HPI 15 day cool off period - what are the options

Eoan

Hello,

I bought a 6 month old car yesterday and have a dilemma with the finance.

The dealer and I negotiated for a while and reduced the price of the car and extras to a total of £9700 including tradein which I would finance with repayments of around £242. I was quite happy with this, and the dealer gave me a written sheet with how he got to the £9700 amount. Checking online for personal loans I found I could beat the £242, but only by around £4, so I thought that was close enough, I'd been told the flat rate was around 6% but hadn't at the time worked out the APR. When I did the checks online, the APRs of 7.3% were giving me quotes of £238.

When I collected the car, I found that the invoice was now for a different amount, £9300. The dealer said that he'd had to discount things, like road tax, free service and increase the tradein value of my car, so that he could get the finance company down to £242. I was told at the time that it was a way of getting the finance, and that I wouldn't be able to pay £9300 if I wasn't taking the finance. The APR I'm being charged is just over 12%

But in effect, I've financed £9300 instead of £9700. A quote on £9300 is closer to £222 a month, saving £20 a month over 48 payments if I took a personal loan. A fairly large sum over the term. £960

Where do I stand here? As I've signed the agreement, I get a 15 day no questions asked cancellation period. If I decide instead to get a personal loan and pay the £9300, will the garage have the ability to increase it back to £9700? I don't think they can as the invoice is £9300 and I've got the car.

Any advice appreciated.

Cheers,
Eoan

ILW

I believe that if you signed on trade premises, there is no calling off period.

Eoan

ILW wrote: »

I believe that if you signed on trade premises, there is no calling off period.

Thanks for the reply.

There is a Right of Withdrawal on the Hire Purchase Agreement stating -

You may withdraw from the Agreement without giving any reason for a short time after it is made (clause 14). If you do so you must pay us the outstanding balance of the Amount of Credit and interest on it calculated at the Interest Rate until paid in full. The daily interest on the Amount of Credit is £2.64 (Goods)

Clause 14 states the term is 15 days.

I actually think I have a good case to withdraw provided I do so within 15 days and settle the £9300 + (£2.64/day) for however long it takes me to organise a new loan.

standupguy

The right to withdraw is a new regulation so you can if you wish.

It looks like the dealer has adjusted his figures to earn extra commission on selling the finance (at a higher rate) which will he will not get if you withdraw.

He has been a bit clever to try and make the deal a bit more profitable to him - it is up to you now whether you want to be a bit clever and make the dealer a bit better for you?

Eoan

standupguy wrote: »

The right to withdraw is a new regulation so you can if you wish.

It looks like the dealer has adjusted his figures to earn extra commission on selling the finance (at a higher rate) which will he will not get if you withdraw.

He has been a bit clever to try and make the deal a bit more profitable to him - it is up to you now whether you want to be a bit clever and make the dealer a bit better for you?

Sounds about right, I was fairly careful reading the agreement to make sure I could withdraw without penalty and so get the car at the cheaper price.

I think my mind is made up, just need to get hold of that £9300 loan at 7.3% now.. Might be easier said than done.

PNPSUKNET

They do have the right also to request the car back, the price was subject to finance been taken

[Deleted User]

Eoan wrote: »

Sounds about right, I was fairly careful reading the agreement to make sure I could withdraw without penalty and so get the car at the cheaper price.

I think my mind is made up, just need to get hold of that £9300 loan at 7.3% now.. Might be easier said than done.

i`d say that would be almost impossible,you may get 8.9%

Flyboy152

Eoan wrote: »

Hello,

I bought a 6 month old car yesterday and have a dilemma with the finance.

The dealer and I negotiated for a while and reduced the price of the car and extras to a total of £9700 including tradein which I would finance with repayments of around £242. I was quite happy with this, and the dealer gave me a written sheet with how he got to the £9700 amount. Checking online for personal loans I found I could beat the £242, but only by around £4, so I thought that was close enough, I'd been told the flat rate was around 6% but hadn't at the time worked out the APR. When I did the checks online, the APRs of 7.3% were giving me quotes of £238.

When I collected the car, I found that the invoice was now for a different amount, £9300. The dealer said that he'd had to discount things, like road tax, free service and increase the tradein value of my car, so that he could get the finance company down to £242. I was told at the time that it was a way of getting the finance, and that I wouldn't be able to pay £9300 if I wasn't taking the finance. The APR I'm being charged is just over 12%

But in effect, I've financed £9300 instead of £9700. A quote on £9300 is closer to £222 a month, saving £20 a month over 48 payments if I took a personal loan. A fairly large sum over the term. £960

Where do I stand here? As I've signed the agreement, I get a 15 day no questions asked cancellation period. If I decide instead to get a personal loan and pay the £9300, will the garage have the ability to increase it back to £9700? I don't think they can as the invoice is £9300 and I've got the car.

Any advice appreciated.

Cheers,
Eoan

The business manger has worked out that he will earn more profit from the finance, than from the loss of margin on the car. Which, if you think about, it is quite a reasonable expectation. You got the deal you wanted, in terms of the money you wanted to spend and he made a reasonable profit from the deal. The problem arises from the lack of clarity. He was stupid enough to not have worked this out at the start and even more so by not explaining this to you in, terms that would make proper sense, at the point you collected the car. The other reason that the car was invoiced at a lower sale price, is the saving, to the dealer, on the VAT.

You have every right to cancel the finance, but you must pay the dealer the full cost for the car at the same time. Check the terms and conditions of sale, to find out if the dealer has the right to charge you an administration fee.

Eoan

Had a look around the forums and this thread talks about this type of situation.

forums.moneysavingexpert.com/showthread.php?t=2894046

If Brock is correct, then I have the right to withdraw and settle with the finance company. I don't have a contract with the Garage, the contract is with the finance company. They have a contract with the garage.

Flyboy152

It very much depends on whether the finance company has settled with the dealer. Ultimately the car needs paying for, if the you send the finance company a cheque for the full amount borrowed, they may have the right to not refund any administration costs; as might the dealer.

Eoan

Flyboy152 wrote: »

It very much depends on whether the finance company has settled with the dealer. Ultimately the car needs paying for, if the you send the finance company a cheque for the full amount borrowed, they may have the right to not refund any administration costs; as might the dealer.

The finance company own the car at the moment, they settle with the dealer when I sign the agreement and they immediately hire the goods to me. By withdrawing from the contract, I am saying I no longer wish to hire the goods from them and will pay the withdrawal costs. Which would be the full £9300 + the daily interest of £2.64/day.

I'll give them a call tomorrow, will post the details.