Paying off HP early and section 75 protection

lokowy

Hi

I've bought a car 12 days ago using Santander's HP as the dealer wouldn't accept credit cards (over 500£). I'm picking up the car tomorrow. HP finance agreement is running from the 13th and the interest rate is lower for the first 2 weeks during "cooling off" period. Once I've picked the car up I'm planning to fully pay the HP. Once I've done this would I lose section 75 protection? I've made a mistake of not using my credit card for that 500£ limit the dealer accepts.

DrEskimo

Can you ask to pay a small amount using a credit card? Typically I use a CC to pay the holding deposit (~£500), then use the finance to get any additional incentives, and then pay the whole lot off.

I'm not sure about S75 on the loan once it's settled/cancelled.

Jenni_D

To my knowledge, whether the finance is paid off or not the finance company retains S75 liability for the duration that a consumer has consumer rights over the goods purchased. (i.e. if you paid £500 on a credit card, would you expect to lose S75 rights once you'd paid back that balance? No, you wouldn't. HP finance is no different).

lokowy

DrEskimo said:

Can you ask to pay a small amount using a credit card? Typically I use a CC to pay the holding deposit (~£500), then use the finance to get any additional incentives, and then pay the whole lot off.

I'm not sure about S75 on the loan once it's settled/cancelled.

That's what I should've done but somehow I overlooked it and ended up with Santander providing finance for the whole amount. 

lokowy

Jenni_D said:

To my knowledge, whether the finance is paid off or not the finance company retains S75 liability for the duration that a consumer has consumer rights over the goods purchased. (i.e. if you paid £500 on a credit card, would you expect to lose S75 rights once you'd paid back that balance? No, you wouldn't. HP finance is no different).

That's how I understand things do work with the credit card. However when we phoned Santander 2 days ago they said that if I pay off the finance within 14 days I technically terminating the loan and therefore lose section 75 rights.

Jenni_D

lokowy said:

Jenni_D said:

To my knowledge, whether the finance is paid off or not the finance company retains S75 liability for the duration that a consumer has consumer rights over the goods purchased. (i.e. if you paid £500 on a credit card, would you expect to lose S75 rights once you'd paid back that balance? No, you wouldn't. HP finance is no different).

That's how I understand things do work with the credit card. However when we phoned Santander 2 days ago they said that if I pay off the finance within 14 days I technically terminating the loan and therefore lose section 75 rights.

In that situation, yes - you'd be cancelling the loan under the cancellation terms ... no loan = no S75 rights. However if any interest is accrued during the cancellation period I don't know if that changes anything.

Alternatively, what are the T&Cs regarding early redemption of the loan?

Sandtree

lokowy said:

I've bought a car 12 days ago using Santander's HP as the dealer wouldn't accept credit cards (over 500£). 

How much is the car?

Assuming its S75 rather than S75a then you could have paid £500 or less by credit card and the rest by another means and get full protection avoiding needing to deal with HP if your only reason for finance was S75. Too late for this case but you need to ensure you are paying off the finance early rather than terminating the finance from inception and thus it never existed.

lokowy

Sandtree said:

lokowy said:

I've bought a car 12 days ago using Santander's HP as the dealer wouldn't accept credit cards (over 500£). 

How much is the car?

Assuming its S75 rather than S75a then you could have paid £500 or less by credit card and the rest by another means and get full protection avoiding needing to deal with HP if your only reason for finance was S75. Too late for this case but you need to ensure you are paying off the finance early rather than terminating the finance from inception and thus it never existed.

The only reason for finance was that the dealer wouldn't have accepted credit card payment over 500£. Car was 9000£. I stupidly accepted that the whole amount will be covered by the HP instead of using my credit card for an initial 500£. I assumed that I'd just pay off the HP deal right after getting the car but since it was bought with a credit I'd be protected by section 75.

lokowy

Ok, I think I may have mislead you here. I saw HP words on dealers computer screen and assumed it's an HP. I'm looking at the Santander docs now and it says it's a Fixed Sum Loan Agreement. 

Jenni_D

Makes no difference ... it's still finance directly attributable to the purchase.  

born_again

Jenni_D said:

Makes no difference ... it's still finance directly attributable to the purchase.  

Unless it is paid off in the 14 day cooling off period. Then the agreement is cancelled.