Moneybarn Car Loan Problem. Advice Please.

MartinSpencer

Hi All.

I had a car loan from Moneybarn in August of 2013. The details are below :

Loan Details :
Amount of credit : £11,033.00
Total Payable after 24 Months : £17,334.97
Price of Car : £13,000.00
Cash Deposit : £1967.00
Total Interest Owed : £4334.97

I am self employed but my business has a reasonable turnover. Unfortunately what I did neglect to do was have any type of insurance cover for myself should i be ill or injured.

Payments were all on time :

£529.93 per month. Payments made £2719.72 (5 Months)
In Month 5 (Jan 2014)I broke my ankle while on site. The break was pretty bad and left me unable to walk, drive and work for another 5 months, during this time i also contracted an infection and was hospitalised and had to have another operation.

Anyway, in March 2014 i still had no light at the end of the tunnel as to when i was going to be able to get to work again and unfortunately Moneybarn terminated the agreement and collected the car.

All was quiet until Aug of this year (2015). They have informed me that if i do not pay the remainder of the full amount of the loan they will take me to court.

This works out as follows :

(Monies Money Barn Have Received)
Deposit and Repayments : + £4686.72
Resale of the Car at Auction: + £10150.00
Total Money Collected : + £14836.72

(Monies Money Barn Have Paid Out)
Collection & Resale Fees : - £918.00
Total Loan : - £11,033.00
Total Money Paid Out : - £11,951.00

Money Collected - Money Paid Out : + £2885.72 profit to Moneybarn.


But, even though over 5 months they made that much profit and they cancelled the agreement they still want me to pay the additional £4686.72 interest payments they would have received had the loan gone full term.

So essentially my question is can they do that? Repayment of the initial loan amount in full I agree with. A termination fee I agree with if its realistic and fair. But the Full Amount of the Loan and All Interest for a vehicle i used for 5 months (and had sat for 3) on a loan of over 30 Months before they took it away, well that's not right is it? Or is it?

Your thoughts and advice on how I should proceed would be very welcome.

Thanks

Nearlyold

Yes they can do this unfair though it seems. Have you tried negotiating with them?

National_Debtline

Hi Martin


Yes I am afraid that where the lender terminates a HP agreement in this way, they are entitled to seek repayment of the outstanding balance from you (less the proceeds they fetch from the sale).


Your best bet now would be to negotiate an affordable payment arrangement reflecting your current circumstances. They won't be able to recover the full sum from you in one go if you simply don't have the means to pay it. The threat of court action is standard procedure and is usually intended to scare you into paying, more than anything. I would start by putting together a personal budget using one of the following links:


http://www.stoozing.com/calculator/soa.php


https://www.mymoneysteps.org/


Dennis
@natdebtline

MartinSpencer

No way really! That means i would have paid £6.5k in interest for a car that was used for 5 months, that's outrageous!

I am truly shocked that they can do that. They haven't even made a loss they made a profit over the period that the loan was in place before they terminated it. I will be paying this money out but I wont have any asset to show for it.