Carcraft and PPI help please

shellster80 · 9 March 2012 at 10:20AM

Hi,

Bit of a long one so please bear with me.

In March 2005 I got a car on finance form Carcraft, Sheffield. I was phoned by the salesman the night before I went to pick up the car that because of the amount and my credit history, he had needed to get the finance from more than one company. I went in, signed the bits I was told to sign and off I went (with no car tax, I was told to drive to the nearest PO to buy it, but that's another thread!)

Anyhow, my monthly payments were £206.81 to Marsh Finance, £47.53 to Open + Direct and £5 to someone else. All seperate payments. Fast forward a year and I lost my job. I stopped the payments for a couple of months, got a new job and set them back up again, or so I thought. Everything goes along great, have a letter from Marsh saying all payments are finished in 2009.

Later that year I receive a letter from DLC, a collections company saying I owe £1500 to Creation Finance. Having never heard of them I queried it and they put a hold on the account and asked the company for more info. It took almost a year for this company to come back and say they used to be OPen + Direct and it was from the car payments, the £47.53. I had completely forgotten about it. So I set up a monthly payment, all was fine and it plodded laong until last month when they said I needed t up my paymnets.

The whole PPI thing got me thinking that I was sure that actually, when I'd looked at my paperwork, the O+D payment was for PPI. I found the paperwork out yesterday.

The O+D payment WAS for PPI, so surely am I correct in thinking I should not now be paying that? Surely once I defaulted the payments the policy was cancelled anyhow? The second thing is, whilst looking at the paperwork I read my finance agreement which has a list of all the items payable. The top item is the cost of the car, the second item is PPI at £900+. At the bottom of the list it say "payable in 48 monthly payments of £206.81. This says to me that the PPI payment was included in the £206.81, not extra?

This really got me thinking so I looked at the papers and saw that the back sheet of the finance agreement was to do with the PPI and says it is with Hitachi Capital. I have policy documents from Hitachi Capital for PPI and life and critical illness cover. I also have policy documents from O+D for the same thing with a payment schedule showing it will be £47.53 a month. The documents all have the same start date, 31/05/2005.

Am I correct in thinking that it looks very much like Carcraft have sold me 2 insurance policies for the same thing and that when he said he had to get the finance from more than 1 company, one of the payments was actually PPI?

I'm unsure where to go now. I'm thinking my first port of call is DLC to get the account put on hold then Carcraft to find out what the hell went on?

At the time of getting the car I just signed what I was told. i was a young female, purchasing her first car on finance and didn't really know what was what to be honest

Thanks if you got this far!!

magpiecottage · 9 March 2012 at 10:59AM

If Car Craft sold you a separate loan solely for the purpose of funding a single premium PPI then that is misselling.

The lender remains entitled to their money but CarCraft should sort it out.

shellster80 · 9 March 2012 at 11:09AM

So even though i defaulted on the payments so the policy would have been cancelled, the premiums still have to be paid, even if there's no claim? They aren't actually 'lending' anything if there is no claim paid out?

Excuse my ignorance, I've never had to have any dealings with PPI before, clearly as I didn't even know I apparently had 2 policies! Does it sound to you, from what I've said, that it is indeed the case I've got 2 policies for the same thing? What should I be looking for to know?

timmybear · 9 March 2012 at 11:29AM

Hi. Where did it say that your PPI would be cancelled if you defaulted?

Also, I cannot see how you can have one loan to finance a car and another loan to finance PPI to cover the other loan. That makes no sense. In general, If you had two loans then the cost of the car would have to be distributed across the two loans and PPI sold for each loan based on the value.

So, lets say for round figures you bought a car for £10,000. Of that, £7000 was on the first loan and £3000 on the second. Then PPI was sold on each loan, to cover the amount you were borrowing on the respective loan. That it is why you have two loans and two PPI insurances. If Carcraft sold you two loans and two PPI policies (which would be correct - why would you cover only one loan?) then you may have to make two claims, presumably to Carcraft, if you have reason to think it was miss sold.

shellster80 · 9 March 2012 at 12:03PM

I didn't say it said the policy would be cancelled if I defaulted, I just presumed this was the case. I know that with my car insurance, if I do not pay the premiums, then the policy is cancelled.

The thing is, I do not have any paperwork for the other part of the loan, if that is indeed the case. I have the finance agreement for the £206.81, which it says includes PPI with Hitachi. I then have the payment schedule for the O+D policy, which it says is for £47.53. The £47.53 came out monthly on it's own. If it was indeed PPI for the second part of the loan, would it not be included in that loan payment?

timmybear · 9 March 2012 at 12:34PM

Hi. Well this is the thing, it all depends on how it was worded.

The issue here and across the board is from the salespersons point of view, when selling something he or she tell you what it means to you, in pounds, shillings, and pence. In other words, the bottom line.

However, how this is 'expressed' in reality is very different. For instance, if you were to go and buy a washing machine today for £400 and the extended warranty was £150, the salesperson may say to you "take it and I'll do you the insurance for £125". And you accept the deal. What the salesperson can't do in this example is actually reduce the price of the insurance, so when you look at your receipt you see that they have still charged you £150 for the insurance, and charged you £375 for the washing machine. You as the customer still pay the same BUT the legalities and finer points of the transaction have differed in real terms.

I may be wrong, but I get the impression that the amount of your second loan was equal to / on a par with the total amount of PPI you have been charged across the two loans, which is why you think the second loan is only for PPI. This may have been how it was put to you or may be how you've interpreted it, but in reality I am sure it can't be the case.

So, let’s say your car was £7000 (and again it is random round figures). With PPI at £3000 that brings the balance to £10,000. You then have two loans for this; one at £7000 and one at £3000. Now, that looks simple, in your eyes one is for the car and one is for the PPI. But that can't work. You can't have PPI on one loan paid for on another loan. And that second loan will need protecting as well.

Therefore the loan for the car of £7000 will have been split across the two loans - let’s say £5000 on the first and £2000 on the second, and then the PPI costs added to each loan for the respective value, in this example £2000 on the first and £1000 on the second. In your head and in your wallet you still pay the same, but your circumstances are now that you want to try and make claims etc, therefore you have to try and find out who loaned you what and exactly what it was for.

It sounds like the 2nd loan (the one in default) was partly for a chunk of finance for the car, and the remainder being PPI for that loan. Hence why you have two PPI agreements.

Now, I could of course be completely wrong and am happy to be proven otherwise, but I base this on my own experience of administering and selling finance under similar circumstances.

shellster80 · 9 March 2012 at 12:54PM

But I don't have any finance agreement for a second loan? Only the finance agreement for the big payment, which has PPI included in it. All I've got for the second bit is the paperwork from O+D which specifically says it is Credit Protection Insurance, and the monthly benefit is £47.53. Which is what came out of the bank? I'm really confused

/

If I had a second loan, surely I would have paperwork for another company? I think I need to get in touch with DLC tio see what their paperwork says this debt is specifically for then contact O+D.

timmybear · 9 March 2012 at 1:04PM

Well if that is the case, it sounds like the second payment is for a specific stand-alone policy to cover the car loan but you said at the beginning that the salesman had told you that you needed to get finance from more than one company. And why you would have two policies then is a mystery. Have you gone back to Carcraft for an explanation?

timmybear · 9 March 2012 at 1:11PM

Hi again. I have just googled 'open and direct' with Carcraft and what it bought up were a lot of scenarios like yours, where loans were financed across two companies. And like i said before, it will all depend what it is on paper that each company loaned you, and what that money is / was for.

shellster80 · 9 March 2012 at 1:43PM

but you said at the beginning that the salesman had told you that you needed to get finance from more than one company. And why you would have two policies then is a mystery.

because I think he lied and claimed the commission, lol. I think he saw me coming! I have written to DLC to see what info they have. O+D and Carcrfat are my next point of call

HitachiCapital · 15 March 2012 at 1:02PM

Hi Shellster80,

Our PPI cover was sold through Marsh Finance, who provided finance products for Carcraft.

In review of your comments, to be able to investigate the PPI policy in full, please could you e-mail us with all the details and we will look into this for you. Please send the information to: marketing@hitachicapital.co.uk and we will get back to you as soon as we have reviewed the documents.

Many Thanks,
Hitachi Capital

Carcraft and PPI help please

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free