Car finance
Mar 31st 2007 | 12:30 am
#1
Thread Starter
BE Enthusiast
Joined: Jun 2005
Posts: 491
From: Morphett Vale...for now
Car finance
We have 12 mths left to finish the car payments, we were hoping for around 2-3 thou, hubby went yesterday for settlement figure and the dealer said we owed 5,300, I can't understand this as the payments every month for 12 mths only amounts to 2,500, so they are asking for double to finish the payments early....Is this the norm or should I query this.
Can anyone help
Lol xx
Can anyone help
Lol xx
Apr 1st 2007 | 3:35 am
#2
SharonC
Joined: Jan 2005
Posts: 142
From: Perth
Re: Car finance
The reason they are charging so much is probably because you have to pay the interest for the whole term even though you are paying the loan out early.
Read your contract before doinf anything else. I had a car loan in the UK once and had to cancel early as I could not afford to keep up the repayments. The value of the car was less than was outstanding so I was unsure what to do.
However
There was a clause in my contract that meant I could just give the car back if I had paid a certain amount and they could do nothing about it, sorry cant remember the details but take the time to sit and read through the finance contract on your car you may find a similar clause.
Read your contract before doinf anything else. I had a car loan in the UK once and had to cancel early as I could not afford to keep up the repayments. The value of the car was less than was outstanding so I was unsure what to do.
However
There was a clause in my contract that meant I could just give the car back if I had paid a certain amount and they could do nothing about it, sorry cant remember the details but take the time to sit and read through the finance contract on your car you may find a similar clause.
Apr 1st 2007 | 9:00 pm
#3
The Murphsters
Joined: Dec 2006
Posts: 161
From: Brisbane
Re: Car finance
Is it HP?
If you pay off the loan early you do not need to pay the full amount of interest , your settlement figure should not include the interest for the full term of the loan - just the period up to settling. I am not sure on the legalities of this but there must be something forcing finance companies to do this otherwise they would not. (if that makes sense?). You did not say how much the car was worth now, Are you going to make a considerable amount selling it, or is returning it for no financial return an option?
I am in the same boat as you, I wrote a letter referencing Section 99 of the Consumer Credit Act 1974 which gives me the option of handing the car back at any time during the agreement. They have to take the car back, but they are allowed to charge you for this service and it would mean i would have had to pay around £5000 to settle (i was only a year into a 5 year finance deal!!) So your figure may well be much less, in fact you may not even have to pay anything as they get to keep the car. I asked them for a settlement figure and it was roughly what the car was worth so i got permission to sell the car and pay off the finance that way, think that may be your best bet.
But the car is not selling for the price i want, and i really need to do something quick as i am in Aus now! So i will need to make a decision very soon, but there is always the option of calling them and telling them to take the car back. I do not plan to go back to the UK to live so do not care anymore ;-)
If you pay off the loan early you do not need to pay the full amount of interest , your settlement figure should not include the interest for the full term of the loan - just the period up to settling. I am not sure on the legalities of this but there must be something forcing finance companies to do this otherwise they would not. (if that makes sense?). You did not say how much the car was worth now, Are you going to make a considerable amount selling it, or is returning it for no financial return an option?
I am in the same boat as you, I wrote a letter referencing Section 99 of the Consumer Credit Act 1974 which gives me the option of handing the car back at any time during the agreement. They have to take the car back, but they are allowed to charge you for this service and it would mean i would have had to pay around £5000 to settle (i was only a year into a 5 year finance deal!!) So your figure may well be much less, in fact you may not even have to pay anything as they get to keep the car. I asked them for a settlement figure and it was roughly what the car was worth so i got permission to sell the car and pay off the finance that way, think that may be your best bet.
But the car is not selling for the price i want, and i really need to do something quick as i am in Aus now! So i will need to make a decision very soon, but there is always the option of calling them and telling them to take the car back. I do not plan to go back to the UK to live so do not care anymore ;-)
Last edited by The Murphsters; Apr 1st 2007 at 9:05 pm.
Apr 1st 2007 | 9:35 pm
#4
Thread Starter
BE Enthusiast
Joined: Jun 2005
Posts: 491
From: Morphett Vale...for now
Re: Car finance
Is it HP?
If you pay off the loan early you do not need to pay the full amount of interest , your settlement figure should not include the interest for the full term of the loan - just the period up to settling. I am not sure on the legalities of this but there must be something forcing finance companies to do this otherwise they would not. (if that makes sense?). You did not say how much the car was worth now, Are you going to make a considerable amount selling it, or is returning it for no financial return an option?
I am in the same boat as you, I wrote a letter referencing Section 99 of the Consumer Credit Act 1974 which gives me the option of handing the car back at any time during the agreement. They have to take the car back, but they are allowed to charge you for this service and it would mean i would have had to pay around £5000 to settle (i was only a year into a 5 year finance deal!!) So your figure may well be much less, in fact you may not even have to pay anything as they get to keep the car. I asked them for a settlement figure and it was roughly what the car was worth so i got permission to sell the car and pay off the finance that way, think that may be your best bet.
But the car is not selling for the price i want, and i really need to do something quick as i am in Aus now! So i will need to make a decision very soon, but there is always the option of calling them and telling them to take the car back. I do not plan to go back to the UK to live so do not care anymore ;-)
If you pay off the loan early you do not need to pay the full amount of interest , your settlement figure should not include the interest for the full term of the loan - just the period up to settling. I am not sure on the legalities of this but there must be something forcing finance companies to do this otherwise they would not. (if that makes sense?). You did not say how much the car was worth now, Are you going to make a considerable amount selling it, or is returning it for no financial return an option?
I am in the same boat as you, I wrote a letter referencing Section 99 of the Consumer Credit Act 1974 which gives me the option of handing the car back at any time during the agreement. They have to take the car back, but they are allowed to charge you for this service and it would mean i would have had to pay around £5000 to settle (i was only a year into a 5 year finance deal!!) So your figure may well be much less, in fact you may not even have to pay anything as they get to keep the car. I asked them for a settlement figure and it was roughly what the car was worth so i got permission to sell the car and pay off the finance that way, think that may be your best bet.
But the car is not selling for the price i want, and i really need to do something quick as i am in Aus now! So i will need to make a decision very soon, but there is always the option of calling them and telling them to take the car back. I do not plan to go back to the UK to live so do not care anymore ;-)
Thanx Lol x
