Need help regarding contract law for Loan

Phil_Linder

Hi all, I recently bought a car and took out finance which is via Black Horse. When I was sold the car I was told by the dealer the finance would be at 7% interest which was lower then the 12.8% I was able to get myself.
After dashing round to get different ID docs and returning to pick up the car, the loan agreement was put in front of me which I signed (stupidly without checking over).
When I got home I saw the APR on the loan was 19.4% and there was £300 in fees split bewteen the beginning and end of the loan which I wasn't told about.
I know under TCF that this is a breach of these regulations, but I have complained to Black Horse and they have taken the typical stance of me signing the agreement so its my fault.

Has anyone been through this before and does anybody know where I stand? The car dealer was Motor Range by the way. Avoid them like the plague. They are bad cowboys.

Any advice is appreciated.

Gaz83

Do you have anything in writing confirming the 7% interest rate quoted?

Were the £300 fees mentioned in the contract?

TadleyBaggie

You got caught by the standard motor industry practice of quoting the "flat" interest rate, which is often less than half the APR.

Bottom line is you should have read what you were signing yourself up to. If the rate and fees were listed in the finance form you will struggle to get Black Horse to back down. Same happened to me many moons ago, never again.

Phil_Linder

Hi Gaz. No the 7% is not in the literature. We had a conversation and was told the rate was 7%. I was then told the repayment amounts (Which were correct) but was not told these were against a 19.4% APR. There is no way I would have taken that though as I'd already had a loan quote for much lower.

The fees are on the agreement which is all small print. I saw them when I got home.

National_Debtline

Hi Phil,

Sorry to learn about the situation. In accordance with the Consumer Credit Act you can cancel the finance within 14 days of signing. This may not allow you to cancel the contract to purchase the actual vehicle - but it would, at least, allow you to seek the finance from another source.

Sadly, I cannot speculate whether or not you have further recourse - but do consider seeking legal advice if you wish to take matters further.

Very best wishes,

David @ National Debtline.

Brock_and_Roll

For what it is worth, I think it is high time that the quoting of "flat rates" by the motor trade and others be outlawed. It has taken the UK population many years to understand APRs!

Phil_Linder

Thanks for your responses guys. I know quite a bit about interest rates and APR's but the response from Black Horse and Motor Range is almost criminal. They use loop holes to explain rates and quite frankly its done to confuse and mislead people to make products sound more appealing.

I will however be forwarding this case to the Ombudsman. Regardless of whether I think I will win, I know BH will have to pay the £550 case fee. So they may take the charges from me. But I will make sure they don't benefit from it in the slightest.

Gaz83

Phil_Linder wrote: »

Thanks for your responses guys. I know quite a bit about interest rates and APR's but the response from Black Horse and Motor Range is almost criminal. They use loop holes to explain rates and quite frankly its done to confuse and mislead people to make products sound more appealing.

I will however be forwarding this case to the Ombudsman. Regardless of whether I think I will win, I know BH will have to pay the £550 case fee. So they may take the charges from me. But I will make sure they don't benefit from it in the slightest.

You need to wait eight weeks before referring a case to the Ombudsman. Your second part isn't quite true. There's no guarantee it will become a chargeable case - if the Ombudsman think your complaint is trivial or frivolous then they won't charge BH.

By all means try, but the fact you signed something you didn't read isn't going to look too good for you, I would think.

SeanG79

With the FCA having taken over regulating the Consumer Credit Industry, I would consider approaching them. The FCA is all about treating customers fairly.

You said you recently took the finance, was this within the last 14 days? If so, you are within your rights to cancel the finance agreement and seek an alternative means of financing it.

Dealers speak in flat rates, but the pre-contract (SECCI) will highlight all payments, including documentation fees and option to purchase/completion fees. It will also clearly state the APR.

R_P_W

Phil_Linder wrote: »

Hi all, I recently bought a car and took out finance which is via Black Horse. When I was sold the car I was told by the dealer the finance would be at 7% interest which was lower then the 12.8% I was able to get myself.
After dashing round to get different ID docs and returning to pick up the car, the loan agreement was put in front of me which I signed (stupidly without checking over).
When I got home I saw the APR on the loan was 19.4% and there was £300 in fees split bewteen the beginning and end of the loan which I wasn't told about.
I know under TCF that this is a breach of these regulations, but I have complained to Black Horse and they have taken the typical stance of me signing the agreement so its my fault.

Has anyone been through this before and does anybody know where I stand? The car dealer was Motor Range by the way. Avoid them like the plague. They are bad cowboys.

Any advice is appreciated.

You didn't read the agreement at all before signing it?!

bayzat

You should always focus on the monthly installments, as the 7% was a flat rate (dirty sales practice!)