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Unregulated Car Finance - Disputed Interest Rebate

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Unregulated Car Finance - Disputed Interest Rebate

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jason.parker.86jason.parker.86 Forumite
161 posts
Part of the Furniture 100 Posts
Hello Guys,

A long story very short - I purchased through my company a vehicle from Mercedes Benz and opted to take the finance available. 
After purchasing the vehicle I had a change of mind due to surplus funds available in my account and decided to purchase the car outright and sought a settlement figure. This was done within 30 days of taking delivery of the vehicle. 
The agreement does not mention any charges, fees, cancellation levvys... simply that when the agreement is cancelled / settled early a rebate of interest will be given back against the total amount borrowed (including the interest).
My finance agreement does not mention the interest as a rate, only an amount. I do know however the rate to be 6.05%. 
When requesting a settlement figure the interest rebate is approximately double what I calculated it to be.
I calculated the interest using an online calculator ( https://www.themoneycalculator.com/vehicle-finance/calculators/pcp-personal-contract-purchase-calculator/).
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Are the finance company obliged to give me a breakdown of the interest rebate? They claim they do not have to give this.
Finance company are advising me to contact the Financial Ombudsman, who claim they do not get involved in unregulated agreements? Is this true?
Can I settle the finance and take Mercedes Benz to Small Claims court for the difference in what they calculate the interest to be and what I do? 
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Just to give you some idea, I borrowed approximately £38,000 and the interest specified on the agreement was £7,300. After 35 days they claim the interest rebate to be £1,000 less than the amount they applied to the agreement.
Can anyone give me some advice on what to do now?
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Replies

  • edited 10 February at 7:54PM
    zx81zx81 Forumite
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    edited 10 February at 7:54PM
    What's the settlement figure, the term and what payments did you make?
  • edited 10 February at 9:32PM
    jason.parker.86jason.parker.86 Forumite
    161 posts
    Part of the Furniture 100 Posts
    edited 10 February at 9:32PM
    I was not sure I could post this on here but details are below of how they calculated settlement figure:

    Total repayments: £45,973.52
    Minus amount paid to date £512.99
    Minus Rebate: £6,352.24
    Plus Settlement Fee: £0.00
    Option to Purchase Fee: £10.00   

                                                                                                                  
    Settlement Total (TAP) : £39,118.29

    -

    I borrowed £38,604.00 over 48 months, with monthly payments of £512.99. 


  • foxy-stoatfoxy-stoat Forumite
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    Did you opt for any extended warranty, GAP insurance or any other options when you bought it?
    What do you think the settlement figure is?
  • jason.parker.86jason.parker.86 Forumite
    161 posts
    Part of the Furniture 100 Posts
    No nothing. Agreement simply States when cancelled I will get an interest rebate .nothing about any deductions.
  • brisbris Forumite
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    Have you read in full the contract you have with them? As you bought it through a company then this is a business contract you took out not a personal one, so the PCP calculator won't necessarily reflect the terms of your purchase. 
    You could of course take the case to a small claims court and sue them for what you think they owe you, this would at least force them to show their calculations to the court.
  • jason.parker.86jason.parker.86 Forumite
    161 posts
    Part of the Furniture 100 Posts
    Hi,
    Yes I have. Their is no mention of cancellation fees.
    The only thing is says is that when you settle early you will be given a rebate of interest. It does not specify how much that rebate is, or how it is calculated. 

    I am unsure if this is a good thing or bad. If they do not disclose the rebate or its definition then I am sure they could not legally argue it is anything other than a standard fixed rate interest agreement.

    The interest rate itself is not disclosed on the agreement. 
  • jason.parker.86jason.parker.86 Forumite
    161 posts
    Part of the Furniture 100 Posts
    I think the Small Claims court option would be the way to go. It would likely get attention higher up the pecking order. 
  • ThrugelmirThrugelmir Forumite
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    I borrowed £38,604.00 over 48 months, with monthly payments of £512.99. 


    £512.99 a month doesn't repay £38k over 4 years. 
    "Markets have been so good for so long. That many investors are trivialising the advantages of actively managing portfolio risk." - Gervais Williams
  • Edi81Edi81 Forumite
    780 posts
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    I borrowed £38,604.00 over 48 months, with monthly payments of £512.99. 


    £512.99 a month doesn't repay £38k over 4 years. 
    There must be a balloon at the end. 
    Please post everything that the agreement says in terms of financials. 
  • SeanG79SeanG79 Forumite
    886 posts
    Seventh Anniversary 500 Posts
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    As the agreement is unregulated, none of the consumer regulations apply. the early settlement calculations will also not be accurate as the bank/finance company can charge all the outstanding remaining payments. Any rebate offered is a gesture and not obligation. 
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