The FCA has published its long-awaited review of car finance: Our work on motor finance – final findings. This work began back in April 2017. News reporting has seized on the FCA's findings that commission structures give dealers an incentive to charge higher interest rates. For example: Car buyers overcharged £1,000 by dealers for loans, says watchdog. But here I am interested in the FCA's … [Read more...]
Voluntary Termination (VT) – how to end your car finance early
When you are buying a car on finance you have the right to hand the car back and end the agreement. Depending on how much you have paid, you may not need to pay any more. This is known as Voluntary Termination (VT). It applies if you have an HP or PCP finance agreement. This article explains your rights and what you have to do to VT your car. The finance companies don't like this - they … [Read more...]
Car finance – what happens in an IVA?
Cars on finance can be a difficult problem if you are thinking of an IVA or already in one. And with more than a million cars a year in the UK being bought on finance, this is an increasingly common situation. It can make a big difference if you are leasing a new Range Rover or if you have a 5 year old small hatchback on HP! You will need to talk to your IVA firm about your particular … [Read more...]
Can I get another car after VT or is part exchange better?
A reader asked: I want to terminate my PCP car finance. The car's fine, good condition, but we now need a bigger car. According to my contract I can hand it back. But I am going to need to get another car, so I am worried this will harm my good credit record. Would part exchange be better? Your right to end a PCP contract early Personal Contract Purchase (PCP) is the most common way to buy … [Read more...]
What’s the right car finance option for you?
Cash is often the most cost-effective way to buy a car. But this isn’t always possible, especially if you have money problems. In 2018 more than 80% of new cars in Britain were bought on finance - but that doesn't mean it's going to be right for you! The four ways to finance your car a personal loan - a loan from your bank or building society to spread the cost over 1 to 7 years. Here … [Read more...]
Avoid insurance rip-offs if you pay monthly
MoneySupermarket have found that in 2016 on average people are being charged an extra £73 to pay their car insurance monthly. And as more than 45% of people pay do this - up from about 40% in 2014 - that is a lot of extra profit for the insurers. Do people realise the extra cost? In May 2015, the Financial Conduct Authority published its Thematic Review of Provision of premium finance to … [Read more...]