Volvo PCP settlement figure!
Discussion
Hi, we purchased a C40 in October last year, PCP deal, £23,500 deposit with a finance balance of £35,400 over 48 months, monthly payments of £294 per month, £11,360 interest payable over 4 years.
Called for a settlement figure on Friday as we want to change cars and was quoted a settlement figure of £40,549! I spoke to one agent who stated their terms were 58 days interest as a penalty for early repayment. This settlement figure represents the equivalent of over 660 days interest.
I have had numerous finance agreements in the past, all of which have been settled early, including another one earlier in the year which was also through Santander (Volvo finance) and the 58 days interest was charged as expected.
No one at Volvo can explain why the equivalent of nearly 2 years interest is payable after only 6 months so I have escalated this to a complaint. Has anyone else had a similar experience? Should also add I run a small car sales company and we offer finance and I have never seen such charges applied to an early repayment.
Called for a settlement figure on Friday as we want to change cars and was quoted a settlement figure of £40,549! I spoke to one agent who stated their terms were 58 days interest as a penalty for early repayment. This settlement figure represents the equivalent of over 660 days interest.
I have had numerous finance agreements in the past, all of which have been settled early, including another one earlier in the year which was also through Santander (Volvo finance) and the 58 days interest was charged as expected.
No one at Volvo can explain why the equivalent of nearly 2 years interest is payable after only 6 months so I have escalated this to a complaint. Has anyone else had a similar experience? Should also add I run a small car sales company and we offer finance and I have never seen such charges applied to an early repayment.
Any details in the T&Cs to state break point at 2 years and interest due up to break point if terminate early? It's all I can think of (after picking myself up off the floor at the thought a C40 costing nearly £60k including interest - that can't be true - isn't that one of the smallest Volvo's in range??).
Yes, the settlement figure includes the GMFV at £32k and there are no T&C relating to early settlement and how the settlement figure is calculated. The Santander agreement I had on another car came with a separate sheet explaining early repayment changes and details of how ,such interest would be payable.
Skyway said:
No one at Volvo can explain why the equivalent of nearly 2 years interest is payable after only 6 months so I have escalated this to a complaint. Has anyone else had a similar experience? Should also add I run a small car sales company and we offer finance and I have never seen such charges applied to an early repayment.
"equivalent" is the key word there. It's got nothing to do with interest.bennno said:
SydneyBridge said:
Interest is hugely front loaded so you have been mostly been paying interest so far
I worked for BMW finance a did a course on how settlements are calculated, very complicated
Not really regulated agreements, which 99% are, is 2 months interest as a penalty.I worked for BMW finance a did a course on how settlements are calculated, very complicated
When you settle you save all the interest (bar 58 days) you would have paid if you'd continued the deal.
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