costing more to payoff finance than agreed.

[tangey]

Bought my car last year. Had no interest in taking out finance. Dealer persuaded me to take it out £10K, would throw in 3 years servicing and discounted Supaguard (or whatever it's called).

Long story short, the salesman told me that I would have a total outlay of £595 if I cancelled the loan after 1 year. I valued the 3 years servicing and reduced priced paint protection at more than this, so I agreed. I have an email stating this figure. On the day of collection I noted in the finance papers a £145 settlement figure. The salesman accepted he hadn't known about this and sent me an email that said they will pay this to me when I settled.

It's 1 year on, I've asked for a settlement figure from the finance company (not merc finance). The quoted settlement figure means in total I'll have paid them £10978. So the finance has cost £978.

I was told £595. the dealer has promised to give me £145, however that still leaves a shortfall of £238.

The finance company tells me that the interest repayments are front loaded. Therefore the merc salesman was incorrect when he simply took the overall interest payable for the 3 year term and divided it by 3, to work out how much I'd pay in year one.

So it's £238. As I said at the outset, I only took the finance because I was getting more value that the £595 I was paying. I would not have done the deal if the salesman had told me it would cost £833.

What's my chances of getting the dealer to cough up, given I have emails from the saleman giving me rogue figures. The salesman is no longer with the dealership.

 

[renault12ts]

You can but ask.

The finance company is correct.

 

[grober]

What did the finance agreements documents you signed say?

 

[st13phil]

With the email trail you have, I'd say pretty good. Keep reminding the dealer that the salesman gave you information - which you have in print - that induced you to make the purchase.

 

[tangey]

What did the finance agreements documents you signed say?

It states the overall interest, the first and last payments and interim payments. It states it can be paid off early. There is no indication of how the interim payments are calculated, nor is there an indication of how any early termination will be calculated.

The only info I have regarding how much I pay if I terminated early, is the email from the salesman. One assumes if he is not qualified to give such information, he should not be giving it out.

Isn't there legislation that only approved persons can give finance related information.

 

[tangey]

You can but ask.

The finance company is correct.

I don't doubt the finance company's figures. It's the ability for the salesman to give me incorrect figures via email, and whether it puts responsibility on the dealership to rectify the situation.

One could view that given incorrect early redemption figures is mis-selling.

 

[grober]

It states the overall interest, the first and last payments and interim payments. It states it can be paid off early. There is no indication of how the interim payments are calculated, nor is there an indication of how any early termination will be calculated.

The only info I have regarding how much I pay if I terminated early, is the email from the salesman. One assumes if he is not qualified to give such information, he should not be giving it out.

Isn't there legislation that only approved persons can give finance related information.

I assume that in the finance agreement somewhere will be a catchall phrase to the effect that early termination will entail a financial penalty and that you should contact them concerning same before terminating the agreement. That's their get out and maybe the garage's as well??
In terms of your dispute with the car dealer I assume they will be in receipt of a commission associated with the finance package sale [ hence perhaps the front loading] Their willingness to pay out may reflect the commission they were paid- they are already refunding £145. Not saying this is right or wrong just factors to take account of when deciding whether to pursue the dealer for further compensation.

 

[Deleted member 6183]

I'm not going to bleat on about how the car finance industry needs better regulation.

However, the salesman has potentially breached best practice (at best) by offering inducements the way that he did, I would expect that whoever provides FCA compliance support to the dealer would be interested to hear of their sales process.

 

[markjay]

Not specifically re finance advice, but the general rule is that a company is liable for what its representative says (not just employee), as long as the company is aware that the person is presenting himself/herself as a its representative.

The idea is that the consumer is not supposed to know who within the company is allowed to provide information or quote for prices and who is not. This is an internal matter for the company to sort out.

The consumer is also not supposed to know if they are talking to a PAYE employee, freelance, or subcontractor.

The only case where this does not apply is when a company is unaware that a certain individual is presenting himself/herself as their representative - this obviously protects the company for being liable for fraud committed by others.

So in this case there can be no question that the dealer knew that the salesperson is presenting himself as acting on their behalf - and therefore as consumer you have the right to demand that they abide by any promises he made.

They might say that the deal that you signed was a later offer and different to what the salesman originally offered you etc - I do not know - but the point is that I don't think they can hide behind this particular argument i.e. that the salesperson was not authorised to provide financial data.

 

[219]

I'm not going to bleat on about how the car finance industry needs better regulation.

However, the salesman has potentially breached best practice (at best) by offering inducements the way that he did, I would expect that whoever provides FCA compliance support to the dealer would be interested to hear of their sales process.

Perhaps it is no coincidence he no longer works there ?

 

[Deleted member 6183]

Perhaps it is no coincidence he no longer works there ?

Possibly.

However, the dealer are still on the hook as far as implementation of the FCA regulation goes.

 

[219]

Agreed - if the figures are on company letterheaded paper , or from a company email address , I would think that was pretty watertight .

 

[tangey]

I assume that in the finance agreement somewhere will be a catchall phrase to the effect that early termination will entail a financial penalty and that you should contact them concerning same before terminating the agreement. That's their get out and maybe the garage's as well??

I'm just got the first few pages to hand. I did read the whole document last night. I'll take another look this evening. There is a section that relates to paying off earlier, but nothing in relation to penalties or whatever for doing so. However it appears the finance company isn't applying a penalty, just that the payments are formulated such that although they are equal payments throughout the term, they consist more of interest at the start, and less of capital.

In terms of your dispute with the car dealer I assume they will be in receipt of a commission associated with the finance package sale [ hence perhaps the front loading] Their willingness to pay out may reflect the commission they were paid- they are already refunding £145. Not saying this is right or wrong just factors to take account of when deciding whether to pursue the dealer for further compensation.

The £145 isn't compensation. When I read the doc BEFORE signing, I saw the £145 "option to purchase" fee. The salesman had not took that into account in his £595 cost of taking out the finance. So I refused to sign. The finance woman was a bit agitated but left me. salesman came back, hustled about for a bit, and then confirmed he would pay it, and I have an email about that as well.

Given that I don't pay it until the end of the agreement, I felt it was ok that they don't pay me until that time.

Also I fully honoured my side of the agreement. He asked me NOT to cancel until at least 12 months, I imagine there is a big claw back if deals get cancelled too early. So if I waited 9 months more than I woulda otherwise had waited, I'm a bit pee-ed off that the figures he gave me were pretty much made up and not based on fact, but on supposition.

 

[poormansporsche]

Its only a couple of hundred quid, pay it, keep your paperwork and then 3 years down the line use a no win no fee "Expert" to claim your money back plus loads of extra interest and some compo

 

[Rory]

To be honest, I never trust anything a dealer salesman tells me. For example, on the VW my wife recently bought, we took the PCP as there was a hefty deposit contribution. The salesman (who had previous done serveral years at two MB dealerships) insisted we would own the car immediately. This is wrong, and I pointed out to him the bit in docs that says this.

In your case, if you want to settle the finance then do that and ask the dealer to pay the difference. If no result then make a formal complaint to the dealership. If that doesn't produce the desired result then complain to the FOS.

 

[Deleted member 6183]

To be honest, I never trust anything a dealer salesman tells me. For example, on the VW my wife recently bought, we took the PCP as there was a hefty deposit contribution. The salesman (who had previous done serveral years at two MB dealerships) insisted we would own the car immediately. This is wrong, and I pointed out to him the bit in docs that says this.

In your case, if you want to settle the finance then do that and ask the dealer to pay the difference. If no result then make a formal complaint to the dealership. If that doesn't produce the desired result then complain to the FOS.

Which will, most likely, cost the finance company £550 in the form of a fee payable to the FOS.

 

[tangey]

Thanks all.

Last night I composed a letter to the dealership requesting they pay the difference, i.e. honour the committments they made via email. I'm just waiting for the detailed breakdown from the finance company, which will prove to the dealer my total outlay for holding the finance for 1 year.

One of the emails that the salesman sent me said "Interest is £450 per year". Although it might be technically correct, on a 3 year deal there is no method that allows you to cancel after one year and pay £450 of interest, as the interest is re-paid upfront.

I'll report back once I get a response to the letter I send.

 

[Deleted member 6183]

Too soon for a response?

 

[neilrr]

No such thing as a free lunch springs to mind.

 

[tangey]

Too soon for a response?

On friday the 25th, I send the finance company the settlement amount they requested, and advised them in very broad concerns that I felt I ws mis-sold the finance by the dealer, and I was reserving rights to claim against them, but I wanted to give the dealer the opportunity to put things right.

Same day, I sent the sales manager (my salesman isn't there anymore) a detailed letter, explaining the timeline of events, and a complete email bundle showing the email discussion between myself and the salesman. Also sent confirmation from the finance company of my payments to date and my payment to settle, and a copy of the settlement cheque I sent.

On Tuesday, I received a letter from the finance company acknowleding my letter and being somewhat concerned that the dealer gave a projected settlement figure, as this is something that is not possible to do. (clearly that's not the case...but I digress).

I phone the guy on the letter, a nice chap, and I roughly went over the issue. He said he'd already contacted the area manager and was waiting for a report. Without committing, he did indicate that if I had email committments, things should go in my favour and that should the dealer fail to be co-operative they'd use their influence.

Last Friday I received a call from the sales manager. His approach was that the salesman had poorly communicated how the finance worked. He had of course done no such thing, he'd told me in writting a future settlement figure, which was the incorrect figure. Anyhow I could gauge how the conversation was going and realised the dealership needed to save face, and I was fine with that. Sales manager said cheque was in the post.

I receive a cheque for the full difference this morning.

So all sorted, and to be fair, a really quick response from both the dealer and the finance company.

No such thing as a free lunch springs to mind.

I guessing you either didn't read my original post, or are just trying to be 'smart". I was clearly advised a total outlay figure in writting, which turned out to be much less than what my total outlay was.

There was no free lunch. I've paid in full the amount the dealer told me I would need to pay. It's like someone selling you something now, for an agreed payment of £595 in a year's time, and then after the year is up, demanding £978.

The dealer had possibly tried to get a free lunch from me, by giving me an incorrect low future settlement figure in order to get me to take the finance. Or maybe the salseman was just bad at his job, didn't know what he was doing and was winging it. Which frankly is what I think happened.

Anyhow, I'm not prepared to get screwed over like that because someone sold me something based on incorrect information.