Car Finance 'Admin Charge'

PiperUK_2

Just struck a decent moneysaving deal for a pre registered Fiat Panda. Got £2500 of the list price and a hire purchase agreement with a half decent APR of 8.5% on a sum of £3420, and was told that would equal 60 monthly payments of £69.83.

I was feeling quite pleased with myself until I saw the payment breakdown. They want £164.83 first payment, 58 payments of £69.83 and a final payment of £119.83. I asked why the first payment was so high, and the salesman said it was an "admin charge".

£95 admin charge! What is this madness? Could anyone tell me if this is normal practice for hire purchase? Is the first payment always higher? If they are ripping me off can I complain?

By the way, In my excitement at getting a new car I signed the agreement...

looby75

I've heard of admin charges much much higher than £95, my sister used Yes car credit to get a car about 4 years ago and they charged almost £200!

She was in a crash (not her fault) a few months later and the car was a total write off. The insurance paid out directly to Yes and the cheeky so and so's then tried to charge my sister an early repayment penalty! Needless to say she told them where they could stick it LOL

PiperUK_2

Wow, I've heard some bad things about Yes! car credit, and that just about conferms their reputation.

Anyone else had experience of a high initial payment?

nomoneytoday

Toyota's is about £80

VincentVega

They all do it from my experiences with car buying. The only way to get round it is to pay the entire lot yourself or get a conventional loan (i.e. from a bank or building society) and avoid paying the dealer's fees and a higher APR.

Does your finance agreement have a cooling off period? If so, take advantage of it and get a loan elsewhere that doesn't sting you for "admin charges".

Gorgeous_George

The admin charge should be included in the APR.

If the car came with a warranty, make sure the paperwork for the warranty is delivered. I bought a car with a year's warranty and the head gasket went. When I tried to claim the warranty company had never heard of the car.

The garage was allegedly under new ownership so I got no joy there either. Overall, I was happy with the car.



GG

Michael_lf

In my experience car finance companies are all bad news and you should desperately try to avoid them.

stripeyfox

My partner recently finished paying for a Ford Fiesta from Ford Credit and they had a final £70 "sting in the tail" admin charge.

Catch_A_Fire

As mentioned earlier, any compulsory charge must be included in the calculation of the APR. "Sting in the tail" charges are used to make the repayments look smaller and more affordable. Clever marketing!