Hi, recently bought my third Karoq, I keep changing car and then coning back to the Karoq, the grass isn't greener! 

Anyway on each occasion I've bought from Skoda dealer and part ex my current car, which leaves a balance to be paid. I've always taken the finance option as doing so I get 2 years warranty, 2 years breakdown and the next 2 services all for free. After a few months payments I always call Skoda Finance and pay off the payment. The amount payable has always been however many months are outstanding, no problem. This time however Skoda are quoting a figure £4000 over the outstanding amount saying its the interest. When I queried this they say contact the dealer. Before I call the dealer is this something new Skoda are doing, charging interest for the advance payments even though you're paying off early?

Apologies for long post and thanks in advance for any replies.

I'm familiar with purchasing cars using PCP and settling early but that's with new cars rather than used. The offer may be different but the principal should be exaclty the same.

 

Are you're saying the finance company are charging you interest for the full term of the loan? It's when you mention that the finance company have suggested you speak to your dealer that set's the alarm bells off in my head because your dealer has absolutely nothing to do with the agreement between you and the finance company so why are they suggesting that?

 

If I were a gambling man, I'd say you've bought the car using HP rather than PCP.    ( Of course it may be the finance company who've got their knickers in a twist )

 

With VWFS you don't actually need to call them for a settlement anymore, you can log in to the system and request it yourself.  If I were you I'd log in to their system and find out exactly what you've purchased.

 

https://customer.vwfs.co.uk/existing-customers.html

 

Contacting your dealer sounds a very good idea ! 

 

Edited 17 July, 20232 yr by kodiaqsportline

1 hour ago, kodiaqsportline said:

I'm familiar with purchasing cars using PCP and settling early but that's with new cars rather than used. The offer may be different but the principal should be exaclty the same.

 

Are you're saying the finance company are charging you interest for the full term of the loan? It's when you mention that the finance company have suggested you speak to your dealer that set's the alarm bells off in my head because your dealer has absolutely nothing to do with the agreement between you and the finance company so why are they suggesting that?

 

If I were a gambling man, I'd say you've bought the car using HP rather than PCP.    ( Of course it may be the finance company who've got their knickers in a twist )

 

With VWFS you don't actually need to call them for a settlement anymore, you can log in to the system and request it yourself.  If I were you I'd log in to their system and find out exactly what you've purchased.

 

https://customer.vwfs.co.uk/existing-customers.html

 

Contacting your dealer sounds a very good idea ! 

 

Thanks for thebreply, and for attaching the link, I'll do that tomorrow and see if it clarifies things.

Quote

This time however Skoda are quoting a figure £4000 over the outstanding amount saying its the interest.

I thought that , under the CCA, a maximum of 58 days interest could be charged!

The formula is here https://www.legislation.gov.uk/uksi/2004/1483

I am wondering if you have done a deferred deposit loan, basically your part exchange didn't provide enough free cash after clearing any outstanding finance on that to cover the deposit.  So they have added the missing deposit to tail end of the loan.

 

You need to look at the copy of the loan agreement page you signed, I suspect you are not being charged £4k 'interest', but lot of it is something else which hasn't yet been paid.

 

My hunch is you don't have a PCP, but they have done you a special HP type loan, with a negative deposit added to loaned amount, thus increasing the outstanding.

 

Edited 18 July, 20232 yr by SurreyJohn

1 hour ago, NottsIan said:

I thought that , under the CCA, a maximum of 58 days interest could be charged!

The formula is here https://www.legislation.gov.uk/uksi/2004/1483

 

My only experience of HP was 30 years ago which put me off for life. I know the rules have since changed  but nver taken much of an interest in the subject. It was my understanding that you could only settle an HP early once 50% of the loan was paid off ( I could be wrong tho ) so assuming the OP wishes to settle after only a few months, then the full amount ( or near full amount like they wanted to charge me 30 years ago ) would account for his £4000 interest.

 

PCP is a different kettle of fish - I'm assuming VWFS haven't made that mistake.

 

I'm going thru the early settlement process right now albeit not with VWFS. As per usual lots of folk talking about you can no longer settle early and new rules being introduced to stop people paying off their PCP, blah blah blah. The usual armchair experts - just rumours and assumptions started by people who've never tried to settle a PCP early themselves.   My settlement went thru after just 2weeks with no issue whatsoever, The transaction went thru exactly as the OP would have expected his to go thru.

Edited 18 July, 20232 yr by kodiaqsportline

Quote

It was my understanding that you could only settle an HP early once 50% of the loan was paid off

 

I believe the 50% is only if you wish to end the agreement and hand the car back. I've had HP agreements in the past, where advantageous due to deposit contributions etc, and paid them off within a month.

Bianconero - just thought of something. How did you accept the car / finance package?

 

Buying seems to have changed since Covid, my last two purchases I haven't physically signed anything as it's all done thru electronics i.e. all we're doing is electronically signing a box on the salespersons desk or replying to an email.

 

When ordering this car, the salesman showed me the order on is 24"  desktop screen ( I'm at the other side of the desk ), and we went thru a series of me replying to emails which accepted the order. It was only that night when the confirmation came thru I found I'd additionally ordered alloy wheel protection + paint protection, none of which he'd mentioned at the time.

 

I cancelled both next day but it just goes to show that you no longer have the time to look thru an a4 piece of paper in front of you which you then add your paw-print to with a biro.  Technology eh?

 

3 minutes ago, NottsIan said:

 

I believe the 50% is only if you wish to end the agreement and hand the car back. I've had HP agreements in the past, where advantageous due to deposit contributions etc, and paid them off within a month.

 

I'm glad they've changed it for the better as the old system could be seen as legalised loan sharks.

 

Hi Kodiaqsportline, it was all done over the phone and then as you say all email and online documents and signatures etc. The dealer was quite a distance from me and having bought the previous two Karoq actually at the dealers and having no problems I felt safe purchasing 'blind'  through Skoda too.

6 hours ago, Bianconero said:

Hi Kodiaqsportline, it was all done over the phone and then as you say all email and online documents and signatures etc. The dealer was quite a distance from me and having bought the previous two Karoq actually at the dealers and having no problems I felt safe purchasing 'blind'  through Skoda too.

 

No matter how careful we all think we are, complacency happens to us all and it's normally only when things go wrong we find out about it.

 

Did you find out what finance deal you actually signed up to?

No not as yet, been at work today, but tomorrow will log onto that vwfs website and see what I can find out. Will let you know, and thanks again.

17 hours ago, kodiaqsportline said:

 

No matter how careful we all think we are, complacency happens to us all and it's normally only when things go wrong we find out about it.

 

Did you find out what finance deal you actually signed up to?

I logged in to that vwfs website and what I noticed is that my previous Karoqs both show as Hire Purchase, whereas the current one shows as Personal Contract Purchase, would that be the reason for the difference in the amount I have to pay back?

3 hours ago, Bianconero said:

I logged in to that vwfs website and what I noticed is that my previous Karoqs both show as Hire Purchase, whereas the current one shows as Personal Contract Purchase, would that be the reason for the difference in the amount I have to pay back?

 

No.  The £4000 above settlement figure makes no sense if it's PCP.

 

You can request a settlement figure via your online account.   See if that agrees with what you were told over the phone.

Something is off. Finance is set as fiscal rules,  so can't be made up as you go along.  I hand had PCP and settled and the figure is always less than the sum of its parts

Armed with the info from the vwfs site, some paperwork I had in my email from time of purchase, and the helpful replies on here I called vwfs and they agreed the figure was wrong, and have adjusted it down. I didn't hang around to ask what the issue was, just happy to have got to the figure that I was expecting. Thanks everyone for your help.

1 hour ago, Bianconero said:

they agreed the figure was wrong, and have adjusted it down.

 

Now sounding  like the 1st VWFS agent thought you wanted to 'cancel' the PCP agreement rather than 'settle' it. Glad you got it sorted in the end.

 

Bet you use the online system to obtain settlements from now on

Edited 19 July, 20232 yr by kodiaqsportline

16 minutes ago, kodiaqsportline said:

 

Bet you use the online system to obtain settlements from now on

Definitely! And thanks again for pointing me there 👍🏻