Loan arrangement fees

geofft1947

Agreed a deal on a new car last week. The salesman and I verbally agreed the finance arraengments and the deposit, monthly payment and final payment were agreed. When I went to collect the car, I noticed the final payment had increased by £300. When I asked why, I was advised that the finance arrangement fees had been added. I complained that at no point during the negotiations had any fees been mentioned or agreed and therefore I should not be paying them. After half an hour of arguing, I relented and signed the agreement. Later I called the finance company direct and requested information on arrangement fees. They were very vague but in the end advised that there were no fixed fees and it was something to be decided by the salesman. What I would like to know, is there any legislation that controls how much a lender can charge for an arrangement fee, and must it be clearly stated to the borrower in advance?

Common_Sense_2

There is no real legislation, but - any fees should have been noted in the SECCI (the information sheet you should have been given before you signed the documents)

Arrangement fees and the like are commonplace on car finance deals, some charge it with the first payment, some charge it over the period of the loan. on HP deals there is sometimes also an Option to Purchase Fee which is taken with the final payment. This is another money making fee for finance companies (but again perfectly legal).

TBH - if you aren't planning to keep the loan for the full term then i wouldn't bother about it!

chalkie99

geofft1947 wrote: »

I relented and signed the agreement.

I think that is the problem.

dunstonh

They were very vague but in the end advised that there were no fixed fees and it was something to be decided by the salesman. What I would like to know, is there any legislation that controls how much a lender can charge for an arrangement fee, and must it be clearly stated to the borrower in advance?

Noting prevents anyone charging for the services they provide.

However, what you describe sounds a cross between misrepresentation or even fraud as the charges should be clear and advised in advance. You were lied to about their purpose and they tried hiding them.

You should not have signed the finance agreement. However, as you have, you should make a formal complaint. Not about the fact there is fees but the fact they were hidden in and the purpose lied about.

Hugh_Jass

Hi - this happened to me with a VW dealer. Luckily they paid me the additional £70 for the final payment as they never advised me that the final payment included fees. I would have another go at the dealer.

KingElvis

For a few quid I would've made my point and walked away, for £300 I would've cleard off elsewhere rather than get shafted......