How RCI Finance do their sums..

t0mbop

Hi guys, hope we are all well in MSE world?

First things first, I've been avidly reading many threads related to my question over the last few days so would like to add this disclaimer.

DISCLAIMER: I do not have a problem. I am not a victim, neither have I been mis-treated or "ripped off" by RCI or Renault. I have not been mis-sold a product neither did I go into my original agreement with my eyes shut or with naive expectations.

Right well that's that out of the way, here we go! I currently have a Renault, 1 year old from new on a 3 year hire purchase agreement at 5.6% APR. No deposit was given at the time. I now want to change my car, it's not a need, it's a want and I have no issue with admitting that at all. I'm not going to dress it up and blame children (of which I have none) or other family related scenarios, I want a new one.

Here's some figures direct from the agreement.

(A) Total Amount Payable - £18,172.68 [B+E+F]
(B) Amount of Credit - £15,604.00 [D-E]
(C) Balance of Amount Payable - £17,432.68 [A-E]
(D) Total cash price of goods - £16,344.00
(E) Advance payment by customer - £740
(F) Total charge for credit - £1,828.68
(G) Settlement figure as of 15/7 - £12,602.34
(H) Monthly payment - £316.38 [12x payments made = £3796.56
(I) Termination: Your rights - You have a right to end the agreement. RCI will be entitled to the return of the goods and to half the total amount payable under this agreement, that is £9086.34. If you have paid this amount and taken reasonable care of the goods you will not have to pay any more.
(J) Final rental (balloon) - £5,795.00
(K) My car valuation - £8750 - 11,040 (Renault - the real world respectively)

So, my total balance to pay (C) minus my settlement figure (G) is £4830.32. This appears to be what I have "paid off" my balance payable, but it isn't. I've paid (H). How have they arrived at this figure? This leave a shortfall/discrepancy of £1033.76 between the 2 figures, it appears that I've paid more than I actually have, as if I was to settle today I'd only pay (G) however that's 1033.76 less than what it should be if you do (C) minus (H).

As such based on this, how do they arrive at (I)? As with a 1033.76 differential over 2 years presumably that differential becomes double which is the equivalent of around 6-7 months worth of payments.

Naturally I'm in negative equity, of course I would be, not a problem. My intention is to go to Audi around the magical (I) time whereby hopefully my negative equity will be minimal as oppose to the £4000 or so it is now and start a new PCP or HP deal on a used A4 estate, (We have a large pony-esque dog). Just to reiterate, we don't need this estate, we shoehorn him happily into the boot of the Clio now, but we would like the estate.

I went to Audi yesterday more as an exercise than a car buying event and they said whilst we could do business today I'd have to settle the negative equity myself (not an option, don't want to) it would be much easier and more palatable if I returned in a years time, 2 years into my agreement. For reference my agreement began on July 7th 2010 so using the terms "1 year in" is actually extremely accurate. To return in a years time would mean being exactly 2 years into the 3. Why exactly is this? Is this the time when things begin to balance out, i.e. the value of the car is similar to the amount owed?

I hope I haven't come across arrogant, that's not my intention. However I do find it funny when people try and get out of their agreements because they dress their situation up as something it isn't or that their a victim because they didn't read something, that's not me. I'm just very curious how it all really works and when I become a more attractive proposition to take on by Audi and also when it becomes less wasting for me to do business again.

Thanks guys!

t0mbop

Can anyone help?

davidwelch158

Is £1033 is the interest over the remaining term of the loan?

Flyboy152

t0mbop wrote: »

Hi guys, hope we are all well in MSE world?

First things first, I've been avidly reading many threads related to my question over the last few days so would like to add this disclaimer.

DISCLAIMER: I do not have a problem. I am not a victim, neither have I been mis-treated or "ripped off" by RCI or Renault. I have not been mis-sold a product neither did I go into my original agreement with my eyes shut or with naive expectations.

Right well that's that out of the way, here we go! I currently have a Renault, 1 year old from new on a 3 year hire purchase agreement at 5.6% APR. No deposit was given at the time. I now want to change my car, it's not a need, it's a want and I have no issue with admitting that at all. I'm not going to dress it up and blame children (of which I have none) or other family related scenarios, I want a new one.

Here's some figures direct from the agreement.

(A) Total Amount Payable - £18,172.68 [B+E+F]
(B) Amount of Credit - £15,604.00 [D-E]
(C) Balance of Amount Payable - £17,432.68 [A-E]
(D) Total cash price of goods - £16,344.00
(E) Advance payment by customer - £740
(F) Total charge for credit - £1,828.68
(G) Settlement figure as of 15/7 - £12,602.34
(H) Monthly payment - £316.38 [12x payments made = £3796.56
(I) Termination: Your rights - You have a right to end the agreement. RCI will be entitled to the return of the goods and to half the total amount payable under this agreement, that is £9086.34. If you have paid this amount and taken reasonable care of the goods you will not have to pay any more.
(J) Final rental (balloon) - £5,795.00
(K) My car valuation - £8750 - 11,040 (Renault - the real world respectively)

So, my total balance to pay (C) minus my settlement figure (G) is £4830.32. This appears to be what I have "paid off" my balance payable, but it isn't. I've paid (H). How have they arrived at this figure? This leave a shortfall/discrepancy of £1033.76 between the 2 figures, it appears that I've paid more than I actually have, as if I was to settle today I'd only pay (G) however that's 1033.76 less than what it should be if you do (C) minus (H).

As such based on this, how do they arrive at (I)? As with a 1033.76 differential over 2 years presumably that differential becomes double which is the equivalent of around 6-7 months worth of payments.

Naturally I'm in negative equity, of course I would be, not a problem. My intention is to go to Audi around the magical (I) time whereby hopefully my negative equity will be minimal as oppose to the £4000 or so it is now and start a new PCP or HP deal on a used A4 estate, (We have a large pony-esque dog). Just to reiterate, we don't need this estate, we shoehorn him happily into the boot of the Clio now, but we would like the estate.

I went to Audi yesterday more as an exercise than a car buying event and they said whilst we could do business today I'd have to settle the negative equity myself (not an option, don't want to) it would be much easier and more palatable if I returned in a years time, 2 years into my agreement. For reference my agreement began on July 7th 2010 so using the terms "1 year in" is actually extremely accurate. To return in a years time would mean being exactly 2 years into the 3. Why exactly is this? Is this the time when things begin to balance out, i.e. the value of the car is similar to the amount owed?

I hope I haven't come across arrogant, that's not my intention. However I do find it funny when people try and get out of their agreements because they dress their situation up as something it isn't or that their a victim because they didn't read something, that's not me. I'm just very curious how it all really works and when I become a more attractive proposition to take on by Audi and also when it becomes less wasting for me to do business again.

Thanks guys!

Total amount payable includes all charges, all advances and all monies paid before credit (i.e. any deposit money).

I noticed from your OP that you say that you paid no deposit, but the cash price of the goods is higher than the amount advanced. I am presuming therefore that you had a part-exchange and are not considering that as a deposit, also don't forget to include the ordering deposit.

You borrowed £15,604.00 add interest and charges on to that and the amount you have to pay back is £17,432.68. This consists of the monthly payments, any document fees and option (purchase) fees and the final payment of £5,795.00. All of this would be valid if the loan was to run for its full thirty-six months. However, as you will be terminating early, the last twenty-four months of interest would not be payable (excluding any early termination charges).