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Will_Hawkins

Interest overcharging on car finance

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I've recently decided to sell my car. I took out some finance by a company called Mallard based in the south of England. The cost of the car was £7,990. The total payments over 4 years comes to £13,074, or 61%. That equates to around 15.2% a year for 4 years. I have paid £7395 to date and have 21 months left to pay. I calculate that the settlement should be around the £3,200 mark as I shouldn't have to pay interest on money I've settled. That would make my finance costs over 27 months of £2,605, or around 32%. Again, around 15% per year roughly. They have quoted me a settlement of £4,916! That would mean interest of 54%, or roughly 26% a year??!! Is it legal for them to effectively increase the % of actual interest paid for early settlement? Does anyone know if I have some recourse on this?

 

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Sadly it is not as simple as you describe.

 

You pay off more in interest in the early years than you do in later years rather than paying interest in equal amounts over the period of the finance.

 

So for example, if a loan is exactly half way through its term and a settlement figure is requested, that figure will be more than half of the amount originally borrowed.

 

Run your finance details through this spreadsheet and you will see what I mean.

 

LoanAnalysis.xls


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If I have helped you please leave me a message by clicking my star

 

1. Single Premium PPI Q&A Read Here

2. Reclaim mis-sold PPI

Read Here

3. Reclaim Loan & Credit Card Charges Read Here

4. The CAG Interest Tutorial

Read Here

5. Feel Bullied by Creditors or Debt Collectors?

Read Here

6. Staying Calm About Debt

Read Here

7. Thinking of a Full & Final Settlement?

Read Here

 

How To Upload Documents To Cag

Instructions

 

I DON'T GIVE ADVICE BY PM BUT IF YOU SEND ME A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER HELP THERE

 

 

 

Private message facilities are offered for users to communicate issues that are perhaps inappropriate for posting on the main forum. Site rules explain this in more detail.

 

If you receive a private message which you consider abusive, derogatory or otherwise inappropriate, whether it be about yourself or other members, please report it using the "report" icon

 

If you are approached (or have been approached) by private message with an offer of help "Off Forum" or with a view to asking you to visit another website, please inform the site team via the report icon, especially if this results in a request for a fee. Remember, this is for your own protection

my views are my own and are given in good faith to try and help people. Please seek professional advice on your case if necessary

 

PLEASE HELP US TO KEEP THIS SITE RUNNING

EVERY POUND DONATED WILL HELP US TO KEEP HELPING OTHERS

 

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