I bought my car on finance 2 years ago, and have currently paid exactly half the 4 year term. The amount borrowed was £4600, which should mean i owe £2300 plus whatever early payment penalties i am charged. (shouldn't it?)

I asked for a settlement figure today, and nearly fell through the floor when i was told the figure to pay it off 2 years early was...£3600! They said all they would take off for early payment was £400. I've got some money coming shortly but Now there's no way i'm paying up 2 years early just to save next to nothing.

I have already paid £4000, so that makes a total of £7600, £3000 in interest in 2 years!

I asked for a settlement figure a year ago and was told £4500, which would have made the total paid around £6500 - over £1000 less than the amount they want now.

I can't find the original agreement, obviously i was aware that I was paying a lot more interest than normal as I have a ccj from around 4 years ago

So my question is, can they charge what they like for early settlement, or do I start arguing with them?

Thanks for any help.

What does it say in your contract with them?

I can't find the original agreement, obviously i was aware that I was paying a lot more interest than normal as I have a ccj from around 4 years ago

I would suggest that you give them another call and ask them to send you a copy of your contract with your signature on it and the T&C's

I've found the original agreement, all it says about early payment is to contact them for a settlement figure. I've actually recieved the letter today confirming the amount - £3,996 left to pay over 24 months, settlement figure now of £3,545, saving me a massive ( i dont think) £451 for paying 2 years early!

This is what it says on the letter, apart from the figures: "The amount of rebate has been calculated having regard to the consumer credit (rebate on early settlement) regulations 1983."

As I originally borrowed £4600 and have paid half, that means they are charging me £1,245 for settling early - total figure paid would be £7541, nearly £3000 interest on a £4600 loan over 2 years! I have settled a loan and a HP agreement early before, and expected a figure of around £2500.

I had another thought today - am I right in thinking that I can return the car with no further obligation now I have paid half? As I can get the same car but the V6 model for around £3000, saving me over £500 and getting me a better car into the bargain!

I've found the original agreement, all it says about early payment is to contact them for a settlement figure. I've actually recieved the letter today confirming the amount - £3,996 left to pay over 24 months, settlement figure now of £3,545, saving me a massive ( i dont think) £451 for paying 2 years early!

 

This is what it says on the letter, apart from the figures: "The amount of rebate has been calculated having regard to the consumer credit (rebate on early settlement) regulations 1983."

 

As I originally borrowed £4600 and have paid half, that means they are charging me £1,245 for settling early - total figure paid would be £7541, nearly £3000 interest on a £4600 loan over 2 years! I have settled a loan and a HP agreement early before, and expected a figure of around £2500.

 

I had another thought today - am I right in thinking that I can return the car with no further obligation now I have paid half? As I can get the same car but the V6 model for around £3000, saving me over £500 and getting me a better car into the bargain!

Is this a hire purchse agreement? If so you should be able to return the car once:-

All the relevent figures should be on the agreement.

Yes it is a HP agreement. Half has been paid, no arrears, but i did take out gap insurance which was £600. Are they going to tell me i haven't actually paid anything off that yet and ask for £600 and the car?

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