"Option FEE" - Option to BUY your vehicle AFTER full payment has been made

Tek2014

Hi,

Has anyone heard of an "Option Fee" as part of a loan?

I believe this to be a final payment if I want to keep my vehicle (motorbike) after I've repaid £5023.30 for a £3245.36 loan over 30 months?

I've been told by CarLoan4u that this is standard with ALL finance companies! Is it?

Unfortunately I don't have good credit rating as I have 2 defaults for small amounts of money ~£450. As a result of this I need to use these daylight robbing money lenders just to try and get finance to help rebuild my credit rating (and yes I realise I caused the problem in the first place but that's of no comfort...).

I just want to check if this is true as PPI springs to mind!!!!

Any advice or info greatly welcomed

Rafter

Afraid if it was on your original credit agreement and hasn't increased you aren't going to get far with a mis-selling claim.

Other car loans and mortgages have this kind of exit administration fee.

Good luck and enjoy the better biking weather!

R.

sapoverde

I think this is a standard within the Industry but it should not be a huge amount. Hope someone else can shed more light for you. Good luck.

Tek2014

Hi,

thanks for taking the time to respond I do appreciate it.

My question was about possible finance I'm currently considering and I had never heard of this "option fee" - being cynical I didn't trust what they said!!

However, with these posts and other enquires I made it appears to be correct and legal!

Many thanks once again

fozmcfc

I had this with a laptop once, sold through my workplace. After all the payments, I had to pay £50 to keep it, or pay £50 for them to pick it up from me. It was a no brainer in my case.

Paying back £5023.30 for £3245.36 isn't that bad compared to a lot of people who get loans when they have bad credit, in many cases you'd be looking more like a 50%- 70% APR and paying back £7k minimum.

At least the company gave you the chance, when I've no doubt, most others wouldn't have given you any finance at all.

dealer_wins

Tek2014 wrote: »

Hi,

Has anyone heard of an "Option Fee" as part of a loan?

I believe this to be a final payment if I want to keep my vehicle (motorbike) after I've repaid £5023.30 for a £3245.36 loan over 30 months?

I've been told by CarLoan4u that this is standard with ALL finance companies! Is it?

Unfortunately I don't have good credit rating as I have 2 defaults for small amounts of money ~£450. As a result of this I need to use these daylight robbing money lenders just to try and get finance to help rebuild my credit rating (and yes I realise I caused the problem in the first place but that's of no comfort...).

I just want to check if this is true as PPI springs to mind!!!!

Any advice or info greatly welcomed

You would have much happier had they told you to do one when you applied I take it!!

Its a strange but true fact that people who have a history of being unable to meet their finance commitments are charged a higher rate than people who can. Cant think why can you?

InsideInsurance

It sounds like a hire purchase agreement in which case the options fee would be fairly common and really is little more than another way for the lender to make money

pvt

It's fairly normal and should be included in the APR calculation anyway.