Have i understood this car finance correctly?

hanes

Hi,
My credit options were poor, so i decided to go with a company called ACF after being turned down by carcraft, i went down to a local showroom and picked a car that i was happy with and could afford the repayments on.

but after looking over the paperwork again i have two amounts, one where my installments are £271 monthly and another that is £331 monthly, i took out GAP insurance and AA roadside recovery, but was told that these would be included in the budget i had which is £71 weekly.

over 60 months the total charge is £19,215 at 42% apr shocking i know when the value is just over 7k.

But i want to know if after two years i've kept the payments going, would i be able to take the car for a trade in at another dealers, and get a lower APR on another car, while they will settle the outstanding finance thus giving me the repayments at a lower APR?

Just a tad confused now on what type of loan agreement i have, as i had to provide the car finanace company with a copy of my comprehensive cover not. I've never heard of this only on PCP rentals?

Any help would be grateful as if im not happy i can still pull out as im early into the agreement.

thanks

nomoneytoday

42% APR, and £19000 for a car this is possibly overpriced at £7k car is IMHO madness.

If you want GAP insurance it can be found online for a couple of 100, and breakdown cover can be found from about £40-50. I don't believe it's worth paying an extra £60 a month

Lemonade_Pockets

hanes wrote: »

Hi,
My credit options were poor, so i decided to go with a company called ACF after being turned down by carcraft, i went down to a local showroom and picked a car that i was happy with and could afford the repayments on.

but after looking over the paperwork again i have two amounts, one where my installments are £271 monthly and another that is £331 monthly, i took out GAP insurance and AA roadside recovery, but was told that these would be included in the budget i had which is £71 weekly.

over 60 months the total charge is £19,215 at 42% apr shocking i know when the value is just over 7k.

But i want to know if after two years i've kept the payments going, would i be able to take the car for a trade in at another dealers, and get a lower APR on another car, while they will settle the outstanding finance thus giving me the repayments at a lower APR?

Just a tad confused now on what type of loan agreement i have, as i had to provide the car finanace company with a copy of my comprehensive cover not. I've never heard of this only on PCP rentals?

Any help would be grateful as if im not happy i can still pull out as im early into the agreement.

thanks

Pull out if you still can!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

You will be paying for this car for years whether or not you part exchange it.

In two years you will be able to go to another car garage who will give you rubbish valuation for your px lets be generous and say £5k. I'd conservatively estimate that you'd still owe well over £10k, so thats £5k to finance on top of the purchase price of any new car. So if you where looking at a car at say £7k again you'd actually have to finance £13k which would then have interest applied to it and THE SNOWBALL OF DEBT CONTINUES.

I have no idea about your personal circumstances but if i was in the position where i couldn't get finance for less than 42% APR then i wouldn't be getting finance.

I don't intend to offend but this is madness if you can get out of it now get out, get out fast.

Lemonade_Pockets

If you want it in perspective i'm waiting for a new mini, purchase price circa £18k and i will be paying substantially less than you on a monthly basis.

hanes

Im not sure on this paperwork, i was told my APR was 26.07% which im fine with as this would bring the total to £9.906.70

But within my credit agreement it states under point 3. key financial information that the amount of credit is £7,035,50 and total amount payable is £19,215.80 AT 46.9%

I dont get it i asked the advisor what interest rate i would get and he told me it was the 26.07% but under this agreement i though the key financial information is the one that i will be paying?

Please help, i've been a right dimwit

Takoda

I just googled this company and at the bottom of the page it says in a HUGE font TYPICALLY 44.9 APR.

OUCH.

harveybobbles

hanes wrote: »

Im not sure on this paperwork, i was told my APR was 26.07% which im fine with as this would bring the total to £9.906.70

But within my credit agreement it states under point 3. key financial information that the amount of credit is £7,035,50 and total amount payable is £19,215.80 AT 46.9%

I dont get it i asked the advisor what interest rate i would get and he told me it was the 26.07% but under this agreement i though the key financial information is the one that i will be paying?

Please help, i've been a right dimwit

The 26.7% is the flat rate of interest they charge you. Which works out to be an APR of 46.9.

Atypical flat rate of say, 5% gives the APR to be about 9% ish...

harveybobbles

hanes wrote: »

Any help would be grateful as if im not happy i can still pull out as im early into the agreement.

thanks

Suicide?

Failing that, buy a banger for 2-300 quid.

Have you actually been signed up for the deal?

motorguy

hanes wrote: »

Im not sure on this paperwork, i was told my APR was 26.07% which im fine with as this would bring the total to £9.906.70

But within my credit agreement it states under point 3. key financial information that the amount of credit is £7,035,50 and total amount payable is £19,215.80 AT 46.9%

I dont get it i asked the advisor what interest rate i would get and he told me it was the 26.07% but under this agreement i though the key financial information is the one that i will be paying?

Please help, i've been a right dimwit

No way would £7K at 26.7% over 5 years ever amount to just £9906.

I would suggest the salesman has quoted you the 'flat' rate of interest, NOT the APR rate.

Mate, with respect, did you REALLY need a £7K car that badly that you had to give £19,000 for it? :eek:

I'd also suggest - given how these companies operate, that the car was overpriced in the first place.

£900 would by you quite a car these days and that would have meant just three months saving if you can afford £300 a month.

motorguy

hanes wrote: »

Im not sure on this paperwork, i was told my APR was 26.07% which im fine with as this would bring the total to £9.906.70

I was thinking about this last night - £9906.70 would be more likely to be the interest payable on the 7K loan at 26% over five years. Are you sure the salesperson didnt say 'total interest payable' as opposed to 'total amount payable'?

motorguy

hanes wrote: »

But i want to know if after two years i've kept the payments going, would i be able to take the car for a trade in at another dealers, and get a lower APR on another car, while they will settle the outstanding finance thus giving me the repayments at a lower APR?


thanks

If your total amount payable is £19,000 after approx 2 years you'll owe around 3/5ths of that (less a discount), so i'd say you'll owe between £10K and £12K. If the car cost you £7K, i'd say it will be worth £3.5k in 2 years time, therefore you'll owe roughly £8000 more than its worth....