Final payment on loan - can they do this?

MrsL*

Hello,
Just after some advice - I hope there is someone out there who can help?!
My car loan was taken out in May 2007 over 59 months - I have paid £145.49 every month by direct debit and have never missed a payment. I called them this week to check when my final payment would be and was told that on 1st June I'll be paying £240 and then £25 on 1st July. I queried this and was told there is an extra £90 for finishing the loan and a £25 charge for changing my payment date in October 2007. Alas, I cannot find my original agreement and only have a few statements from past years, but can they do this? I wondered if some of the recent High Court judgements regarding extorinate banking charges might be relevant? I want to contest this but don't want to waste my time.
Thanks for reading, and thanks in advance for any help you can offer!

opinions4u

It's quite common with car finance. If it's on the original agreement, it's legal.

There is no way an extra £90, that will be included in the APR calculation, can be described as extortionate.

Which high court judgements did you have in mind?

gingeralan

Pretty standard arrangement as far as finance agreements go. I understand your opinion, but the only way to avoid this is either pay cash or use a personal loan from your bank as these sort of fees will just be incorporated into your interest rate.

It's expensive, but it will be on your original agreement, take it on the chin. Not really worth the bother complaining, can't really see you getting anywhere with a complaint.

Apples2

Seems an odd thing to question, less than 100.

How much was the book price at purchase?
How much have you handed over for it now the deal is almost ended?

I bet there is a wide margin.

Do you still see it as your pride and joy?

MrsL*

Thank you for replies - OK, maybe in the grand scheme of things these charges aren't extortionate. However for my £145 monthly repayment to suddenly jump to £240, it does pinch a wee bit! I just presumed (albeit naively) that they would have been stretched across the whole term rather than being whacked on right at the end.
The high court judgments I refer to are the rulings that an 'admin fee' of £25 for missed payments is excessive. I thought maybe the same would go for an admin fee of £25 just to change a date!
No matter, I live and learn.
Thanks again anyway.

DevCoder

MrsL* wrote: »

Thank you for replies - OK, maybe in the grand scheme of things these charges aren't extortionate. However for my £145 monthly repayment to suddenly jump to £240, it does pinch a wee bit! I just presumed (albeit naively) that they would have been stretched across the whole term rather than being whacked on right at the end.
The high court judgments I refer to are the rulings that an 'admin fee' of £25 for missed payments is excessive. I thought maybe the same would go for an admin fee of £25 just to change a date!
No matter, I live and learn.
Thanks again anyway.

Unfortunately it's not the same (and the ruling on bank charges was lost and given up on a long time ago).

I know it sounds condescending and I don't want to come across as such but please read every bit of any T&C you sign up to in future (if you can get your head around them, if not then post here and someone will be along with excellent advice).

aliasojo

Apples2 wrote: »

Seems an odd thing to question, less than 100.

Perhaps this is a trivial amount to you but I would query any amount I was uncertain about.

No harm in your asking OP, shame the answers weren't more positive for you. As you say, live and learn.

Apples2

aliasojo wrote: »

Perhaps this is a trivial amount to you

I'm not implying £100 is a trivial amount of cash, but it is compared to repaying a car over 5 years.
An huge period to repay a car over which the borrower would have thrown a huge amount more than £100 down the drain.

My point was, Why does £100 seem a big problem when all that additonal interest was perfectly acceptable?

DevCoder

Apples2 wrote: »

I'm not implying £100 is a trivial amount of cash, but it is compared to repaying a car over 5 years.
An huge period to repay a car over which the borrower would have thrown a huge amount more than £100 down the drain.

My point was, Why does £100 seem a big problem when all that additonal interest was perfectly acceptable?

Because to the end payer its larger lump sum, its easier to oversee or ignore the fact you're paying a huge interest amount if its spread over a large period to the point the individual payment amount is "low"

I know what you're saying, just playing devil's advocate

aliasojo

Apples2 wrote: »

My point was, Why does £100 seem a big problem when all that additonal interest was perfectly acceptable?

Because the interest was known and expected. The other charges weren't.

flashg67

AFAIK with an HP deal, there needs to be a final amount to actually give you title to the goods - until then you don't actually own the goods - eg the car, hence the term hire purchase.

I'm not saying this needs to be £100, or any set amount, but in the agreements I've had it does always show this on the costs breakdown. Easy to miss though in the excitement of getting a new motor I guess!