Thread: PPI as condition of car loan

could someone give me advise pls? l am buying a car and have just been told that a condition of the loan is that l have to take out PPI. can l take ppi out then cancel it once loan for the car has gone through? or should l tell them l will not take out ppi? any advise pls? l need to give an answer pretty quick.

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thanks for that so you're saying that l can refuse the PPI and that they should not withdraw the offer of the loan for the car?

thanks l'm looking forward to making the call tommorow l'll let you know what they say

by the way the loan company is GE money been reading some threads and they have been fined for mis selling PPI

thanks for your quick replies l will let you know what they say. l am dealing with the salesman who is then dealing with GE

When you say 'salesman' I assume you mean the car salesman? It may well be him that is saying that you've got to take the PPI and not GE themselves as he may after a commission from them.

Might be worth checking that the dealer is FSA authorised via their register as your complaint could well be against them rather than GE.

Just a thought.

well the guy at the car place begs to differ with us he says yes they can use it as a condition! it's not GE money it's a company l've never heard of when l get the name of it l'll post it up. the person he deals with is not in till later so he will ring me when he's spoken to them.

Originally Posted by elliesnan

well the guy at the car place begs to differ with us he says yes they can use it as a condition! it's not GE money it's a company l've never heard of when l get the name of it l'll post it up. the person he deals with is not in till later so he will ring me when he's spoken to them.

He is technically correct in that PPI can be made a condition of the loan, but only providing that it is included as part of the charges for credit and not the credit itself (and correctly reflected in the APR).

This is, however, extremely rare in practice and would therefore be very interested to know if the credit agreement reflects the above correct procedure or whether he is just talking cr*p.

PPI can not be made a condition of any car loan - gone of those days where dealership sales staff can mis sell insurance's - in the current market place the FSA are crawling all over this industry - i work in the business so take it as gospel. large fines and the possibility of imprisonment are extremely likely for any motor dealer group who flaunt the law!

Companies can no loner get away with it.

The whole PPI mis-sale issue is partly bourne out by lenders insisting on PPI when their contracts state that the policy is optional and the cost is therfore not reflected in the credit charges or APR.

I just wanted to make tha point that it is possible, however, for a lender to insist on PPI (or any other insurance policy) providing it is clearly made a term of the loan and correctly stated as a charge for credit. Even the FSA acknowledges that could be made a condition on their consumer advice website (please see here - the section on PPI).

I agree with you though - in reality the above never happens, because such contracts would be commercially unviable due to the resultant APR.

My ears pricked up when the OP said that the finance was not going to be through GE but a company he had never heard of - I just wondered if one of the above types of contract was going to make a rare appearance, because since the advent of FSA regulation I would be surprised if any lender would dare to have a go!!

"due to my concerns" any PPI has been dropped l'll post more info later as a bit short for time thanks everyone for your comments

l've signed agreement for the car and the 2 parts crossed out are
Payment Waiver Charge and TLS Waiver Charge so your comments please on this and if they were so sure they could add these on then surely they would have insisted on it!