Question on Hire Purchase Car Finance

[sali]

Hi there, just joined on here and looking to discuss my current predicament:

Basically, I bought an 'approved' used VW car over the weekend and signed my Hire Purchase agreement. Since signing off I realised the following:

The amount of credit on which my monthly payments are based on includes a £399 charge for GAP insurance which I was told is free. Upon querying this with the dealership today, I was told that it is 'free' however as they purchased it and have to show it on record, they have reduced the £399 from the value of my used car which I traded in. So surely this is not free as it affects my monthly outgoings.

So just to clarify:

Price of new car was £9450 and I accepted an offer for £1650 for my old car (to be used as my deposit). So the amount of credit should have been £7800. However the amount of credit shows a figure of £8199, i.e. My deposit amount has been reduced from £1650 to £1251.

I have told them that this is not acceptable as I was not willing to pay for GAP insurance (would rather shop around around as can get a better price) and only accepted it as it was offered for 'free'. I have been told that they will look into this further and get back to me.

My question is, that as I have already signed off the finance agreement, what are my rights? Can I still persist for this to be amended? If they refuse to do so (as it has been signed off) is there any action I can take? Surely there must be something I can do it seems to be misrepresentation on their part of offering something as a free add-on and then cheekily deducting the amount from my old car price traded in?

Be great to see what you guys think of this!

[Guest]

Re: Question on Hire Purchase Car Finance

The total credit on the agreement should be what you pay for the car, and any agreed other purchases, these should be itemized within the agreement contract.
This is a very old con, and I am surprised dealers are still doing it to be honest, they will bill the credit provider for the full amount and either pocket your money or use it to buy the GAP either way it is not legal.

Simply the total credit on the agreement has to be for what it says on the agreement, it is what is called a prescribed term, and can make the agreement unenforceable if incorrectly stated. I should call the CAB in the first instance and complain, after warning the dealer of course, the CAB re the front office for the FCA these days I believe.

[sali]

Re: Question on Hire Purchase Car Finance

The total credit on the agreement should be what you pay for the car, and any agreed other purchases, these should be itemized within the agreement contract.
This is a very old con, and I am surprised dealers are still doing it to be honest, they will bill the credit provider for the full amount and either pocket your money or use it to buy the GAP either way it is not legal.

Simply the total credit on the agreement has to be for what it says on the agreement, it is what is called a prescribed term, and can make the agreement unenforceable if incorrectly stated. I should call the CAB in the first instance and complain, after warning the dealer of course, the CAB re the front office for the FCA these days I believe.

Thanks Andy, that's very helpful.

Is it a legal (or any other) requirement to show all purchases itemized in the finance agreement?

I spoke to them today and the guy I'm speaking to insisted that the agreement is now signed and that I should have checked before signing. I made it clear to him that I was told that the GAP insurance was free and that I would not have gone ahead with it had I known that they will deduct its price from my deposit (Old car price). He says he will speak to his manager and come back to me so will check again tomorrow.

Also checked the FCA website, they suggest speaking to the seller in the first instance and if not sorted, make a formal complaint which they are bound to provide a response to within 8 weeks. Next step would be to complain with the Financial Ombudsman Service.

Just hoping they amend the agreement so it gets sorted sooner rather than later.

[Guest]

Re: Question on Hire Purchase Car Finance

The form and contact is prescribed int he consumer credit act this particular section is section 61(regulations 2004 1482 section 3)

http://www.legislation.gov.uk/uksi/2...0041482_en.pdf