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  • FIRST POST
    • messi2504
    • By messi2504 18th Aug 19, 11:58 PM
    • 72Posts
    • 14Thanks
    messi2504
    Advantage finance
    • #1
    • 18th Aug 19, 11:58 PM
    Advantage finance 18th Aug 19 at 11:58 PM
    I am after some advice please.

    I bought a car in 2016 for 18000, i paid an 8000 deposit and the rest was borrowed from Advantage finance, it was a Hire Purchase agreement over 5 years.

    Unfortunately i was in an accident and my car has now been declared a total loss by my insurer.

    I have been asked to get a settlement figure from Advantage finance and it is just over 6800. I have had my agreement with Advantage finance since August 2016 i have paid in excess of 11400 in payments.

    After just over 3 years of paying on my agreement i was in total disbelief that advantage finance would quote such a big figure for early settlement.

    I would have thought that after 3 years of paying on a 5 year deal the owed amount in a lump sum would be closer to or less than 50% of the original loan value.

    I would like some advice on this if i can complain to any relevant body or if i have no chance.
Page 1
    • boo_star
    • By boo_star 19th Aug 19, 3:50 AM
    • 2,813 Posts
    • 2,160 Thanks
    boo_star
    • #2
    • 19th Aug 19, 3:50 AM
    • #2
    • 19th Aug 19, 3:50 AM
    What's the APR?
    • BoGoF
    • By BoGoF 19th Aug 19, 6:13 AM
    • 5,443 Posts
    • 5,379 Thanks
    BoGoF
    • #3
    • 19th Aug 19, 6:13 AM
    • #3
    • 19th Aug 19, 6:13 AM
    According to their website the representative APR is 29.26%!......ouch. OP must have been desperate for a car.
    • DrEskimo
    • By DrEskimo 19th Aug 19, 9:14 AM
    • 753 Posts
    • 539 Thanks
    DrEskimo
    • #4
    • 19th Aug 19, 9:14 AM
    • #4
    • 19th Aug 19, 9:14 AM
    At that rate, and with 36 payments I estimate your settlement around the 6k mark.

    Are there also early settlement fees?

    Did you take out any GAP insurance?
    • ~Brock~
    • By ~Brock~ 19th Aug 19, 9:52 AM
    • 1,609 Posts
    • 1,530 Thanks
    ~Brock~
    • #5
    • 19th Aug 19, 9:52 AM
    • #5
    • 19th Aug 19, 9:52 AM
    More information needed before anyone can give accurate advice:

    Exactly how many payments have been made so far?
    Have there been any arrears?
    Are there any other fees on the agreement?
    How much exactly is the settlement figure and when is it valid until?

    Generally speaking settlement figures, calculated in accordance with the relevant legislation, can result in higher than expected amounts especially on longer term agreements.

    Any complaint should be directed firstly to the lender themselves so that their own response can be considered before taking it further.
    • iolanthe07
    • By iolanthe07 19th Aug 19, 10:50 AM
    • 5,248 Posts
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    iolanthe07
    • #6
    • 19th Aug 19, 10:50 AM
    • #6
    • 19th Aug 19, 10:50 AM
    The settlement figure sounds about right on such a high interest loan. In the early years of repayment you are paying mostly interest; it is only in the final year or two that substantial inroads are made into the principal. I hope the OP had GAP insurance.
    I used to think that good grammar is important, but now I know that good wine is importanter.
    • messi2504
    • By messi2504 19th Aug 19, 10:59 AM
    • 72 Posts
    • 14 Thanks
    messi2504
    • #7
    • 19th Aug 19, 10:59 AM
    • #7
    • 19th Aug 19, 10:59 AM
    More information needed before anyone can give accurate advice:

    Exactly how many payments have been made so far?
    Have there been any arrears?
    Are there any other fees on the agreement?
    How much exactly is the settlement figure and when is it valid until?

    Generally speaking settlement figures, calculated in accordance with the relevant legislation, can result in higher than expected amounts especially on longer term agreements.

    Any complaint should be directed firstly to the lender themselves so that their own response can be considered before taking it further.
    Originally posted by ~Brock~

    So far 35 payments have been made. No arrears i have never missed a payment. Settlement figure is 6820.11 this is valid until 5th of September.
    • DrEskimo
    • By DrEskimo 19th Aug 19, 11:07 AM
    • 753 Posts
    • 539 Thanks
    DrEskimo
    • #8
    • 19th Aug 19, 11:07 AM
    • #8
    • 19th Aug 19, 11:07 AM
    So far 35 payments have been made. No arrears i have never missed a payment. Settlement figure is 6820.11 this is valid until 5th of September.
    Originally posted by messi2504
    What's the APR and what's the monthly amount?
    • messi2504
    • By messi2504 19th Aug 19, 11:33 AM
    • 72 Posts
    • 14 Thanks
    messi2504
    • #9
    • 19th Aug 19, 11:33 AM
    • #9
    • 19th Aug 19, 11:33 AM
    What's the APR and what's the monthly amount?
    Originally posted by DrEskimo
    ASorry that is 321 and the APR is 29%
    • DrEskimo
    • By DrEskimo 19th Aug 19, 12:23 PM
    • 753 Posts
    • 539 Thanks
    DrEskimo
    ASorry that is 321 and the APR is 29%
    Originally posted by messi2504
    Do your finance documents mention any early repayment fees, or optional purchase fees?
    • messi2504
    • By messi2504 19th Aug 19, 12:25 PM
    • 72 Posts
    • 14 Thanks
    messi2504
    I got very little documentation from Advantage, it was all done via Zuto. Advatange didn't give me any details or breakdown on the loan until i had this accident it was the only time i got a breakdown on the figures.

    Just tracing old emails and my APR was actually 33.57%
    Last edited by messi2504; 19-08-2019 at 12:29 PM.
    • RelievedSheff
    • By RelievedSheff 19th Aug 19, 12:49 PM
    • 667 Posts
    • 664 Thanks
    RelievedSheff
    Wow. That is a huge interest rate on a car loan and over 5 years as well!
    • DrEskimo
    • By DrEskimo 19th Aug 19, 12:58 PM
    • 753 Posts
    • 539 Thanks
    DrEskimo
    I got very little documentation from Advantage, it was all done via Zuto. Advatange didn't give me any details or breakdown on the loan until i had this accident it was the only time i got a breakdown on the figures.

    Just tracing old emails and my APR was actually 33.57%
    Originally posted by messi2504
    Yea I did think 321 was high for a 29% APR.

    Your settlement after 35-months should be around the 6,200 mark, so it suggests there are also fees in the order of around 600, which is certainly on the high side, but not beyond the realms of possibility on a loan like this. You need to ask for the terms of the agreement. It should have been given to you at the point you agreed to the contract.

    As has been pointed out, a 5-year loan for a car at 33% APR is very very high. I suggest next time you either look at a getting a loan much cheaper from elsewhere, or settle for a cheaper car....

    How much are your insurance company paying out for the car?
    You may also want to consider GAP insurance. Using sites online (ALA, gapinsurance, TotalGapLoss, etc) you can get cover for a reasonable price. Typically around 50 per year.

    Good luck with getting it sorted.
    • messi2504
    • By messi2504 19th Aug 19, 1:35 PM
    • 72 Posts
    • 14 Thanks
    messi2504
    Thanks guys, i must say there was a lack of understanding on my part when i got this loan i just assumed that we would have some sort of fairer way the finance gets paid off but it seems they have insisted on just interest in the first few years of this agreement.

    Now i am screwed because of this accident whereas the loan will clear what i owe there is not much left to buy a car. I did ask if i can transfer the loan over to a new car that has been ruled out.
    • BoGoF
    • By BoGoF 19th Aug 19, 1:44 PM
    • 5,443 Posts
    • 5,379 Thanks
    BoGoF
    It's not a case of 'insisted', its just the way it works with high interest loans. If you take anything away from this is don't borrow money at double digit APR's. You could have had a perfectly decent car for the 8000 deposit you paid for the car.
    • RelievedSheff
    • By RelievedSheff 19th Aug 19, 1:47 PM
    • 667 Posts
    • 664 Thanks
    RelievedSheff
    And don't take loans over 5 years on vehicles. They depreciate faster then you are paying off the balance.

    3 years max on a car and at much lower rates than you took out last time as well!
    • DrEskimo
    • By DrEskimo 19th Aug 19, 2:09 PM
    • 753 Posts
    • 539 Thanks
    DrEskimo
    Thanks guys, i must say there was a lack of understanding on my part when i got this loan i just assumed that we would have some sort of fairer way the finance gets paid off but it seems they have insisted on just interest in the first few years of this agreement.

    Now i am screwed because of this accident whereas the loan will clear what i owe there is not much left to buy a car. I did ask if i can transfer the loan over to a new car that has been ruled out.
    Originally posted by messi2504
    It's a common misconception on this board, but I can assure you there was nothing unfair about how the finance was paid. It's exactly the same for every loan. The amount of interest you pay at the beginning is higher because the principle amount is highest. As you pay down the loan, the principle reduces, so the amount of interest reduces.

    It's just a mathematical fact....

    I think not being able to transfer the loan is very good news! Either look for a much cheaper rate loan, or look for a cheaper car.

    Did you agree with the insurance payout? Would you have been able to buy your car with the payout in the condition it was in right before the accident occurred? If not, it is also worth going back to the insurer with evidence of cars exactly like yours to prove that the pay-out is not suitable.
    • iolanthe07
    • By iolanthe07 19th Aug 19, 3:01 PM
    • 5,248 Posts
    • 4,926 Thanks
    iolanthe07
    It seems they have insisted on just interest in the first few years of this agreement.

    This is how all these loans work. Not much is paid off the principal in the early stages.
    I used to think that good grammar is important, but now I know that good wine is importanter.
    • messi2504
    • By messi2504 19th Aug 19, 5:03 PM
    • 72 Posts
    • 14 Thanks
    messi2504
    Did you agree with the insurance payout? Would you have been able to buy your car with the payout in the condition it was in right before the accident occurred? If not, it is also worth going back to the insurer with evidence of cars exactly like yours to prove that the pay-out is not suitable.
    Originally posted by DrEskimo
    I have disputed this with my insurer and after rejecting 2 offers we have come to an agreement on their 3rd offer.

    Seems like advantage have not done anything they should not have just me not being well educated on the matter.

    Thanks for your input chaps.
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