Giving Car back and Owing full Interest

Cornucopia

Shakin_Steve wrote: »

This is the best I can find:

https://www.thecarloanwarehouse.com/help-centre/apr-and-flat-rate/

That looks like a basic definition of the difference between Flat Rate and APR. In fact, Flat Rate is nearly gone (and good riddance).

I would check your settlement figures again, and if necessary seek a professional opinion from CAB or Trading Standards.

iolanthe07

In fact, Flat Rate is nearly gone (and good riddance).

Except for car dealerships, who seem to be able to get away with headlining it even if the APR is buried in the small print.

Sparx

OP was this a PCP or HP deal? If either of the 2 the return of the vehicle should've been processed as a Voluntary Termination.

This would mean he would only have to pay up too 50% off the total amount payable (of the balance, not the loan, still much more viable!).

It sounds like Black Horse have done this as a Voluntary Surrender. Which should only be done if the car wasn't roadworthy / a non-runner. This method they just deduct the auction value from the full total balance with interest, then you still pay the whole lot...

Get on to finance co and ask how they have handled this. Did your son sign any forms or agree to anything such as the above? In short you want it done as a VT so only 50% off the balance is payable. Again assuming the car was roadworthy and had no repairs needed etc.

Shakin_Steve

Sparx wrote: »

OP was this a PCP or HP deal? If either of the 2 the return of the vehicle should've been processed as a Voluntary Termination.

This would mean he would only have to pay up too 50% off the total amount payable (of the balance, not the loan, still much more viable!).

It sounds like Black Horse have done this as a Voluntary Surrender. Which should only be done if the car wasn't roadworthy / a non-runner. This method they just deduct the auction value from the full total balance with interest, then you still pay the whole lot...

Get on to finance co and ask how they have handled this. Did your son sign any forms or agree to anything such as the above? In short you want it done as a VT so only 50% off the balance is payable. Again assuming the car was roadworthy and had no repairs needed etc.

Don't think OP mentioned Black Horse.

Sparx

Shakin_Steve wrote: »

Don't think OP mentioned Black Horse.

It was your post I confused with OPs. Not that it matters though lol.

flashg67

I'd expect there to be a rebate on the interest.

A rebate will be calculated on early settlement by means of a standard industry (complicated) formula. See if you can understand this! http://www.legislation.gov.uk/uksi/2004/1483/schedule/made

I've just requested a termination figure on my PCP and there was a rebate of around £300 on a settlement of around 6.5k

Asking for a voluntary termination can't be done until or unless 50% or more has already been paid off, so unless the OP had got to this point, a VT wouldn't be likely be possible on a 5 year deal, unless he'd put down a hefty deposit.

Sparx

@flashg67 common misconception but you can Voluntary Terminate at any point. You are just setup on a separate repayment plan to meet 50% of the repayments.

At least that's what the last 2 car finance co's I've worked with have done, including the one I am at now...

Nearlyold

Usually if the loan has already been defaulted the right to VT is not available, it's not clear from the 1st post whether a default occurred.

Sparx

Finance co can refuse to allow VT if the account has defaulted.

Likely the case what happened here, as OP mentions default...

Lexi-Lisa

Thank you everyone.. I will look into your suggestions..