Car Finance

Russ2608

My friend a 80 year old lady purchased a car using PSA Finance UK ltd in March 2018. At the start of the first lockdown, she lost her part-time job and could not afford her car payments.
Having heard about the payment holidays I suggested that she applied for just that to help her get back on her feet.
She was allowed to have the payment holiday and started to make the next payments when that finished.
She has had no success in finding new employment and is still in the same situation financially so after further discussions with her family had decided to give the car up. 
I had advised as she had paid half the payments she should be able to hand it back with not much fuss.
She has been told by PSA Finance that since she had a payment holiday the finance term had restarted and she would not be able to do that at all unless she paid back 50% of the new amount.
I am in a terrible situation as it was my advice that she asked for the payments to be suspended and now she is in a dreadful state and worried beyond belief.
I can not believe the government has allowed this to happen.
Does anyone have any advice? because I am very scared of what she may do.

Russell

Galloglass

See
https://www.fca.org.uk/publications/guidance-consultations/motor-finance-coronavirus

The issue will be whether the effect of the change was made clear to the borrower. But note that there should be no disadvantage to the borrower by using the deferment facility. You should check the paperwork and then check the FCA site as it will come down to how the contract was varied and what information was provided and whether than information was clear and unambiguous.

bradders1983

They gave an 80 year old woman car finance?

Wow.

ToxicWomble

bradders1983 said:

They gave an 80 year old woman car finance?

Wow.

My FIL is 85+ and I bet his annual earnings are double mine at least.
Age isn’t a factor - affordability is
Although it was “affordable” with the part-time job, it isn’t without.
Therefore - agreed she shouldn’t have had finance (but not due to her age)

molerat

What is the difference between half the old amount and half the new amount, can't be that much surely.

Grumpy_chap

molerat said:

What is the difference between half the old amount and half the new amount, can't be that much surely.

It will be a big difference.  Half the old amount already had 2 years of payment made.

WillCheshire20

If on 48 months and balloon at the end then at 25 months you could just hand it back on VT. However the new contract will essentially start the contract again with the remaining balance plus the balloon.

macman

Give us some actual figures. Is this  HP or a PCP? If the latter, how much is the balloon? How long is the term?

daveyjp

WillCheshire20 said:

If on 48 months and balloon at the end then at 25 months you could just hand it back on VT. However the new contract will essentially start the contract again with the remaining balance plus the balloon.

On a 48 month loan with say 10% deposit the VT point won't be until after about month 40, not 25. Over the term you pay interest on the whole amount, but only part of the capital, the rest of the capital due is the balloon.

VT is an option once 50% of the total loan (which includes interest on the balloon) has been repaid, not when you are half way through the original loan term.

WillCheshire20

Start date of agreement 22/03/2018
Opening balance -£17318.98
48 x £249.34

Caz3121

WillCheshire20 said:

Start date of agreement 22/03/2018
Opening balance -£17318.98
48 x £249.34

the monthly payments total under £12k...
how much was the car, how much deposit and how much balloon payment at the end