VW Finance Purchase Fee

ihatedebtcollectors

Hi,

I hope someone can offer advice.

We recently used VW Finance Services to finance a used car and signed the paperwork in the dealership.

We have now received a copy of the agreement where they have included a "purchase fee". I do not remember this being pointed out - I didn't sign the agreement, my partner did (she did not notice this at the time).

(From their website)
End of agreement: What happens next?

There are several ways to conclude a Hire Purchase Agreement:
Early Settlement – You can settle a Hire Purchase agreement at any point in the agreement by paying the outstanding balance and the Option to Purchase fee to the lender. There may be a charge for settling the agreement early. Speak to your lender for further information.
End of Agreement / Contract - At the natural end of a Hire Purchase contract, once all the contracted payments have been made, you can pay the Option to Purchase fee and take legal title to the car. Alternatively, you can choose not to pay this fee and simply return the car to the finance company.
Fees / Charges - Finance companies will disclose all fees and charges in the terms and conditions of the Hire Purchase agreement.


I'm baffled by this:

They offer us a loan (the amount does NOT appear to include the "option to purchase" fee). We repay or settle the loan early. They then ask for a further £150 to "transfer ownership".

I've just argued with the dealership that no judge in his/her right mind would agree that the car still belonged to the finance company.

If we pay them what is owed, they have no legal claim (as I see it).

Also, the dealer also said that he "read it as saying the last monthly payment" (as do I) therefore if we settle and never make the last "monthly" payment, then they will not charge the £150.

Another point to note that on the contract we signed (and have a copy of) there is no mention of the "purchase" fee if we settle early, only in the section referring to the full-term length of the loan.

Any ideas??

Apples2

Would have been a good idea to read it and clear up any questions before signing it I suppose.

Once signed, you are over a barrel. If you don't like it, make sure you have 14 days to cancel and get another (Personal) loan. Pay the finance off directly and stick to normal credit lines.

ihatedebtcollectors

Thanks - Agree with the "reading" first... I didn't read this. Ah well.

I'll just settle the loan early and refuse to pay the "purchase fee".
I'd love them to try and reposess the car - I'm sure they would not get very far in court.

withabix

Are you paying for the car IN FULL via this finance, or is this PCP finance with a lump sum payment at the end?

ihatedebtcollectors

Nope, paying the car in FULL.

I could understand a "option to buy" on a PCP, but not a HP, payed in full.

ihatedebtcollectors

Car = 10,500
Dep = 4,000

Loan = 6,500

6% - if we let the loan run 4 years, repay 12,500

If we pay early (say, year 1) repay = 6,500+6%

chanz4

Its the cost /admin to remove from the hpi register etc. Op refusing to the pay the last fee may just cost you a default.

opinions4u

ihatedebtcollectors wrote: »

I'll just settle the loan early and refuse to pay the "purchase fee".
I'd love them to try and reposess the car - I'm sure they would not get very far in court.

No, but they might stuff you for being able to borrow for six years after the event.

You've signed up to the £150. You are contracted to it. Fail to pay it and your credit file will be trashed.

~Brock~

ihatedebtcollectors wrote: »

I'd love them to try and reposess the car - I'm sure they would not get very far in court.

I think they would do pretty well in court actually. It would be a pretty open and shut case. By signing the agreeemnt, the contractual terms had been agreed to and the only reason it hadn't been honoured was due to your point blank refusal. Seems pretty simple to me.

ihatedebtcollectors

Thanks for the replies.

Surely it's an unfair term? How can we purchase something we already own? The HPI register can only have cars on it where there is HPI outstanding?

I disagree that they can "trash" my credit file. This "option to purchase" was not part of the original loan, thus will not show as outstanding on my credit file. Once I've paid the instalments, settled the account - my credit file will show £0 AND NOT£150.

Best they can do is try and repossess the car at the end of the term if I do not pay. This involves court and them proving the car is theirs surely..?

KingElvis

Why on earth would you risk a potential default for the sake of £150?

There are people on here who would gladly give you £150 if you could rid them of miserable defaults on their credit file.

I would pay it and then, if you wish to prove a point, start a small courts claim against them....I doubt you'd get far though becuase of the big dirty great signature on the agreement.

Good luck.