charge high APR (33% Representative, yikes) + Reposession fees + costs + auction fees.

It isn't reasonable, but that's how it works.

For reference, you borrowed £9500 for a term of what looks to be 5 years at their headline rate (Correct me if I'm wrong).

That means the total finance cost is £19,505.41

You've paid £7000 inc the car, so actually, they've likely written a bit off because just the finance would have had a £12,000 shortfall.

What was the actual APR on the loan, that'll tell you how much of this amount is the loan shortfall and how much is fees etc.

Pixie5740 · 12 July 2017 at 10:03AM

Have you asked Moneybarn for a breakdown of all the costs?

Moneybarn have a representative rate of 32.6% APR :eek: so assuming you achieve the representative rate monthly payments of £320 suggests you took the loan over 5 years.

If you made 10 payments in full and on time between March 2016 and December 2016 that would give you an outstanding balance of £8,878.20 in November 2016. From your £320 payment only £60 to £70 was repaying the capital the rest was interest so most of the original loan amount will still be outstanding. The add to that extra interest from the arrears plus late payments then it's not inconceivable that you will owe more than the amount originally borrowed. However, £11k plus whatever the car was auctioned for sounds incredibly steep that's not to say that it's incorrect though.

Solcom · 12 July 2017 at 10:22AM

My outstanding balance is £9891 including all there costs and fees and my payments made and the selling of the vehicle.
Theyve offered a settlement figure of £6926.86 but this has to be paid in full before 20th july 2017 or the full amount must be paid
Im already struggling due to starting up my business and having to lease a vehicle for this as im a nationwide mobile engineer so have no way of paying even a small percentage of the settlement figure realistically

StopIt · 12 July 2017 at 10:46AM

Solcom wrote: »

My outstanding balance is £9891 including all there costs and fees and my payments made and the selling of the vehicle.
Theyve offered a settlement figure of £6926.86 but this has to be paid in full before 20th july 2017 or the full amount must be paid
Im already struggling due to starting up my business and having to lease a vehicle for this as im a nationwide mobile engineer so have no way of paying even a small percentage of the settlement figure realistically

In which case, you're counting the costs for using a high cost credit facility I'm afraid.

If you can't pay or raise the funds to settle the debt, they'll likely go for a CCJ to enforce the debt as it's a significant sum.

Pixie5740 · 12 July 2017 at 11:00AM

My advice is to call National Business Debtline. I know these are not business related debts but they help self employed people who are struggling with debts.

https://www.businessdebtline.org

Solcom · 12 July 2017 at 12:01PM

Yeah will give them a ring, thanks pixie.
Too me moneybarn have been just as bad as a payday loan company with all there ridiculous charges end extra costs just because i was unlucky enough to loose my job.
I could and would have started paying again after 3 months and eventually cleared it all if it wasnt for there attitude and bullying tactics. It was if they actually wanted me to end up in this situation😐

Paul

System · 12 July 2017 at 12:30PM

You agreed to a deal and a contract when you signed on the dotted line. You knew what the rate was, you knew the total amount you would repay, you knew the consequences of not paying.

The fault is not with the lender but with you for taking on exorbitant lending that lets face it you couldn't actually afford because had you been able to then you would have been able to get a far better rate from another lender and also cover the three months payments when you ended up unemployed.

Your comment about attitude and bullying is merely you trying to deflect attention from the fact that you signed up to an agreement and welched on it. The sooner you start facing up to the fact that things go wrong because of your own actions/inactions and that the responsibility for the ramifications lie at your table and not the other party who is merely honouring the deal struck the better your life will be because you'll hopefully think twice before signing up to such a deal in the future.

Pixie5740 · 12 July 2017 at 2:06PM

To be fair the £1500 for a "control order" sounds like BS. 3 months arrears isn't great but it's not the worst either. I doubt Moneybarn would have been able to do much in terms of getting this to court before the OP started paying again. That is unless Moneybarn had some sort of device fitted in the car that could remotely disable the engine when there were arrears.

Solcom · 12 July 2017 at 2:51PM

Tarambor
I had to go with moneybarn and there extortionate rates thanks to my ex partners destruction of my credit between 4 and 6 years ago.
I had no problem at all meeting the payments until i lost my job.
Sometimes people have no choice than to use these kind of lenders and getting into financial difficulties can happen to any of us

Moneybarn car loan

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