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  • FIRST POST
    • theNbomb
    • By theNbomb 30th Nov 17, 1:31 PM
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    theNbomb
    Car finance conundrum...
    • #1
    • 30th Nov 17, 1:31 PM
    Car finance conundrum... 30th Nov 17 at 1:31 PM
    Hi Guys,

    A friend of mine agreed to purchase an 'approved used' car from a main Mercedes dealership back in February this year. He originally planned to take finance on the car and pay it monthly. He set the wheels in motion for the finance, the application went through and he was due to collect the car the following week. He was under the understanding that the £18,000 figure for the car was included the interest etc.

    The following day he was advised that (since he had the money in the bank) it would be better to just buy it outright, not pay the interest and he would be able to sell it at any point if he wanted etc. He then called Mercedes and cancelled the finance and requested to just pay the sum outright. They came back with the sum of £14,000 to purchase the car, he paid over the phone with a card and collected the car a few days later, patting himself on the back for not taking the finance and saving £4000 in the process.

    Within a week (Feb 2017) he received a letter from Mercedes stating that the payment had been completed, and no outstanding money was owed.

    Fast forward to yesterday (29th November 2017 - 10 months later) and he received a call from Mercedes advising that there was a mistake back in Feb 2017 and they only charged him £14,000 but should have been £18,000. They are now requesting that he pay the difference as soon as possible.

    It seems likely that the £14,000 figure was probably what they paid for the car, and they were supposed to sell it at £18,000 for a £4000 profit, but they accidentally sold it to him at trade price.

    Where does he stand legally with this? He has been driving the car daily for the best part of 10 months and has a hand-signed letter from the dealership stating that no outstanding money is owed.

    Worst case scenario, can he just hand the car back and get his money back? He does not currently have access to the £4000 they are demanding.

    Any help or advice would be greatly appreciated!

    Thanks
Page 1
    • neilmcl
    • By neilmcl 30th Nov 17, 1:47 PM
    • 10,287 Posts
    • 7,213 Thanks
    neilmcl
    • #2
    • 30th Nov 17, 1:47 PM
    • #2
    • 30th Nov 17, 1:47 PM
    I'd say it's tough on Mercedes. They offered to sell the car at £14K, he agreed and payment was made and accepted. I can't see that they'll be able to get any money from your mate after 10 months, even if they took him to court, which I very much doubt they will.

    Did he receive an invoice, or any paperwork for that matter with the £14k price mentioned?

    FYI, the sale price of a car and the finance are totally separate and the selling price will never include interest, only the figures in the finance agreement will do this. I don't think your friend is that naive to believe the reason the selling price dropped to £14K was because of the finance element being removed, I suspect he thought all his Christmases had come at once and took advantage but as I said, on the face of it, it seems to be tough luck for the dealership.
    Last edited by neilmcl; 30-11-2017 at 1:54 PM.
    • motorguy
    • By motorguy 30th Nov 17, 2:14 PM
    • 15,814 Posts
    • 9,095 Thanks
    motorguy
    • #3
    • 30th Nov 17, 2:14 PM
    • #3
    • 30th Nov 17, 2:14 PM
    Hi Guys,

    A friend of mine agreed to purchase an 'approved used' car from a main Mercedes dealership back in February this year. He originally planned to take finance on the car and pay it monthly. He set the wheels in motion for the finance, the application went through and he was due to collect the car the following week. He was under the understanding that the £18,000 figure for the car was included the interest etc.

    The following day he was advised that (since he had the money in the bank) it would be better to just buy it outright, not pay the interest and he would be able to sell it at any point if he wanted etc. He then called Mercedes and cancelled the finance and requested to just pay the sum outright. They came back with the sum of £14,000 to purchase the car, he paid over the phone with a card and collected the car a few days later, patting himself on the back for not taking the finance and saving £4000 in the process.

    Within a week (Feb 2017) he received a letter from Mercedes stating that the payment had been completed, and no outstanding money was owed.

    Fast forward to yesterday (29th November 2017 - 10 months later) and he received a call from Mercedes advising that there was a mistake back in Feb 2017 and they only charged him £14,000 but should have been £18,000. They are now requesting that he pay the difference as soon as possible.

    It seems likely that the £14,000 figure was probably what they paid for the car, and they were supposed to sell it at £18,000 for a £4000 profit, but they accidentally sold it to him at trade price.

    Where does he stand legally with this? He has been driving the car daily for the best part of 10 months and has a hand-signed letter from the dealership stating that no outstanding money is owed.

    Worst case scenario, can he just hand the car back and get his money back? He does not currently have access to the £4000 they are demanding.

    Any help or advice would be greatly appreciated!

    Thanks
    Originally posted by theNbomb
    What does his purchase invoice state is the price for the car?

    I would say its most likely been an error in the finance paperwork with regards to the finance rather than them "accidentally selling it to him at trade price"

    If the invoice says £18,000 i would expect the Mercedes dealer will pursue your friend for the £4,000. If it says £14,000 then i dont think they'd have a case.

    Also, bear in mind these are seperate entities - the Mercedes franchise whom he bought it off will be a separate company to Mercedes Finance who the finance is with, who are also seperate from Mercedes, the manufacturer.
    You are not special. You are not a beautiful and unique snowflake.
    • camelot1971
    • By camelot1971 30th Nov 17, 2:25 PM
    • 550 Posts
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    camelot1971
    • #4
    • 30th Nov 17, 2:25 PM
    • #4
    • 30th Nov 17, 2:25 PM
    I'm a bit confused here. The finance company would have paid the dealer at the beginning of this process, and the dealer would have told the finance company how much the car was.

    Is the claim from the dealer or from the finance company? If you took an agreement for £18,000 and only paid £14,000 then I would say you owe the money. If the agreement states £14,000 you don't owe anyone anything.

    What is on the credit agreement?
    • DoaM
    • By DoaM 30th Nov 17, 2:53 PM
    • 3,577 Posts
    • 3,619 Thanks
    DoaM
    • #5
    • 30th Nov 17, 2:53 PM
    • #5
    • 30th Nov 17, 2:53 PM
    What is on the credit agreement?
    Originally posted by camelot1971
    Read the OP again - there ISN'T a credit agreement as the mate cancelled the finance.
    Diary of a madman
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    • theNbomb
    • By theNbomb 30th Nov 17, 2:55 PM
    • 2 Posts
    • 0 Thanks
    theNbomb
    • #6
    • 30th Nov 17, 2:55 PM
    • #6
    • 30th Nov 17, 2:55 PM
    Thanks for the replies guys, I'm not exactly sure what the invoice says but my understanding is that the issue is with Mercedes themselves rather than Mercedes finance. The finance was cancelled only 1 day after it was applied for, I think they approved it but no money ever got transferred between Mercedes Finance and the Mercedes dealership. The issue seems to be with Mercedes directly. They took the payment for £14,000 and the dealership sent the letter to advise that the car was paid up. (It was an bespoke letter rather than just an everyday template). I can't remember the exact wording on the letter but i did see it yesterday and the gist of it was: finance was cancelled, the car has been paid for outright, no money outstanding, enjoy your new car.
    • neilmcl
    • By neilmcl 30th Nov 17, 3:33 PM
    • 10,287 Posts
    • 7,213 Thanks
    neilmcl
    • #7
    • 30th Nov 17, 3:33 PM
    • #7
    • 30th Nov 17, 3:33 PM
    Thanks for the replies guys, I'm not exactly sure what the invoice says but my understanding is that the issue is with Mercedes themselves rather than Mercedes finance. The finance was cancelled only 1 day after it was applied for, I think they approved it but no money ever got transferred between Mercedes Finance and the Mercedes dealership. The issue seems to be with Mercedes directly. They took the payment for £14,000 and the dealership sent the letter to advise that the car was paid up. (It was an bespoke letter rather than just an everyday template). I can't remember the exact wording on the letter but i did see it yesterday and the gist of it was: finance was cancelled, the car has been paid for outright, no money outstanding, enjoy your new car.
    Originally posted by theNbomb
    That may be the case but unless that letter made reference to the total price of the car being £14K then it may be an issue if the invoice actually states £18K.
    • camelot1971
    • By camelot1971 30th Nov 17, 4:43 PM
    • 550 Posts
    • 861 Thanks
    camelot1971
    • #8
    • 30th Nov 17, 4:43 PM
    • #8
    • 30th Nov 17, 4:43 PM
    Read the OP again - there ISN'T a credit agreement as the mate cancelled the finance.
    Originally posted by DoaM
    Of course there is a credit agreement - the friend of the OP cancelled it and paid it off! There would have been a copy of the original agreement before it was cancelled/paid.
    Last edited by camelot1971; 30-11-2017 at 4:52 PM. Reason: not the OP, it was the friend!
    • Fosterdog
    • By Fosterdog 30th Nov 17, 5:19 PM
    • 3,442 Posts
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    Fosterdog
    • #9
    • 30th Nov 17, 5:19 PM
    • #9
    • 30th Nov 17, 5:19 PM
    Of course there is a credit agreement - the friend of the OP cancelled it and paid it off! There would have been a copy of the original agreement before it was cancelled/paid.
    Originally posted by camelot1971
    You are getting confused, the credit agreement is irrelevant, it was cancelled before the car was even collected. OPs friend then purchased the car as a separate cash (card) transaction.

    The only reason the credit agreement has been mentioned is that originally the friend was told the agreement would be for £18000 and what he believed to include interest which is quite common with car finance.

    When he has then told that the cash price of the car was only £14000, which he assumed was minus the interest that no longer needed paying. He also received a letter a week later confirming that it had been paid in full.

    The dealership has obviously made a mistake somewhere along the line but depending on what paperwork the friend has will depend on whether or not the additional £4000 is owed.
    • motorguy
    • By motorguy 30th Nov 17, 5:24 PM
    • 15,814 Posts
    • 9,095 Thanks
    motorguy
    You are getting confused, the credit agreement is irrelevant, it was cancelled before the car was even collected. OPs friend then purchased the car as a separate cash (card) transaction.

    The only reason the credit agreement has been mentioned is that originally the friend was told the agreement would be for £18000 and what he believed to include interest which is quite common with car finance.

    When he has then told that the cash price of the car was only £14000, which he assumed was minus the interest that no longer needed paying. He also received a letter a week later confirming that it had been paid in full.

    The dealership has obviously made a mistake somewhere along the line but depending on what paperwork the friend has will depend on whether or not the additional £4000 is owed.
    Originally posted by Fosterdog
    Noone is getting confused - what IS on the credit agreement (paperwork) and what IS on the purchase invoice are what are key here. If they are all aligned at £14,000 then the O/Ps friend has little to worry about.

    If they are for £18,000 or whatever (as the purchase price of the car) then i would expect the dealer will pursue the buyer for the difference which they didnt pay.

    I suspect the O/Ps friend knew there had been a !!!! up - no one gets quoted £18,000 by a dealer as the price of the car and believes that to be the total price they had to pay including interest.
    You are not special. You are not a beautiful and unique snowflake.
    • motorguy
    • By motorguy 30th Nov 17, 5:26 PM
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    • 9,095 Thanks
    motorguy

    the friend was told the agreement would be for £18000 and what he believed to include interest which is quite common with car finance.
    Originally posted by Fosterdog
    Sorry, but this is rubbish. No car dealer is ever going to lead with the total price for the car, including all interest due.


    When he has then told that the cash price of the car was only £14000, which he assumed was minus the interest that no longer needed paying. He also received a letter a week later confirming that it had been paid in full.
    Originally posted by Fosterdog
    I think the O/Ps friend has "conveniently" assumed.
    You are not special. You are not a beautiful and unique snowflake.
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