Car finance balloon payment

thebigripoff

I have a personal finance agreement on my car and having paid off the finance with a substantial amount of interest never having missed a payment i am told i need to make a balloon payment of over £200 before i can own the car i have already paid for.
they tell me it is to cover administration. as the vehicle is registered in my name all i was expecting was a letter saying thanks for being such a good customer

any ideas as to why i need to make this payment ??

bod1467

Check your contract T&Cs ... if it's there then you (probably) need to pay it. You could argue that administration should be charged at cost (+ reasonable profit) ... whether £200 would be deemed reasonable in such circumstances I don't know - I've no idea what level of administration they have.

thebigripoff

Thanks the balloon payment was well hiden in the t&c and completely avoided by the salesman
am looking for similar stories from people who may have had the same problem?

Alice_Walker

How well hidden was it, was it in a smaller font than the rest of the terms, or a different colour that made it unreadable? Perhaps written in a style that was difficult to understand or misleading?

Or did you just not read the terms and conditions before agreeing to the deal?

neilmcl

thebigripoff wrote: »

Thanks the balloon payment was well hiden in the t&c and completely avoided by the salesman
am looking for similar stories from people who may have had the same problem?

That's not the "balloon payment", it's probably a final purchase fee or similar. Balloon payment refers to the Guaranteed Future Value (GFV or GMFV) which is the value of the car at the end of the agreement period which you need to pay off. Either way it will be documented fully in your agreement, if it's not there then you don't need to pay.

Edit: I've made the assumption that your car's current value isn't only £200, if it is then yes this will be the balloon payment but again this will have been very clear in the agreement T&Cs.

neilmcl

thebigripoff wrote: »

Thanks the balloon payment was well hiden in the t&c and completely avoided by the salesman
am looking for similar stories from people who may have had the same problem?

The only people who will have had "the same problem" will be others like yourself who don't read the finance agreements they're signing up to.

thebigripoff

neilmcl wrote: »

the only people who will have had "the same problem" will be others like yourself who don't read the finance agreements they're signing up to.

a 7 page document writen by a lawyer paid by finance comapny to riipoff the customer i found your comment most constructive (sarcasm is free ) inteligent answers require a litle thaught

bazzyb

The £200 is likely to be an option to purchase fee, or administration fee.

This should have been stated in the pre contract information, showing the final monthly payment different to your usual monthly payment. It also should have been included in the 'total amount repayable' calculation. Do you still have a copy of the paperwork and, if so, was it included in this way?

Alice_Walker

thebigripoff wrote: »

a 7 page document writen by a lawyer paid by finance comapny to riipoff the customer i found your comment most constructive (sarcasm is free ) inteligent answers require a litle thaught

You signed up to borrow several thousand pounds. Surely not too much hassle to read seven pages?

thebigripoff

I financed a car sold for £2000 24 payments of £124 = £2976 + a balloon payment of £240 they refer to it as a transfer of ownership payment or somthing i will identify the exact wording but a two year agreement is 24 months not 25

thebigripoff

bazzyb wrote: »

The £200 is likely to be an option to purchase fee, or administration fee.

This should have been stated in the pre contract information, showing the final monthly payment different to your usual monthly payment. It also should have been included in the 'total amount repayable' calculation. Do you still have a copy of the paperwork and, if so, was it included in this way?

That now makes more sense my question is why cant they just be upfront about it i dont mind paying its just the way they do it