Just found out that HP credit is different to many personal bank loans (which I have always used in the past) especially when you come to settling the loan early, the difference being the interest of the loan is front loaded at the start of the loan. So my settlement figure includes most of the 5 year interest, in this case over 700 fcukin quid!!! Very upset as dealer knew at time my intention was the settle the 5 year deal after just 6 months, and when I asked about charges etc was told no you'll be fine etc all loans the same. After speaking the IM who credit was through, two people both said this type of finance would not have been right for me as my intention was to settle the 5 year deal after 6 months(knew I was coming into some money). Bit bloody late now . To make matters worse dealer left the dealership two weeks after selling me my car so they not in a position to help. IM cant help me, so it looks at the moment I am 700 pounds out of pocket, there goes the 18" wheels I was planning on buying. Bloody expensive lesson into different finance options. Grrrrr

 

If you've only bought the car recently, most HP agreements have a cooling off period, is yours different?

 

Did you read the contract before signing it, as I can't believe a salesman would mis sell something !!!!

 

I found out about that after my Scoob was nicked.

Nobody tell you about the front loaded intetrest at the time

 

No, bought it six months ago. Been lookin for a classic for a while before I found RB5. Bit out of price range but after a good test drive knew I had to have it. Had bank loan ready but would have had to drive from chadwell heath to chelmsford and back as needed to sign. Dealer matched interest rate for me on HP so after asking about charges of paying back early and told there would be none went with it. To make matters worse he assured me as part of the deal he would swop the cassette player with a cd player. What he didnt tell me was he was about to leave there, so as I didnt have this in writing they could not honour this. Did manage to track him down to new dealership, but have only had run around from him, got fed up and ended up buying one myself. Would def not buy another car from this guy, would not want anyone else to be in similar position to myself.

 

Surely if someone sells you something, you ask a question you expect an honest answer, isnt that part of there job?? Especially from a main subaru dealership, could understand if it was some shady back alley dodgy dealer. Looking back I'm sure he made on commision from setting this up and knowing he was leaving, knew he would not be in a position to deal with the complaint I now have with him.

 

Well if you are paying the interest anyway then there is very little point in settling it early..go spend the capital on hoe's n drugs.
C

 

Suppose that would be one way to make me feel a little better!!! LOL

 

Er....?

I guess you learn from experience, but never take financial advice from a used car salesman. Looking back, you probably realise this now.

 

I know exactly how you feel though, the day before I was signing a mortgage deal with L&G (via Birstow Eves estate agency) I read the small print and could not believe the "agency fee" that was a applicable for 25 years regardless of remortgages, early payments etc.

Have a look at the termination clauses and see if you can get them to work for you.

Good Luck

 

v.simular thing happended to me when i bought my saxo many moons ago, got stuck in the car being worth less than the settlement figure trap, after the salesman telling me there wouldnt be any such problems. was 18 at the time so quite gulable! also worked out the total amount payable on a £8000 loan to be £11000 + !!!!

 

If it's of interest to anyone Lotus used (2 years ago so may not still apply) to have a pretty fair finance package.

They actually loaded their interest daily like the banks so no negative equity trap. Shame I bought the SLK instead

 

This has always been the case I'm afraid. HP is the lowest form of finance. PCP's are equally bad in lots of cases if you want to settle early
Balanced payments, with interest calculated daily are the best IMHO

Jonathan

 

I had a similar episode with early repayment costs with my bank. To cut a very long story short, I went to the financial ombudsman as I had specifically asked about early repayment and was given a chart containing hundereds of figures and was supposed to understand them - it was not explained to me. Anyway - the ombudsman said no case to answer - tough.

When I wanted another loan more recently, I did a lot of checking on the 'No penalty/charges for early settlement' There are no extra charges - but the interest is still front loaded - rule of 78 I think it's called. Many people are caught out by this and there may be some changes in the future - but the banks and lending houses are not in favour of changing the system - wonder why ?

Scoobsti