Miss sold car finance please help!!!

[loz420]

Hi,

I took out car finance in march last i had gap insurance and payment protection, was told i had to take payment protection out or they wouldn't go ahead with the agreement. Anyways the day i drove my car home someone crashed into the back of me leaving me unabe to work for a good few months, the car bumper was damaged and was fixed under the other persons insurance and was fine, anyway, so i called the finance company to activate my payment protection, they said because i had my accident within 30 days i could not claim, i did not know anything about this and was not told when i took it out. So i made the first 4 months worth of payments and my money ran out, i still couldn't work and so i contacted the finance company again stating the predicament i was in, they were not intrested untill i didn't pay as i couldn't for two or so months so i spoke to the account manager again and she said she would take the payment protection off as i couldn't claim on it anyway that way making the payments slightly cheaper, i made one payment after this and then i could not pay anymore, from not working due to being injured and as i have a lot of other debts aswell, i spoke to the company about lowering my payments untill i get back on my feet and spreding it over a longer period, they said they could not do this due to the loan already being reschedualed, i said i did not reschedual at all, they classed my account manager taking my payment protection off as reschedualing, i was gutted, it got to jan this year after getting lots of advice i decided to give the car back, i wrote to them and now the car has gone back but they have now sent me a bill for an outstanding amount, the car bought was 3995, and i paid 922, and because they have supposedly reschedualed they have added what i have paid back on and they sold the car for 1625, they say i owe 3218 still after everything, i have spoken to cab and debt line they have advised me i should only owe half now i have given the car back but the finance company have set out the outstanding amout like this:

Total amount payable under the agreement : £5,107.20

Plus credit protection premiums due prior to terminantion: £168.70

Less deposit: £800.00

Less instalments paid: £922.60

Less intrest rebate: £647.39

= £2,905.91

Plus expenses and charges payable under clause 11 under the agreement terms: £125.78

Plus vehicle recovery & transport/assessor's costs: £100.00

Less net sale price of the vehicle: £1625.00

Plus balance outstanding on connected booster loan: £790.17

Plus balance increase due to reschedual: £921.16

Liability amount: £3218.02

 

I don't know what half of these charges are and i am gutted as they say i nearly owe what my car cost. I really need some advice about what these charges are and if i can do anything do get these charges down, i did speak to the account manager again and he said he would quite happily lower the amount if i pay in full, but if i wasn't in such financial difficulty i would never given the car back there is no way i could ever pay the amount in full. I also need advice if there is anything i can do about being misslead about my payment insurance?

Its all a big mess and it states if they don't have a payment arangement in place in 5 days they will add 26.7% intrest untill i do.

Please can you advise me what to do.

Thanks

p.s sorry about the spelling!

[Alphageek]

Did they do a full needs analysis when they sold you the PPI?

 

Do you have all of the original paperwork?

 

If so, scan it, remove your personal info and upload it to photobucket or some such and post links to it in here for further advice.

[loz420]

What do you mean by a full analysis? I do have the paper work i wil dig it out and post it as soon as i can.

Thanks

[loz420]

Please click on thumbnail images to see full size document:

 

[loz420]

[loz420]

The last two letters are the two that i signed to take my payment protection off.

[loz420]

I have only recently received this paper work as i had to request it this was not sent to me straight away, when i took out the car finance i signed an A4 bit of paper which said what amount i was taking out and my details.

[42man]

Loz....I would write to them stating that you are making an official dispute, and the fact that you were told that the loan would onl ybe approved if you took out the PPI....

[Mercuryman]

With regards to your car agreement, I assume it is a HP contract.

 

If this is the case you have rights under the CCA on a HP agreement to hand back the vehicle provided you have paid half the Hire Purchase Price which is also called the total amount payable. In your case this is 1/2 of £6,107.20 or £3053.60.

 

As far as I can see you have only paid £1,722.60 (including deposit) and so if you do hand back the car you owe the difference, ie

 

£3,053.60- £1,722.60 = £1331.00

 

There are a couple of things to note. When you handed back the car it should only have suffered fair wear and tear and secondly, you would be liable for any arrears on the account at the time of handing back the car.

 

I note that they have charged for collection of the vehicle and as such I would ask, did you surrender the car or did they reposses. It makes a difference.

Edited April 21, 2009 by Mercuryman

[loz420]

I sent them a letter stating i was handing the vehicle back they did not reposess it.

[Mercuryman]

I sent them a letter stating i was handing the vehicle back they did not reposess it.

 

In which case my previous posts stands. It is your right under the CCA to pay up to the Half The Hire Purchase Price and hand the car back. In your example the Hire Purchase Price is £6.107.20 (as stated on your document).

 

Half of The Hire Purchase Price is £3,053.60 and so far you have paid £800 deposit and £922.60 in repayment totalling £1,722.60.

 

Had you been up to date with your payments then the amount you owe them is £1,331.00. However, dont forget that you will also owe them any arrears that were due at the time you handed back the vehicle.

 

This is your statutory right under the CCA and you should contact the lender and tell them that you handed back your car in line with the Halves and Thirds section of your agreement (they will know what you mean). It is the section on your agreement headed Termination - Your Rights.

 

Car finance companies hate this clause but the law is there to protect customers from paying over the odds for a vehicle and ensures that the finance provider takes an active interest in the goods being purchased.

 

The same rights apply to a Conditional Sale Agreement (which you have) as well as a Hire Purchase Agreeement.

 

You do also have a claim against the finance company for trying to insist that you took out payment protect otherwise they would not grant the loan. This is not allowed because if they did insist on you having the PPI it would be classed as an additonal charge for credit and the premium for the PPI would have to be treated as interest and reflected in the APR.

 

Your document shows an APR of 31.3% (I make it 31.09% so it is within tolerance). However, had you had the £24.10 cost of the PPI added to your cost of borrowing it would have given an APR of 47.9%. By insisting you took PPI this is the APR that should have been used.

 

Your argument with the finance company is to prove that they insisted you take the PPI. If you can do this you do have an unenforceable agreement.

 

In most cases of car finance it is the car saleman or the dealership business manager that sells the finance. However, if this is the case with your agreement, don't let the finance company try to imply that it is nothing to do with them what the salesman / woman said to you. If it was the car dealership that introduced you to the finance provider then the agreement is a Debtor - Creditor - Supplier agreement and under Section 75 of the CCA the finance company are equally liable for the merchandise and how it is sold. Any mis-selling done by the salesman gives equal liability to the finance provider.

 

The problem you have is, how do you prove that you were told that you must have the PPI or you wouldn't get the finance? It is difficult but you may have had someone with you that can verify this. Car dealerships will get approximately 25% of the PPI premium in commission and in your case the premium was £867.60. This gives approximately £216 commission to the car dealer. You can see why they want you to take it. However, the courts are littered with cases where it is claimed that the saleman insisted on the purchase of PPI so you would probably be believed.

 

As a footnote to all this the APR you paid at 31.3% is too high (sadly not high enough for you to claim an extrotionate credit deal). The APR is the single most valueable thing to gauge what you are paying for your credit. One reason your APR was so high are the two fees of £250 at the beginning of the agreement and £100 at the end. If you take these off your APR is 23.3%, still too high.

 

I know not everyone has access to bank loans but had this loan be advanced by a bank at 14.9% typical APR then your credit cost would have been £837 and not £1662. Indeed, if you add the cost of your worthless PPI you were paying charges of £2,529.60 as opposed to £837 for a high street lender. £1692 extra.

 

Always shop around and take note of the APR.

[loz420]

Thanks for the advice, my car didn't pass its motso i had to get a car within a few weeks, no one would lend to meas i had been in a new job only 2 weeks,so they said my partner has to act as a guarentor and take out ppi to aprove me, i was stuck between a rock and a hard place,we later found out they have put him down as a joint claimant in which we spoke to the car financecompany and was told they wouldn't do anything. The last two letters i posted stating they were taking the ppi off and my new amount does this cancel out the origional contract or does that still stand and can i still go back and write them a letter stating i should only owe half minus the amount paid, as also stated by the cab when i went to see them? What do you think i should do as my next step?

Thanks

[Mercuryman]

I'm not an expert in these matters I'm afraid. There are a couple of complications. Firstly, the PPI mis-selling and secondly the fact that the finance company terminated your contract for non-payment.

 

You have two choices, either claim an unenforceable agreement due to the mis-selling of PPI (I dont know how you would go about this and I'm not sure of what the result would be if you did. Afterall, they have removed the PPI from your original contact and that may have been your recompence if it was mis-sold).

 

Your second option is to accept that contract is binding. On that basis my advise would be to write a letter stating that you only owe the Half Hire Purchase amount less the amount paid to date plus arrears. I dont know what your arrears were but I worked out above the figures excluding the arrears.

 

Keep you letter simple and just point out that under the terms of your agreement you have the right to Terminate by handing back the vehicle and paying up to Half The Hire Purchase Price. As you have already paid £1,722.60 you have calculated that you owe £1,331.

 

Ask for confirmation that this is correct. You may want to mention that you have taken advise from the CAB who have told you to do this. I suspect they will either dispute this on the basis that they had already terminated the agreement before you terminated the agreement or more likely that your sums are correct but you also owe the arrears on the account at the date of termination.

 

Good luck.

[loz420]

I did wonder as they terminated the agreement and i handed the car back if the original contract still stood and of i have any obligation at all to them as the property has been handed back, i did't know if there was some type of clause in this?

Thanks