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  • FIRST POST
    • Solcom
    • By Solcom 12th Jul 17, 9:45 AM
    • 5Posts
    • 1Thanks
    Solcom
    Moneybarn car loan
    • #1
    • 12th Jul 17, 9:45 AM
    Moneybarn car loan 12th Jul 17 at 9:45 AM
    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
Page 1
    • zx81
    • By zx81 12th Jul 17, 9:51 AM
    • 12,465 Posts
    • 12,632 Thanks
    zx81
    • #2
    • 12th Jul 17, 9:51 AM
    • #2
    • 12th Jul 17, 9:51 AM
    This amount cant be a reasonable figure?
    Originally posted by Solcom
    It can. But you'd need to provide a detailed breakdown of payments, rates and a timeline to know for sure.
    • StopIt
    • By StopIt 12th Jul 17, 9:55 AM
    • 670 Posts
    • 614 Thanks
    StopIt
    • #3
    • 12th Jul 17, 9:55 AM
    • #3
    • 12th Jul 17, 9:55 AM
    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
    • By Pixie5740 12th Jul 17, 10:03 AM
    • 10,591 Posts
    • 14,565 Thanks
    Pixie5740
    • #4
    • 12th Jul 17, 10:03 AM
    • #4
    • 12th Jul 17, 10:03 AM
    Have you asked Moneybarn for a breakdown of all the costs?

    Moneybarn have a representative rate of 32.6% APR 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.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • Solcom
    • By Solcom 12th Jul 17, 10:22 AM
    • 5 Posts
    • 1 Thanks
    Solcom
    • #5
    • 12th Jul 17, 10:22 AM
    • #5
    • 12th Jul 17, 10:22 AM
    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
    • By StopIt 12th Jul 17, 10:46 AM
    • 670 Posts
    • 614 Thanks
    StopIt
    • #6
    • 12th Jul 17, 10:46 AM
    • #6
    • 12th Jul 17, 10:46 AM
    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
    Originally posted by Solcom

    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
    • By Pixie5740 12th Jul 17, 11:00 AM
    • 10,591 Posts
    • 14,565 Thanks
    Pixie5740
    • #7
    • 12th Jul 17, 11:00 AM
    • #7
    • 12th Jul 17, 11:00 AM
    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
    Last edited by Pixie5740; 12-07-2017 at 11:07 AM. Reason: adding link
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • Solcom
    • By Solcom 12th Jul 17, 12:01 PM
    • 5 Posts
    • 1 Thanks
    Solcom
    • #8
    • 12th Jul 17, 12:01 PM
    • #8
    • 12th Jul 17, 12:01 PM
    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
    • Tarambor
    • By Tarambor 12th Jul 17, 12:30 PM
    • 877 Posts
    • 583 Thanks
    Tarambor
    • #9
    • 12th Jul 17, 12:30 PM
    • #9
    • 12th Jul 17, 12:30 PM
    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.
    Last edited by Tarambor; 12-07-2017 at 12:32 PM.
    • Pixie5740
    • By Pixie5740 12th Jul 17, 2:06 PM
    • 10,591 Posts
    • 14,565 Thanks
    Pixie5740
    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.
    Last edited by Pixie5740; 12-07-2017 at 2:10 PM.
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • Solcom
    • By Solcom 12th Jul 17, 2:51 PM
    • 5 Posts
    • 1 Thanks
    Solcom
    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
    • robber2
    • By robber2 12th Jul 17, 2:58 PM
    • 246 Posts
    • 187 Thanks
    robber2
    You were free to choose a much cheaper car; £9500 is a crazy sum to borrow at a high APR when something for a tenth of the price would have done just as well.

    Rob
    • 27cool
    • By 27cool 12th Jul 17, 3:09 PM
    • 247 Posts
    • 185 Thanks
    27cool
    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.
    Originally posted by Tarambor
    Don't beat about the bush, Tarambor. You just tell it as it is.
    • Potbellypig
    • By Potbellypig 12th Jul 17, 3:59 PM
    • 94 Posts
    • 33 Thanks
    Potbellypig
    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
    Originally posted by Solcom
    Do Moneybarn only sell £9.5k Mercs then?

    You took on credit that you couldn't easily afford to pay back should the worst happen. Many people have been there so beat yourself up about it. However, you have made a legal obligation to pay this money back to the lender, therefore you need to suck it up and come to an arrangement to pay it back. Else they will take you to court and you'll have this hanging around for a long time.
    • takman
    • By takman 12th Jul 17, 4:06 PM
    • 2,393 Posts
    • 2,011 Thanks
    takman
    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
    Originally posted by Solcom
    Yes it can so that's why you should always have an emergency fund saved up. This should be a priority so instead of taking out a £320 a month credit agreement you should have been saving that up until you had a reasonable amount.

    Hopefully now you have realised how important it is to have some savings and will start to build some up now your earning money again.
    • boliston
    • By boliston 12th Jul 17, 7:07 PM
    • 2,265 Posts
    • 1,813 Thanks
    boliston
    I think my main worry with a merc would be maintenance costs - one of my workmates has a merc and the servicing costs make my eyes water!
    • Solcom
    • By Solcom 14th Jul 17, 3:45 PM
    • 5 Posts
    • 1 Thanks
    Solcom
    Yeah ive learned my lesson although if they had just let me carry on paying as normal after clearing my 3 months arrears i would have done, but they seemed to be hell bent on adding all kinds of extra charges and penalties and putting up my monthly cost.
    The servicing wasnt bad at all as nothing went wrong with it in the time i had and what it did need cost a lot less than it did for my previous cheap mondeo and saab.
    I now lease a brand new 40k E class threw my new business��
    • Shakin Steve
    • By Shakin Steve 14th Jul 17, 7:00 PM
    • 821 Posts
    • 609 Thanks
    Shakin Steve
    Yeah ive learned my lesson although if they had just let me carry on paying as normal after clearing my 3 months arrears i would have done, but they seemed to be hell bent on adding all kinds of extra charges and penalties and putting up my monthly cost.
    The servicing wasnt bad at all as nothing went wrong with it in the time i had and what it did need cost a lot less than it did for my previous cheap mondeo and saab.
    I now lease a brand new 40k E class threw my new business��
    Originally posted by Solcom
    That last sentence comes across as rather smug. Let's hope your business doesn't go tits up, or you'll really be in it, won't you?
    I came into this world with nothing and I've got most of it left.
    • k3lvc
    • By k3lvc 14th Jul 17, 7:16 PM
    • 1,739 Posts
    • 2,676 Thanks
    k3lvc
    I now lease a brand new 40k E class threw my new business��
    Originally posted by Solcom
    Presumably you agreed this before realising the previous debt you thought you'd got away with came back to haunt you
    • bazzyb
    • By bazzyb 14th Jul 17, 8:07 PM
    • 992 Posts
    • 3,152 Thanks
    bazzyb
    How can i still owe this amount?
    Originally posted by Solcom
    Because you didn't make the payments you agreed to. If you had to use Moneybarn in the first place, then I am assuming that you have had previous defaults and/or CCJs so will have known exactly what the consequences would be if you didn't keep up repayments. Correct me if I'm wrong on this but if that is not the case then there should have been better lending options available to you.

    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
    Originally posted by Solcom
    If you have absolutely no intention of paying "even a small percentage", then why do you care if the settlement figure is reasonable or not?
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