Clever finance person required

[bobjebb]

Not Audi related but general finance question.

I required short term finance when I bought my new car - I borrowed all of the money less 10%, knowing that after a month or so I would pay back the loan in full with an incoming bonus.

I now want to pay off the loan in full, the best way possible and avoiding uneccesary penalties. I understand ther is a clever way to do this, as follows, taken from another forum)

I am not really meant to confirm all this or the lenders who I broker for will get upset. Definitively to avoid redemption penalties
1) Ask any finance Co for the capital balance outstanding (this is different from a settlement figure) You can just say your working out your finances !
2) Pay this amount less 1 months installment
3) After this has been credited to the finance companies account then request
4) A Settlement figure. ( any redemption penalty can only then be calculated against the balance outstanding and any interest due.
This works on most finance loans not just cars EXCEPT on fixed rates where partial redemption penalties are written into the finance agreement. BUT check the small print for clauses like 6 months penalty for redemption in first x yrs etc

p.s didnt even tell this to Porsche GB head of consumer finance who I played Golf with a couple of years ago !!!!!!

So, I've tried to get a balance outstanding figure but they wont give me one, they are "only allowed to give a settlement figure". So I don't know what the best course of action is. I obviously can't ask the finance house as it's not in their interest to help me.

Any simplistic solution very much welcome, I'd like this off my 'to do' list!

I obviously have the vulgar specifics of figures if that helps. it's a 4 year deal + balloon

Cheers, much appreciated.

[dazzer]

I am by no means an expert but I have attached a document from the OFT regarding aspects of the CCA - particlarly to do with early redemption. It may shed some light as to what they have to disclose regarding settlement figures, i.e. how much and how it is arrived at. There is also a common method of calculation interest and capital reduction throughout the life of a credit agreement - it's called something like the 'rule of 75s'. If you can ascertain if they are using this rule you should be able to calculate the remaining capital outstanding.

EDIT: Attachment hasn't worked. PM with email address and I'll send it.

[derdle]

There is a risk that the account will be marked as an "abnormal termination" which may affect your future ability to obtain finance. The method you mention may well be "legal" in some way but could still be classified as "abnormal". Years ago I handed back a car in accordance with the terms of the agreement and the finance house did this very same thing to me.

TBH, never heard of this, I'll run it past a colleague on Monday for an answer.
By the way it's the rule of 78's.. a 12 month agreement - 1+2+3+4+5+6+7+8+9+10+11+12 = 78. So interest in month 1 is 12/78ths of the total. In month 2 it is 11/78ths of the total etc etc. If it's a 4 year agreement you have to extend this all the way up to ... +45+46+47+48.


Paul

[dazzer]

Yes the 78s