Vauxhall Holiday Payment

[Deleted User]

So I just got a call from Vauxhall’s finance, they said it’s to do with the 2 month holiday payment we offered ( firstly I requested it) he proceeded to tell me that only the first month was interest free and second month will have interest of £53 added on the end. Is this even allowed when I was never made aware of this 2 months ago?.... even the confirmation letter I received only spoke about when the holiday period starts and when I next payment is due. 

Mercdriver

Interest is always in place when you have a payment holiday.  They were never going to be interest free.  

KimJongUn88

Don’t take the second month’s payment holiday then.

mattyprice4004

It'll be in the fine print. Payment holidays are rarely interest free. 

AdrianC

You're borrowing the same amount of money, but because you're not paying it back for a couple of months, there will be more interest, because you're borrowing it for longer.

Is this a surprise? Thank him kindly for the gift of one month's free interest.

[Deleted User]

I’ve done my homework, nothing in the paperwork I have states there will be interest on this, I cant cancel the second month as that has just passed. Thought this forum would be useful with some actual statutory facts ..... maybe not! 

KimJongUn88

The “statutory facts” are thy the lender is entitled to charge interest on outstanding amounts even moreso if those amounts remain outstanding for a longer period due to payment holidays.

Theres a difference between a payment holiday and an interest free payment holiday. 

AdrianC

You want actual statutory facts?

No, there is nothing that requires a payment holiday to be interest-free.

They are doing you a favour that they are not required to do, by making it partially interest-free.

Have a read of...
https://www.moneyadviceservice.org.uk/en/articles/coronavirus-covid-19-car-payment-holidays
"You’ll still be charged interest for the months you’re delaying your payments for, but won’t get charged extra fees or charges. The three months of the payment holiday during COVID-19 also won’t affect your credit rating – but missing payments after this time will."
https://www.moneysavingexpert.com/news/2020/04/payment-freezes-confirmed-for-car-finance-and-high-cost-credit-c/
"...though interest will continue to rack up during the payment freeze."
https://www.fca.org.uk/news/press-releases/fca-confirms-support-motor-finance-and-high-cost-credit-customers
https://www.fca.org.uk/publications/finalised-guidance/motor-finance-agreements-and-coronavirus-temporary-guidance-firms
"Firms are not prevented from continuing to charge interest under regulated credit agreements during a deferral period."

molerat

The earlier you inform us the easier it will be to support you through this difficult time. If you’ve been financially affected by the coronavirus outbreak, you may be eligible to defer your payments for 3 months. 

Subject to your payment deferral request being considered and accepted you won’t need to make your usual repayments during the deferral period, however interest may still be added to your loan in line with the terms of your agreement with us. Our agent will confirm how we are able to help you. 

We kindly request that you do not cancel your direct debit with us, as it will make it more difficult to re-instate it at a later point. Please speak to one of our agents beforehand.

https://www.vauxhallfinance.com/Pages/coronavirus-update.aspx

MinuteNoodles

Hollielouise said:

 Thought this forum would be useful with some actual statutory facts ..... maybe not! 

Statutory facts:
Lenders have to offer a payment holiday and they cannot make any charge or penalty charges for that however they can still apply interest. Therefore Vauxhall are not obliged to give you even one month interest free.

Mercdriver

In the OP's mind statutory facts = what she wants to hear?
OP, you took out a loan and there is a term for the loan.  If you have a payment holiday, it extends the term.  That's the reason for the APR being there.  You get charged a percentage of the amount borrowed over a certain period of time.  The longer you borrow for, the more interest you will pay, if the rate of interest is the same.  Not paying interest for a payment holiday would be an exception that would be in the Ts and Cs.