Early settlement on PCP. Do I need to pay 50% of Interest costs?

sheramber

You need to separate two entities.

one Is the LTD company

the second is you as a person and director of the company.

A car owned ( bought ) by the company is a company expense, as are the running costs.

these are not your personal costs.

axil23

The car is insured and paid for by the company. 
Not sure what this has to do with the question I am asking though?

I would really appreciate some advise on the topic at hand. I take it that there is nothing that can be done then? 
 

WellKnownSid

axil23 said:

The car is insured and paid for by the company. 
Not sure what this has to do with the question I am asking though?

I would really appreciate some advise on the topic at hand. I take it that there is nothing that can be done then? 
 

Surely the matter at hand is that your insurance costs are now too high, not that you want to cancel the finance?

You stated that you started off by buying a car personally which was rejected and then bought through your Ltd Co.  You mentioned insurance costs as your reason for selling the car.  You made it sound as though you had insured the car initially at least through a personal motor insurance policy (which had three months still to run).

The obvious thing would be to find a cheaper insurance company - rather than sticking with an 'existing relationship' - especially if it's six times the price.  Having leased and bought cars through Ltd Cos in the past, I know that you will have fewer options, but they do exist.

axil23

I have tried more than 10 insurance companies. All quotes seem to be around the same amount. So no option but to sell the car as the premium will be too much for the company. 

Would anyone be able to confirm if any miss-selling has happened by the broker not answering my email questions on the closure policy?  

WellKnownSid

As others have stated. Consumer protection won’t be a thing in a B2B contract.

What exactly does your paperwork say? I would be very surprised if the entire terms were not written down in whatever you signed, to avoid the possibility of someone claiming they’d agreed to something else in an email somewhere.

axil23

Nothing in the paperwork about early payment penalties. Just the usual 2 pages about care of the car and what happens if I fail to keep up with the payments. 

I just find it frustrating that he purposefully didn't tell me over email and knowingly miss-sold it to me. 

Oh well. Never mind. Thought to ask. Thanks for your assistance. 

Dave_5150

Surely it will be far more costly to dispose of the car than to change your insurer?

Grumpy_chap

axil23 said:

Grumpy_chap said:

In what way do you think you were mis-sold?

I apologise if I missed this, but what is the reason for wanting out of the car agreement after only 4 months?

When I got the contract I replied back to the broker asking him to confirm what the early termination policy was. 

To which he called up and told me that there were no early repayment fees and I would just pay as per the standard pcp which is a set amount on interest which I forget off hand but its around 58 days? 

I asked him to reply to my email with that in writing which he didn't. 

I sent him a chaser email stating "the paperwork is all done just waiting for your reply with the early termination policy" to which he didn't reply again but called me up to tell me the same as before and that he would reply to email as he was out of office. 

You would need to be very precise on exactly what was asked and what was said and when.

Reading the thread as a whole, it is my understanding that the question and statement about early termination was asked and answered when the intention was to take out a PCP in your personal name.

The situation then changed to taking out business finance.  You may have asked the question again about early termination but may not have received an answer but went ahead anyway with the finance.

Even if you had been given an answer in regards to early termination, the devil would be in the detail about whether the answer was incorrect.  If the business finance arrangement is to borrow £X and repay £Y over Z months, could it (technically) still be "no early repayment penalty" if the finance is cleared by repaying £Y in fewer than Z months?  There can be a difference between how terms are defined for legal purposes and how the lay-person might interpret the term.

The details about the business finance and whether it is front-loaded interest will all be in the full paperwork that you received and no-one can answer that specifically without sight of the full agreement.

axil23 said:

In regards to the sale of the car is due to the Insurance going up 6 fold. I had heard of insurance rates on this car being silly so before I bought it I asked my Insurance company who I had been with for years and have a excellent record with. Obviously they couldn't state what the insurance was for the next year but this year it was hardly any extra for the remaining 3 months. Then the renewal came through at 6 times what it was before. 

You have not said what the car is - if you share that, there may be people who know ways of obtaining good insurance rates if the car is something more exotic.  There may be an owner's club or similar.

Are you certain the insurance premiums now being quoted are linked to the car being owned by your Ltd Co. and not you individually?
If so, one option may be for you to now buy the car from the Ltd Co.  You will have to pay the Ltd Co for the car and the Ltd Co can redeem the loan in whatever basis the Ltd Co has agreed.  This would be managed through the Directors' Loan Account and you would need to take advice from your Accountant if planning to pay the Ltd Co. in instalments as there are rules about loans to Directors.
If the premium is linked to the type of car, then you will need to meet the insurance premium costs either way.

axil23

The loan agreement is literally 3 pages long. It definitely doesn’t say anything about front loading the interest. It’s more about looking after the car, miles, service etc. 

Maybe they used the consumer finance template? 

WellKnownSid

axil23 said:

The loan agreement is literally 3 pages long. It definitely doesn’t say anything about front loading the interest. It’s more about looking after the car, miles, service etc. 

Maybe they used the consumer finance template? 

So a little clearer. 

You signed a contract with no provision for early repayment. Regardless of how the interest is calculated, you’re supposed to just keep paying the monthly payments. This is how unregulated business finance usually works.

Forget the notion of “consumer” - this is B2B. No consumers were harmed in the making of this agreement.