Think I may have been missold a car loan

firedrone

I bought a Peugeot 207 on finance from WLMG March 2011 now i went to check on my status of my loan and the result they gave me was far higher than expected, the loan was for 55 months. The salesman said it was a straight 10% apr nothing else, and i kept asking as there was a 20.55% apr written on the paper next to the 10%, and he was insistent that it was 10% now going over some online calculators it's showing up around that 20% mark! I'm not sure what I should do as I signed the papers and I feel like i've been properly conned.

DCFC79

Why did you not walk away when you mentioned the 20.55% was written next to the 10% on the paper ?

BugsyBrowne

Yep the fixed rate APR is normally double what the flat rate APR is.

20.55% is extremely high for car finance.

firedrone

I asked on multiple occasions about it and he kept insisting it was 10%

paddyrg

Ahh a 10% flat rate loan - equivalent is around 20% APR.

Apples2

firedrone wrote: »

I asked on multiple occasions about it and he kept insisting it was 10%

He was simply stating the Interest Rate.

If you had been demanding to know the APR, he should have said 20.55%

This is entirely normal for Car Salesman, I'm not aware of any other sales pitch which works this way, they commonly take advantage of it to sucker punters into signing up.
He wasn't wrong in stating 10% but it is the Flat Rate as has been described above.

Aside from this it sounds like it was clearly stated on the agreement which you have acknowledged reading, but signed it anyway. Lesson learned..

StuC75

Both percentages are essentially the same, albeit different at what they mean..

without knowing the true details, say a 5k loan over 55 months at 20.55% rate would have a payment of circa £141 (using excel pmt formula).

Over the duration of the loan, 7,758.67 would be repaid (55*141.07).
this is interest of £2,758.67 - or roughly £601 for EACH year of the agreement, which expressed as a % of the original 5k is 12% of the original amount borrowed - as an Annual equivalent.

The dealer showed you all the information but had you focus more on the lower %, when both numbers are valid..

MonkeyMad

If you had the monthly repayment and term, why didn't you compare the total cost of this loan to one from any other lender who would tell you the APR to see which was the better deal, BEFORE you took it out? Did he actually tell you the APR was 10% or the interest was 10%?

eschaton

Mis-sold car loan? No

Didn't read and understand agreement before signing? Yes