Audi Finance - credit-report balance is higher than the finance agreement

Arthur_Babbage

I bought an Audi on a PCP in March. I borrowed £18,390 (according to the finance agreement) with a £9,500 deposit downpayment (£7k from me and £2.5k contribution from the dealership). Since then I have made the first two monthly repayments, of £238.41.

My credit report shows I have actually borrowed £21,474 as of 30/04/2019.

I spoke to Audi this morning and they provided me with the following figures:

Agreement Balance: £21,235.95
Interest Saving: £2,926.66
Arrears: £0.00
Total amount payable: £18,309.29

They claimed the discrepancy between what I think I have borrowed and my credit report is due to the interest over the 4-year period, including on the balloon payment (irrespective of whether I choose to pay that £10k amount at the end of the term). I was also told this amount of £21,474 was a fixed amount, which will not reduce on my credit report, even as I re-pay £238 each month.

Is that right?!

BoGoF

What was the total repayable on your finance agreement, including balloon payment?

When do you make your monthly repayments? It may just be a timing issue as your credit report doesn't update in real time. You should be able to see how many payments have been made on your credit report.

The credit report balance should reduce every month.

Arthur_Babbage

I make the repayment at the beginning of each calendar month. Copying from the finance agreement I signed in March, re: your first two questions:

Vehicle Cash Price: £27,890.00
Less: Advance Payment: £9,500.00
Amount of Credit: £18,390.00

The Rate of Interest (calculated in the same way as the APR, but excluding fees) is 5.84% pa. This rate is fixed for the duration of this Agreement. The
interest payable is calculated at the outset of the Agreement , and is included in the monthly repayments stated below. The APR is 5.9%. The APR is
calculated on the following assumptions: repayments commence one month after the credit is drawn down; you make all repayments on the agreed
dates; you do not incur any Excess Mileage Charges; and no variation occurs under this Agreement. The Total Amount Payable (comprising the
Advance Payment, Amount of Credit, Acceptance Fee, Interest and Option to Purchase fee) is £31,212.77.

You must pay the Advance Payment to us when you sign this Agreement . You must then make: one repayment of £238.41 on a date set by us (which will
be at least one month after the date of this Agreement); followed by 46 monthly repayments of £238.41, on the same date of each successive month;
followed by a final payment of £10,497.50 payable 47 months after the date set for the first repayment. The maximum annual mileage is 9000 and the
maximum total mileage is 36000. The Excess Mileage Charge payable pursuant to clause 11 of the Terms is 8.4p (incl. VAT) per mile. To exercise the option
to purchase the Vehicle, you must add the Option to Purchase Fee of £10.00 to the amount of the final monthly payment stated above.

Arthur_Babbage

(Balloon payment is £10,497.50)

Nearlyold

The total amount still to pay at the start of the agreement was 47 X £238.41 = £11,205.27 + the Balloon of £10,497.50 + the £10 purchase Fee = £21712.77. (This figure includes all the interest that will arise over the term of the agreement)

You have made two payment of £238.41 so the current balance to pay to the end of the agreement is £21,235.95. Your credit report is obviously 1 month behind so shows the current balance to pay to the end of the agreement as £21474.36.

The current balance to pay to the end of the agreement is obviously not the same as the amount borrowed nor the amount you would need to pay today to clear the loan (ie the current settlement figure), this is because in the latter case you would save the interest that would otherwise arise if you kept the loan until the end of the term. ie the "Interest Saving" of £2926.66 which Audi gave you in their settlement figure calculation making the settlement amount £18309.29.

The Credit report is not reporting the amount borrowed it's showing the amount still to pay over the remaining term of the agreement

DthenG

Do you know who the finance is provided by?



I have a personal loan with First Direct - on my credit report the figure they show is the total amount payable over the duration of the loan, as opposed to what I currently owed if I called to settle it. Not sure if the same is happening here.

Arthur_Babbage

Nearlyold wrote: »

The total amount still to pay at the start of the agreement was 47 X £238.41 = £11,205.27 + the Balloon of £10,497.50 + the £10 purchase Fee = £21712.77. (This figure includes all the interest that will arise over the term of the agreement)

You have made two payment of £238.41 so the current balance to pay to the end of the agreement is £21,235.95. Your credit report is obviously 1 month behind so shows the current balance to pay to the end of the agreement as £21474.36.

The current balance to pay to the end of the agreement is obviously not the same as the amount borrowed nor the amount you would need to pay today to clear the loan (ie the current settlement figure), this is because in the latter case you would save the interest that would otherwise arise if you kept the loan until the end of the term. ie the "Interest Saving" of £2926.66 which Audi gave you in their settlement figure calculation making the settlement amount £18309.29.

The Credit report is not reporting the amount borrowed it's showing the amount still to pay over the remaining term of the agreement

Thanks for clearing that up - all makes sense now!

Arthur_Babbage

DthenG wrote: »

Do you know who the finance is provided by?



I have a personal loan with First Direct - on my credit report the figure they show is the total amount payable over the duration of the loan, as opposed to what I currently owed if I called to settle it. Not sure if the same is happening here.

Volkswagen Financial Services, trading as Audi Financial Services.