Hi all,
At the moment I'm the owner of two cars. A 2012 C Class Coupe which I have up for sale and estimate I will sell in the region of £8500-9500 for. I also recently at Christmas purchased/took out a deal on hire purchase for a 2018 CLA. My preference would have been to sell the 2012 car and put the money received for it as a deposit against the CLA therefore let's say just for simplicity purposes putting a £10,000 deposit down and financing the remaining £10,000 which again for simplicity (ball park figures) purposes paying £200 a month for 60 months. Due to being abroad and also still needing use of the 2012 car, I kept hold of it due to advice (documented on email) from the dealer, my own assumptions and a reconfirmation from a friend that this wall always the case - that I will be able to take out finance for the full amount of the car (less a small deposit) i.e £20,000, and therefore shooting the repayments up to £400 a month. I could then sell my 2012 (previous/now second car) and pay the finance company £10,000 as an early repayment. This will then take the money owed from £20,000 to £10,000 therefore having monthly lower payments of £200 a month and saving on interest in the long term. The interest would be recalculated to work off the new figure of £10,000 remaining.
I was just going over my agreement earlier because the time has come now where I intend to sell my 2012 car hopefully by the end of the summer. I saw a clause that concerned me a little and has confused me. It says that the partial repayment will come off the total amount payable which is this case £25,943. I was under the presumption that the partial repayment comes off of the total amount of credit remaining i.e £19,649 and the interest would be recalculated on £9649, so I would pay something back like 50% of the total amount of interest owed if I didn't make a partial settlement so around £12,000 in total. If that £10,000 partial repayment comes off of the total amount you will have to pay which is £25,943, that would mean I had to pay around £16,000 across the remaining months. This seems odd and could be me getting my wires crossed. If I pay the the settlement fee in total I would only pay the remaining credit which is £19,649 not the total amount you will have to pay. I guess my query is what is the "outstanding total amounts payable" as per the clause below. Is it the remaining credit/settlement amount or is it the "total amount you will have to pay"? figure. I've just seen the clause states "outstanding total amounts payable at the time of settlement". Can anyone clear this up for me? Thanks
Dealer:
"but the other option which could be easier is to just finance the full amount for the CLA and then once your car sells pay that amount off your finance which will give you a rebate in part of the interest and also re calculate your monthly instalments."
Early Repayment 11.1. If you effect a partial early repayment in accordance with the notice "Early Repayment" overleaf, we will: 11.1.1.firstly, apply the amount of the early repayment against any fees, charges and interest due to us at the time of settlement; and 11.1.2.secondly, apply the amount of the early repayment against the outstanding Total Amounts Payable under each of the (i) HP or the PCP (as the case may be); (ii) the RTI GAP Insurance Premium Personal Loan (iii) the Warranty Insurance Premium Personal Loan (iv) the Accessories Personal Loan; and (v) the Additional Personal Loan on a pro rata basis according to the outstanding Total Amounts Payable under each of the different credit elements of this Agreement at the time of settlement; 12. we will then reduce each remaining monthly payment so that you will repay the outstanding balance of the Total Amount Payable by the same number of monthly payments, each of a reduced amount. Where we have a right to compensation, we may add the amount of the compensation to the outstanding balance of the Total Amount Payable
These are the figures on the contract.
Total amount of credit: £19,649
Monthly repayments of £412.71
The total amount you will have to pay: £25,943
Interest: £5293
As of today:
Amount to pay off your Hire Purchase is: £19,665.32
Your total savings if you choose to settle your account now is:
£4,237.47
At the moment I'm the owner of two cars. A 2012 C Class Coupe which I have up for sale and estimate I will sell in the region of £8500-9500 for. I also recently at Christmas purchased/took out a deal on hire purchase for a 2018 CLA. My preference would have been to sell the 2012 car and put the money received for it as a deposit against the CLA therefore let's say just for simplicity purposes putting a £10,000 deposit down and financing the remaining £10,000 which again for simplicity (ball park figures) purposes paying £200 a month for 60 months. Due to being abroad and also still needing use of the 2012 car, I kept hold of it due to advice (documented on email) from the dealer, my own assumptions and a reconfirmation from a friend that this wall always the case - that I will be able to take out finance for the full amount of the car (less a small deposit) i.e £20,000, and therefore shooting the repayments up to £400 a month. I could then sell my 2012 (previous/now second car) and pay the finance company £10,000 as an early repayment. This will then take the money owed from £20,000 to £10,000 therefore having monthly lower payments of £200 a month and saving on interest in the long term. The interest would be recalculated to work off the new figure of £10,000 remaining.
I was just going over my agreement earlier because the time has come now where I intend to sell my 2012 car hopefully by the end of the summer. I saw a clause that concerned me a little and has confused me. It says that the partial repayment will come off the total amount payable which is this case £25,943. I was under the presumption that the partial repayment comes off of the total amount of credit remaining i.e £19,649 and the interest would be recalculated on £9649, so I would pay something back like 50% of the total amount of interest owed if I didn't make a partial settlement so around £12,000 in total. If that £10,000 partial repayment comes off of the total amount you will have to pay which is £25,943, that would mean I had to pay around £16,000 across the remaining months. This seems odd and could be me getting my wires crossed. If I pay the the settlement fee in total I would only pay the remaining credit which is £19,649 not the total amount you will have to pay. I guess my query is what is the "outstanding total amounts payable" as per the clause below. Is it the remaining credit/settlement amount or is it the "total amount you will have to pay"? figure. I've just seen the clause states "outstanding total amounts payable at the time of settlement". Can anyone clear this up for me? Thanks
Dealer:
"but the other option which could be easier is to just finance the full amount for the CLA and then once your car sells pay that amount off your finance which will give you a rebate in part of the interest and also re calculate your monthly instalments."
Early Repayment 11.1. If you effect a partial early repayment in accordance with the notice "Early Repayment" overleaf, we will: 11.1.1.firstly, apply the amount of the early repayment against any fees, charges and interest due to us at the time of settlement; and 11.1.2.secondly, apply the amount of the early repayment against the outstanding Total Amounts Payable under each of the (i) HP or the PCP (as the case may be); (ii) the RTI GAP Insurance Premium Personal Loan (iii) the Warranty Insurance Premium Personal Loan (iv) the Accessories Personal Loan; and (v) the Additional Personal Loan on a pro rata basis according to the outstanding Total Amounts Payable under each of the different credit elements of this Agreement at the time of settlement; 12. we will then reduce each remaining monthly payment so that you will repay the outstanding balance of the Total Amount Payable by the same number of monthly payments, each of a reduced amount. Where we have a right to compensation, we may add the amount of the compensation to the outstanding balance of the Total Amount Payable
These are the figures on the contract.
Total amount of credit: £19,649
Monthly repayments of £412.71
The total amount you will have to pay: £25,943
Interest: £5293
As of today:
Amount to pay off your Hire Purchase is: £19,665.32
Your total savings if you choose to settle your account now is:
£4,237.47
