Car Finance Agreement

b3ats

To be honest I am seriously confused about my situation.

Does the retail finance that I have work in the same way that any other car finance would for the purposes of GAP protection or can I only have GAP on Hire Purchase & PCP?

If the latter is true then I would never be able to claim as it has been established that I do not have either of those products.

If my car was written off then the insurance company would be giving me the money not the finance company is it is effectively a personal loan.

I'm really confused, worried and right at the end of my tether with this. Can somebody explan the facts to me please?

~Brock~

b3ats wrote: »

To be honest I am seriously confused about my situation.

Does the retail finance that I have work in the same way that any other car finance would for the purposes of GAP protection or can I only have GAP on Hire Purchase & PCP?

You can have GAP even if you pay cash for the car. There are two types. Finance GAP and Return to Invoice GAP. Finance GAP pays off the finance agreeemnt and RTI GAP pays the difference between the insurance settlement and the invoice price back to you. In your case you could conceivably have either, but there is no suggestion from what I can see that it may have been mis-sold.

If the latter is true then I would never be able to claim as it has been established that I do not have either of those products.

See above. Check the type of policy you have, but in either case you would stand to benefit in the event of a claim.

If my car was written off then the insurance company would be giving me the money not the finance company is it is effectively a personal loan.

Again, depends on the type of GAP, but in either scenario you would benefit.

I'm really confused, worried and right at the end of my tether with this. Can somebody explan the facts to me please?

Not sure exactly why you are getting so worked up about this. It would seem that the dealer originally provided you with a way of changing your car and including your £2k negative equity, which on most days would be seen as a pretty mean feat.

You are either going to have to take a hit now if you sell the car or alternatively live with the situation until you start paying back some of the negative equity.

It would seem that you are getting worked up over the idea that you may have been 'missold' in some way and should therefore be claiming money back. I can only suggest that this is a sign of the times and that you accept the situation for what it is and deal with it positively.

b3ats

Thanks for your advice. It is Return to Invoice GAP so I won't worry in that respect.

I am getting worked up because I am pi**ed off at the dealership for selling me something other than what I asked for and that I at the time did not understand what I was looking at and thinking that there were only three types of car finance, plus the dealership did not explain to me what it was I had.

In my opinion, the problem that I have faced has stemmed from my investigating car finance on the net only to find all sites that I visited stating that there are three types of finance for car purchases. The dealership suggested a loan and I said no. The dealership put through a loan anyway but the wording on the form was retail finance, which is why I thought that I was getting HP in the first place. They never told me that it was a personal loan in a fancy (worded) frock.

For the record, the car that I had before the one I have now had negative equity transferred to the Hire Purchase agreement (and it definitely was HP). I was just transferring the same amount of negative equity to the next vehicle and assumed that the agreement would be the same (because I had asked for that) and as I have said, didn't understand that there were differences.

CLAPTON

I see little prospect of your some how proving mis-selling with the dealer so I would suggest you move on and try to reduce the costs.

You seem to have had several loans/HP in your young life so the first lesson (maybe a bit late) is to learn to budget and save for things you want and not go into debt in the first place (mortgage excepted)

However as you are in debt now ...

you say you can easily get a loan at lower rates than 19% so I would suggest you do so and pay this loan off... it will save you interest
Its unlikely that selling the car will be worthwhile as presumably you would need to replace the thing anyway but it may be worth exploring depending upon its resale price.

Dr.Shoe_2

CLAPTON wrote: »

you say you can easily get a loan at lower rates than 19% so I would suggest you do so and pay this loan off... it will save you interest

Actually it might not. It all depends on whether the interest was "front loaded" or is calculated periodically based on the remaining balance at that time. Some credit agreements allow you to make "accelerated payments" which means if you pay more then you save interest. Why not phone the company and ask?

Even with front loaded terms you will get a rebate for early settlement so you will be balancing your repayments with a new loan against the repayments of your existing loan if you should choose that route. Don't forget to check the repayment amounts and the duration.

CLAPTON

Dr.Shoe wrote: »

Actually it might not. It all depends on whether the interest was "front loaded" or is calculated periodically based on the remaining balance at that time. Some credit agreements allow you to make "accelerated payments" which means if you pay more then you save interest. Why not phone the company and ask?

Even with front loaded terms you will get a rebate for early settlement so you will be balancing your repayments with a new loan against the repayments of your existing loan if you should choose that route. Don't forget to check the repayment amounts and the duration.

For a non secured personal loans, interest can't be front loaded with out rebate and repaying early will reduce the interest otherwise payable. The loan company MUST determine the settlement figure acccording to CCA rules (or a lesser figure of course)