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Intrest first loan
My girlfriend took out a loan on a second hand car from a dealer last year, which was £11,000 over 5 years.
Basically, we had got a deal with theAA for a loan for £250 (or similar), but the garage said could they do a quote, as they can beat anyone else. So we said, why not.
They came back with a quote £10 cheaper that theAA. She was happy with that, but I thought it was a bit suspicious, and questioned him, my main question was "what is the APR", so I could figure out the total payable. He didn’t give it to me. I kept bugging for answers but never got them. But my girlfriend wanted the car so badly she signed.
Fast forward to now, she wants to get a new car, she calls the finance company and she still owes them close to £10,000! That’s not right, so she asks some questions. Turns out it was a loan where all the interests paid off first we also look at the paper work and the APR is 11.9%! Which is almost double what theAA offered. Now, I’ve heard about these, and there no longer allowed to do them. There illegal now, and I was at the dealer today, and he confirmed that too.
As she was given a "strange" loan, can we do anything about this? She’s basically been ripped off by the ***holes at the dealer and it’s not fair.
Basically, we had got a deal with theAA for a loan for £250 (or similar), but the garage said could they do a quote, as they can beat anyone else. So we said, why not.
They came back with a quote £10 cheaper that theAA. She was happy with that, but I thought it was a bit suspicious, and questioned him, my main question was "what is the APR", so I could figure out the total payable. He didn’t give it to me. I kept bugging for answers but never got them. But my girlfriend wanted the car so badly she signed.
Fast forward to now, she wants to get a new car, she calls the finance company and she still owes them close to £10,000! That’s not right, so she asks some questions. Turns out it was a loan where all the interests paid off first we also look at the paper work and the APR is 11.9%! Which is almost double what theAA offered. Now, I’ve heard about these, and there no longer allowed to do them. There illegal now, and I was at the dealer today, and he confirmed that too.
As she was given a "strange" loan, can we do anything about this? She’s basically been ripped off by the ***holes at the dealer and it’s not fair.
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Comments
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Was this loan signed up before 31st May 2005?
If she thinks that she was deliberately mislead into taking this loan then take a look here on where to start with a complaint."One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
Because by then you've blown your chances. That's it."0 -
mrcow if the loan was signed up after 31 may... what could be done ?
i got hit with something the same but was signed up after 31 may0 -
She signed the paperwork in april some time. So does that mean we have a leg to stand on?
I dont want to do the whole "court" thing, i was hoping there is some law i can throw at them, and i get compensation! (i always like the easy way out!)0 -
The 31st May 2005 was just when there were some changes to the Consumer Credit Act (in the way interest is calculated etc). It was supposed to have made the whole system easier to understand and consumers are given examples of what early repayment will actually cost them in the "key information" section on the paperwork that they sign.
Exactly what is she unhappy about with about her loan? Was she not given this information? If she thinks that she was missiold, then try the above link for advice.
Trading standards have a good page here which explains the changes on how early repayments are now set out on the paperwork when you take out the loan so the whole thing is more transparent."One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
Because by then you've blown your chances. That's it."0 -
Its the fact that the company said they will beat the loan we had, but it turns out the APR is actually higher. Plus the fact that all of the intrest was paid out stright away! so we now want to shift the car, but still pretty much owe the whole value of the car still!0
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samgoffe wrote:She signed the paperwork in april some time. So does that mean we have a leg to stand on?
Sorry I've just seen this. Before May 31st, these changes didn't apply. I'm unsure of your position. You can always try one of the advice helplines available to consumers, for example consumer direct 08454 040506 and they may be able to give some pointers.
I'd still ask what exactly is the problem with the loan, is it that she's unhappy with the outstanding amount? It's just the loan company may not necessary be inthe wrong (it can feel like it though when you think you've been ripped off)."One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
Because by then you've blown your chances. That's it."0 -
If the loan's intrest was calulated monthly, we would of cleared alot more by now.
We have cleared just under 2k (of the initial loan ammount) where as if the loan had intrest applied monthly, we could of cleared closer to 3k.0 -
Sorry, we're cross posting heresamgoffe wrote:Its the fact that the company said they will beat the loan we had, but it turns out the APR is actually higher. Plus the fact that all of the intrest was paid out stright away! so we now want to shift the car, but still pretty much owe the whole value of the car still!
Loads of car dealers have loans like this. They tell you that you're getting a loan at eg.4% APR, but it's actually a flat rate of 4% which works out a lot more in terms of actual APR (usually about twice as much!)
It's very misleading and if you have a search on these forums, you'll see you're not the only one who's been a victim of this. They will still have advised on the APR on a the paperwork, so their argument is it's your fault as you didn't read the small print.
Has she asked for a settlement figure on the loan, as the best thing may be to cut her losses and move the finance somewhere else?"One day I realised that when you are lying in your grave, it's no good saying, "I was too shy, too frightened."
Because by then you've blown your chances. That's it."0 -
she has asked for a settlement figure, its £9500(ish). I have thought about closing the loan with the current company and moving it to theAA (where we know where we stand!).
I'm just afraid we wont get accepted on the AA loan :S0
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