Car finance agreement gone wrong

[livingoffcaffineandcuddles]

Sorry this is a long one but I'm waiting to hear back from the finance company.

So I'll try to keep it as short as possible;

I've had cars on PCP finance for years I have them for 3 years or so then hand them back and pick up something new (I've no interest in owning a car outright) obviously with PCP there is the option to pay a balloon payment at the end of you wish to own the car.

So I took out a new car on pcp with ford in February all my documentation from ford clearly states it's a PCP agreement, this was signed in branch and I have all the signed copies of this.

However the paperwork I have received from the finance company states HP finance which I do not want I don't want to own the car at the end of the agreement

I've done some rough maths to work out if I have been put on the wrong finance type and I think I have.

The deposit I put down for the car plus the monthly payments over the agreed term add up to the total cost the car was advertised for 😖. And the paperwork from the finance company states no balloon payment option. I checked previous paperwork I've had with the same finance company and they all state the amount of the optional balloon payment at the end of the agreement

Now does anyone know where I stand ?

I asked on another group and all I got was people telling me about the difference types of finance which I'm more than aware of 🤦🏽‍♀️

(Also in between all this I've had a second baby almost had a relationship break down, my eldest child has adhd and has been struggling at school, also looking into a mortgage and my grandad is terminally ill, so before anyone asks why I have not gotten round to checking all this sooner these are the reasons)

The paperwork you've got from the branch that states PCP - does this show a balloon payment?

Does the paperwork from Ford and the paperwork from the finance company show the same monthly payment?

If the one from the branch is PCP I'd expect it to show a balloon payment, an xxx monthly payment amount, deposit amount, APR etc. If the one from the branch doesn't show a balloon payment I'd be thinking perhaps they've mislabelled the quote?

Does the paperwork from the finance company show a different monthly payment amount to the paperwork from the dealership? I'd think HP would be a much bigger monthly payment!

This sounds like a right mess tbh - hopefully they can sort it out asap!

@bibbityboppityboo so I've added a pic of what fords paperwork says regarding a balloon payment they don't say what the specific amount is they just basically state in bold there is one.

Yes the monthly payment on fords paperwork matches the same amount on the finance companies paperwork.

I was wondering the same, is someone has possibly pushed the wrong button somewhere

I've not gone through ford before I've always used another company and had no issues but tbh ford even pushed me to go for PCP

I'd be going back to the finance company with copies of your signed PCP agreement telling them they've made an error their end.

@Xiaoxiong

I've emailed the finance company all the documentation that I signed at the dealership that states PCP finance they said they will get someone senior to look over it and get back to me within 48h

If they still can't do anything then I guess I take my case to the financial ombudsman? Or maybe start with citizens advice

If what you've signed is a PCP agreement, I don't think they have a leg to stand on OP.

I might be misunderstanding your post - but if you were happy with the monthly payment and thought you had to hand the car back in 3 years but actually for that same monthly payment you will actually own the car outright aren’t you actually in a better position?

@Valour

I'm really hoping not, I've read over all the dealership paperwork over the last 24h over and over and on every page I've signed regarding finance it clearly states PCP

Fingers crossed it's not a battle to sort it

@livingoffcaffineandcuddles

That's totally clear it's a PCP - and if you've signed that in branch I'm not too sure they can come back and say you need to be on a HP!

When you say that your deposit + monthly payments = the value of the car, is that with any interest included? The interest could end up giving you an idea of the balloon payment that might be left over at the end.

The monthly payments for PCP and HP aren't the same in any case I've ever seen (I just got a new car at the weekend too!) HP was normally several hundred a month more to account for the fact you were paying off the balloon payment over the term too. I'd ask them to recalculate their figures too because - they can't be the same I don't think!

@bibbityboppityboo

So when I add up all the figures;

The total cost of the car is £19,999

I paid £9500 deposit

Monthly payments of £195.51

There's £11,641.50 left to pay after the deposit.

So if I add the £11,646.50 to the £9500 deposit it takes me to £21, 141.00 which I believe would be the cost of the car with the VAT inc ect

And 49 payments of £196.51 = £9628.99

My maths is absolutely terrible so I've attached a pic of the top section of the finance agreement

@Cleo29

Hey,
Firstly my mistake I wrote 3 years instead of 4.

Technically equity wise yes having HP is better and you do own the car at the end.

However I've had pcp for years and it works for me however if I've been put on the wrong agreement and my monthly payments should be significantly lower then I'm definitely going to fight it.

I've not got any interest in owning it outright at all and never have as I get bored of cars after a few years.

I mean I guess the main issue is I've signed pcp but it states hp so somewhere someone has made a mistake and I'd just like it rectified. Or at least given the option to hand the car back and receive my deposit back

I think they’ve actually made a mistake in your favour and charged pcp amounts but put it down as fully paid off. You may find that they try and chase you for the difference once it’s discovered though, which it will be at some point over 49 months so wise to get it sorted now

@HidingFromDD

Who knows. Someone has made a mistake somewhere along the lines. Like you said best to sort it asap

@livingoffcaffineandcuddles

None of those amounts make any sense to me - doesn't look like it's been done properly!!

Hopefully the manager will get back to you asap and sort it out for you 😊

Did you actually agree to pay £20k to rent a car for three years when you could pay £20k across 4 years and then own the same car?

Hope you get it all sorted but I am really surprised anyone goes with pcp at those rates!

What the APR of flat rate on your agreement? just put it into my finance calculator and your payments look too low for HP but a bit too high for PCP

@quicklybeendrivenmad

I'm actually not sure I can't find it on any of my paperwork. The numbers make no sense to me either. I'm not great at maths but something is not right.

Ah ok, so 4 years. But when you sign up for PCP they tell you the guaranteed final value /balloon payment. Did they tell you those originally?

i’ve only ever done pcp once and i bought the car but my final payment was 20k on a car that was 43k. No deposit. But your deposit is nearly 50% of the car value so your monthly payments should be tiny, if anything at all?

A high deposit makes pcp even less attractive.

I think you’ll find that you have a HP agreement because of the size of the deposit. You won’t get PCP on £20k car with a £9k deposit.

Sounds like you want to keep the bulk of the deposit and get PCP with a balloon payment instead.

This

It's rare you pay more than a 20-25 percent deposit on PCP.

With those figures you'd have been better off leasing.

Your contract is definitely HP.

Why on earth would you pay a 9k deposit on something you are going to hand back?

@Beneficialchampion2

I've since spoken to them. 100% HP

They made a typo on their paperwork to me which is being re sent

Possibly but again I'm not interested in owning it outright at the end. I'll pay it off early like is usually do

Reject the car if you don't want to continue.

Errors in paperwork will definitely fall under a breach of FCA regulations, but really you should have spotted before signing.

You're probably better off anyway as HP will have lower rates than PCP. Even if you don't want to own the car. After 3-4 years you should get your deposit back at least when you come to sell.