I'm an idiot

shadowspy24

I am normally a very money savvy person and I know pretty much every money saving trick in the book but I have done something idiotic. In May I bought a car for £18000 and paid £5000 cash and £13000 finance. The big mistake I made was doing it through the dealers finance company as they are charging me an extortionate rate of interest. My monthly repayments are £300 a month for 60 months making the total repayment £18000 which means I will be paying an extra 5 grand for the car.

The deal is with black horse finance and it is around 15.9% apr. I asked them for a settlement figure the other day and the figure hasn't gone down a penny, infact it's gone up by a couple of quid. This is after I've already paid them 2 months of repayments of £600. So basically £600 down the drain. I phoned them up and asked them how this could be as 2 months of interest surely couldn't be that much and the woman quite rudely told me that the interest is front loaded meaning I already owe them the full £18000 even though it hasn't been 5 years and they give me a rebate for paying off early.

In hindsight what I should have done is taken out a personal loan of £13000 at a cheap rate of 6.6% and paid with that but I was too excited I guess. I can't get that loan now to pay it off either because I on my credit file I already have a debt of £18000 because of this loan and I am sort of stuck in a catch 22 position where they won't lend more money cos I'm already in debt (if that makes sense) although my score is 999.

I'm not looking for any advice, I just needed to rant and get it off my chest and warn others not to use car dealer finance as they are thieving con artists. If you have a good credit rating you should think it through before making any rash decisions.

Hopefully I will pay it off before the 5 year period ends and I won't be paying them the full amount of interest but it still leaves a bitter taste in my mouth that they screw people over like this. BTW would it be in anyway beneficial for me to make a lump payment to them of a couple grand or would that just be pointless?

somethingcorporate

How are they thieving con artists? You signed the contract with all the details on spelling out the above in black and white, did you not read it before signing?

Perhaps you are not as money-savvy as you seem to think you are?

paulsad

You are in good company on here - I've been an idiot most of my life!

immoral_angeluk

If your credit history isn't spotless and you give the lender any reason to think you may be higher risk (even if something petty) the APR will go up. Blackhorse aren't a subprime lender such as the welcome finances etc of the world, so 15.9% isn't massive. There's also no guarantee you would've been accepted for 6.6% or whatever low rate anyway, and you may werll have found they either refused you or would've been given a higher rate anyway.

opinions4u

There's no guarantee you'd have got a personal loan at a lower rate.

Many posts on here saying "I have a credit score of 999 but <insert lender> will only offer me 15% even though they advertise 7%".

So don't lose sleep over it.

Apples2

So even after accepting the idiocy of the decision, it is still the better option to blame others?

A concious decision to pay £23k for an £18k car over 5 years!

It will only be new for a short while, give it a couple of years and I'm sure you will absolutley resent paying so much each month for this car when those around you are all upgrading.
The fourth and fifth years of payments will be excruciating, you will hate the car but be firmly stuck in the finance.

Weirdest post of the day.

paulsad

opinions4u wrote: »

There's no guarantee you'd have got a personal loan at a lower rate.

Many posts on here saying "I have a credit score of 999 but <insert lender> will only offer me 15% even though they advertise 7%".

So don't lose sleep over it.

Absolutely - my bank (for 35yrs) offers 7.8% on its boasting page and when I applied on acceptance it went to 15.7%.
A week later a follow up call from a 16 yr old young lady or so she seemed at the bank as to why I hadn't taken the loan out "because it ended up at 15%" - "Oh yes, that's right" she replied, ..... very helpful!

Hijabee

Hmmm. I think you can get some help by going on debt advice.
I know you don't want help but you could get some ease off your chest.
Return the car?

shadowspy24

Thanks for all your replies. I think the best course of action for me to avoid further loss is to just pay it off as soon as possible (which I can do). Maybe higher repayments or a lump sum here and there. The most annoying thing isn't the interest rate but the fact that if I wanted to pay them off right now, I would have effectively paid them £600 for the privilege of borrowing £13000 for 2 months which does seem a bit extortionate.

Reesy1981

It will probably be more than you have borrowed, plus the £600 repayment due to arrangement fees etc, as these are added to the value of the loan.

opinions4u

£13,000 at 1.25% a month (roughly) is around £160ish a month. 2 months gone plus interest to the end of the next charging period would be nearly £500, plus any upfront fees linked to the loan.

In other words, £600 doesn't seem wholly unreasonable.