PCP VW Financial Services - Early repayment - Have I been overcharged?

FunnyFakingSexDirt

I'll try and keep this short and snappy:

I bought a car in March and borrowed £21500 on PCP via VW Financial Services with the intention of paying it off (almost) straight away.
The contract started on March 17th 2020, was set to run for 49 months, had a Rate of interest of 4.84% and had monthly instalments of £298.70.
The first instalment was paid on 15/4/20, £216.68 went towards capital, and £82.02 interest.
I decided to pay the PCP off early and received a settlement figure on 11/5/20 which was paid in full on 08/06/20 (the final day the figure was valid until).
The settlement Figure was £21514.55.
I was debited one further instalment on the 15/5/20 which was then refunded later on.

I have tried to contact VWFS asking to explain why my settlement figure (£21514.55.) was more than the original amount of credit (£21,500) , despite having already paid an instalment of £298.70. They have been very hard to get hold of (partially due to Covid) and have not replied to my messages or returned my calls but have only managed to send out a statement, which does not explain why the total cost of the credit was £313.25.

Is anybody able to explain why the cost of my credit was £313.25 for under 3 months, when it seems as though interest per month was £82.02 for the first monthly instalment?
If there is a reason that I am missing, then that is absolutely fine, I would just like to know how that figure is calculated and to double check I haven't been overcharged.

HHarry

Is there an additional 2 months interest charged as a ‘penalty’ for paying off early?

[Deleted User]

As above - it's the two months early settlement, plus the interest for the three months you had the loan - so around 5 months decreasing interest.

Grumpy_chap

I assume the OP did this for a deposit contribution, so still 'up' even though paid the £300 interest

DrEskimo

I have never seen a PCP charge early settlement fees.

Check your contract OP. What are the exact details? Is the 4.84% the fixed rate? Is the APR around 10%?
What is the final payment?

FunnyFakingSexDirt

HHarry said:

Is there an additional 2 months interest charged as a ‘penalty’ for paying off early?

It seems that way, I do not have a paper contract, their website is usueless, and I am fining it hard to get in to contact with anyone (that actually knows). Is the 2 months interest a standard penalty for early repayment?

Deleted_User said:

As above - it's the two months early settlement, plus the interest for the three months you had the loan - so around 5 months decreasing interest.

Is this a standard penalty for Car finance? That doesn't add up though, as £80 (rounded) for the interest * 5 is over my £313.25 cost of credit.

Grumpy_chap said:

I assume the OP did this for a deposit contribution, so still 'up' even though paid the £300 interest

I did get a contribution, yes.

DrEskimo said:

I have never seen a PCP charge early settlement fees.

Check your contract OP. What are the exact details? Is the 4.84% the fixed rate? Is the APR around 10%?
What is the final payment?

If only getting hold of my contract was that easy. 4.84 was the fixed rate. Final payment was due to be £10,260.

HHarry

It’s not a standard penalty, but the Consumer Credit Act allows companies to charge up to 58 days interest when an account is closed early.  VWFS appear to be applying it.
 

 As for the amount, depending on the dates it may not be exactly 5 months; if you were half way through your 3rd  payment period it could be 4.5 months.  And the amount of interest you pay each month reduces as you’ve paid off some of the capital, so it would’t be £82.02 * 5.

Overall I think it’s right.

FunnyFakingSexDirt

OK, thanks Harry. Appreciate your input.