Car loan settlement figure

allan1983

Hey guys.
As Ive now discovered that instead of being a HP agreement, my car finance was actually a personal loan agreement, Im trying to work out what the settlement figure would be so I can work out if I can sell for profit or have to make up a loss.

Ive requested a figure from the finance company (FGA Capital trading as Fiat Financial Services) and I cant see how theyve come up with the figure they have?! (way too high surprise surprise)

So, I need someone with a bit of mathematical prowess to help me to calculate what the figure should be?

I guess there will be legislation involved, and Im sure Ill be liable for some sort of fees, but I can only assume my calculation is wrong:

(loan is over 60 months)
Opening balance/60= monthly payment Inc. interest
Initial loan amount/60= monthly amount without interest
Difference= monthly interest.
Monthly interest X amount of months left to run= amount I should get rebated (they cant charge interest after Ive paid up surely?!)
Amount left to pay-Rebate= settlement figure?

If this is confusing, Im open to anyones suggestion of how to make it work

Thanks!
Allan

malkyh

I suggest you ask them the question. See if they will give you a breakdown of the charges.

allan1983

I do intend to, but I like to be fore-armed with as much info as I can muster.

CLAPTON

the interest isn't divided equally over the 60 months

this is because in the early months of the loan you are paying a lot of interest because you owe a lot; as the months go by the capital starts to fall so the interest gets less.


if you post up the figures then we could check to see if they are reasonable

Apples2

Not a cat in hells chance you will profit from financing a car. You made a massive loss as soon as you drove away in it.

allan1983

Not a cat in hells chance you will profit from financing a car. You made a massive loss as soon as you drove away in it.

I know that:(:(:(
I just mean sell the car for more than I have left to pay at this point.

@Clapton, what do you need to know?
The original loan amount was £7502 (£6000 for the car and the rest for GAP insurance if that makes a difference)
60 month loan period.
15.5% APR
Paying £171.97 per month
Last month set to be November 2013

Looking for a figure having paid Febs' payment.

CLAPTON

allan1983 wrote: »

I know that:(:(:(
I just mean sell the car for more than I have left to pay at this point.

@Clapton, what do you need to know?
The original loan amount was £7502 (£6000 for the car and the rest for GAP insurance if that makes a difference)
60 month loan period.
15.5% APR
Paying £171.97 per month
Last month set to be November 2013

Looking for a figure having paid Febs' payment.

it depend a bit on the payment details; was there a payment free period at the beginning of the loan etc

but in the early months you were paying over £90 in interest per month (approximately 7502 x 15.5% /12 per month)

as the months go by you are reducing the capital and hence the monthly interest.

after about 39 months the capital remaining will be around 3,400 - 3,500 and they can add a couple of month interest to the settlement figure. (I have to say my figures always seem to work out a bit lower than loan companies)

Common_Sense_2

I have yet to find a company who has calculated a settlement figure incorrectly, in spite of the number of posters here who query the settlement figure they've been quoted.

The formula for working it out is set out clearly in legislation. Finance companies then build this formula in their computer systems as they cannot trust suh an important calculation to a customer service adviser armed with a calculator, pencil, paper, and a confused look on their face.
Any computer system is then vigerously tested to ensure that it works (the OFT / FSA can demand calculations to check).

allan1983

Well according to my calculations, if I let the loan run, ive got £171.97 X 21 months= £3611.37 to pay.
Theyve given me a settlement figure of £37** (it was definitely £3,700 but I cant remember the tens and units figures)

So will I in fact be charged MORE for ending early??

CLAPTON

do you have the contract; it should detail the early settlement figures

get a early settlement quote in writing; the person you spoke to may not have access to a proper early settlement figure and may have simply have given you the amount remaining as per your original agreement

stusan

Hi

Go back and check your agreement especially the breakdown of payments. This exact thing happened to my hubby and I 2 weeks ago it turned out we had both forgotten that the final payment was 1/2 as much again as payments 2 -39 on our Honda Finance agreement.