'admin fee' on completing loan repayments

rolox

I have been buying my car on hp and have just made the last of 48 payments of £146. I now have one payment left - an 'admin fee', It think they have called it, of £236. I have always known about this payment, it was in the original documentation, although I did think, incorrectly it seems, that it included the final £146. However, now the time has come to make that payment it does seem a ridiculously excessive amount as a sign-off fee and so, in the recent climate of contesting unfair charges, I would like to know if there is any precedent or guidelines on this type of fee for this type of loan. Thanks

standupguy

Just like mortgage fees, these extra charges are designed to maintain the lenders margins as an additional profit income.

You were aware of this on signing the agreement so difficult to dispute now.

The only thing that may help is if it actually does say administration fee - as it would be difficult to defend an administration fee of such an amount at the end of an agreement.

There is no admin as such at the end of an agreement - the computer closes the account and sends notification to HPI to remove the finance marker.

If it is an admin charge - telephone the Finance company and say you want to make a complaint about the level of the admin charge and ask them what admin work is required and what cost is this to the Finance company.

Tell them you are unhappy about this, you believe the charge to be unfair and not in line with FSA guidelines of "treating customers fairly" and you are prepared to take the matter to the Financial Ombudsman service if it comes to it.

If they do not compromise and you do take it to FOS then it costs them £400 for FOS to review your complaint.

Now if you were them what would you do?
Compromise on £236 now or lose at least £400 if you take it further.

brightonman123

give us abreakdown of the original loan cost (capital, interest, fees etc), and the repayment schedule..

~Brock~

The charge will be an Option to Purchase Fee (usually shortened to simply 'Option Fee')

At the end of a HP agreement the customer has the 'option' to take ownership of the goods. The lender is entitled to charge a fee should this option be exercised. The alternative would be to not pay the fee and return the goods instead.

The fee will have been stated on the original paperwork and included in the overall cost of credit and APR. It is perfectly legal.

I don't really see how you can expect to get very far complaining about it now when you have known about it since the beginning of the agreement.

It is certainly not uncommon for consumers to use the prospect of an FOS fee (now £500) as a form of blackmail in the way that standupguy has suggested but bear in mind that the FOS are not blind to this type of tactic, and would more than likely be alerted by the lender that you had used it on them (recorded calls, letters etc).