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

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124

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  • ontheroad1970
    ontheroad1970 Posts: 1,697 Forumite
    1,000 Posts Fourth Anniversary Name Dropper
    Even if you are charged the full interest for the contract period, you still aren't being charged a penalty if the agreement specifies the interest for the agreement.  A penalty would be an amount over and above the amount chargeable under the agreement.  It means that if there is nothing in the agreement for rebate of interest then you aren't entitled to any unless it is clearly stated.
  • axil23
    axil23 Posts: 40 Forumite
    Sixth Anniversary 10 Posts
    edited 14 August 2023 at 5:31PM
    Thought to have a chat with Financial Ombudsman Service for small businesses. They are saying that even though its a business contract the broker and bank are members of FCA and regulated by them. They suggest I need to complain and give them 8 weeks.  
  • Dave_5150
    Dave_5150 Posts: 276 Forumite
    Fourth Anniversary 100 Posts Photogenic
    edited 14 August 2023 at 6:25PM
    Did they advise as to what the basis of your complaint should be? Also what happens after eight weeks? 
  • axil23
    axil23 Posts: 40 Forumite
    Sixth Anniversary 10 Posts
    edited 14 August 2023 at 6:54PM
    That I could have been miss-sold. She said after 8 weeks I could set up a case with them and it would go to an independent adjudicator so I would need to prove to that person why I feel it was miss-sold to me.

     Its a bit of a long shot but I will give it a try. If anything it will stop this broker from using this tactic on others. 
  • Grumpy_chap
    Grumpy_chap Posts: 18,295 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Have you also explored options around the insurance for the car and seeking best quote?
    Are there any enthusiast clubs for the type of car?
    Have you verified that the insurance is high because of the car being company owned, or would the premium be high regardless?
    If the insurance is considerably cheaper as a personal rather than company car, have you considered buying the car from your Ltd Co.?
  • axil23
    axil23 Posts: 40 Forumite
    Sixth Anniversary 10 Posts
    Tried all options. Apparently its the car type rather then who owns it. 
  • Ayr_Rage
    Ayr_Rage Posts: 2,756 Forumite
    1,000 Posts Second Anniversary Photogenic Name Dropper
    Do tell us what has become six times more to insure than previously.
  • axil23
    axil23 Posts: 40 Forumite
    Sixth Anniversary 10 Posts
    Have a quick google of the following “Range Rover Insurance London” 

    You will see various quotes likes this -

    A spokesperson for one London-based broker mentioned an insurance quote of £38,000 for a Range Rover worth £50,000. 

    Last week Luker Rowe received an email from a major insurer to advise they will no longer insure any Land Rovers located in central London.
  • Herzlos
    Herzlos Posts: 15,896 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    You've mentioned settling it; are you still being charged for all of the interest if you're buying the car from them?

    Because there are basically 2 options: 
    1 is that you clear the finance and return the car, which sounds like your plan and that's attracting interest for the entire loan term.
    2 is that you pay the outstanding balance and keep the car (and then sell it). Are they telling you that the outstanding balance is just monthlies * remaining months and you're paying the full credit value anyway?

    Have you checked what the car is worth if you try and sell it? Because my assumption here is that you're trying to sell something like a Range Rover that you paid over £50k for after 4 months, which means you're going to be losing easily £10k in the sale alone.
  • axil23
    axil23 Posts: 40 Forumite
    Sixth Anniversary 10 Posts
    I am buying the car from them and then selling it on. So to do this they are asking for 50% of the Interest charges over the 4 years term. 

    I had a buyer who was quite keen and I was happy with the deal but he has now backed out due to the time this is taking. 
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