QLD Is This a Car Loan Rip-Off?

[SimonO2802]

Hi all,

Any feedback or guidance here would be very much welcomed.

Disclaimer: I understand the onus is ultimately on me to read and understand what I'm signing. However, being naive and excited to get myself into a car, I trusted the car dealership/finance group.. its costing me!

Here's the rundown.

Original Car principal amt: $6500

Through add ons, fees, costs, warranties etc, this amount was increased to $8350. Increased to $9460 in the hands of the finance company through fees.

At the rate of 29.99% I'm scheduled to pay a total of $14150 for the car.

So far I've paid $7.5k, and owe $6640. With the repayment schedule (54 x $200 p/f), the remaining amount would end up costing me $10.7k, meaning I've paid a total of $18.2k for a $6500 car.

Having a look at other car loans in the market today, they seem to be around 5-10%. Even at 15% (half my current rate), I would only have to pay $11,400ish. Considering I've paid now $7500, would leave me with around only $4k owing.

Do you think there's any chance I could get my amount owing reduced to only $4k? Means I've still paid $11,500 for a $6500 car......

I don't think Id be able to break contract, as shitty as it is, I'm just feeling victimised.

Happy to provide a copy of the contract if anyone cares to read.

Thanks

 

[Rob Legat - SBPL]

Consumer credit is a technical area. The good things is that it is squarely weighted in favour of the consumer. If the lender gets any one of a large number of requirements wrong, you may have an angle to get the charges reduced.

Not only do the contracts and notices need to be correct, they also need to have been done in the order.

The unfortunate part is that means you have to check through a large number of requirements. It's more than just a matter of looking at your credit contract.

There's also the possibility you may have been charged more than the allowable amount when the credit few and charges are factored. This takes a complicated calculation to figure out.

 

[SimonO2802]

Rob,

Thanks for the speedy reply.

Do you have any help as to where I would proceed to from here with regards to getting the things checked that I need to?

And would that come with a cost? (and would that cost be less than the money I'd potentially save having it re-contracted - otherwise no point, really).

Cheers

 

[Rob Legat - SBPL]

It depends on which way you want to go.

Your first option might be to call a financial counsellor. You might qualify for their free service by calling 1800 007 007. They may be able to put you in touch with a community legal service who may be willing to look at it for you. There are a few around who are running campaigns against car yard add on warranties and insurances, so you might be lucky.

Alternatively, you could look at engaging someone to review the documents and give you some advice. How much that would cost will depend on the amount of documentation involved, and any necessary work to obtain any 'missing' documents. If there are any deficiencies, you will probably be able to go through their internal and external dispute resolution schemes. These are free to you, and the external decision is binding on them (assuming they are appropriately licensed).

Whether the whole process is worth it in terms of cost vs benefit is too hard to tell without knowing the information and amounts involved.

 

[SimonO2802]

Still no luck here with finding any help Rob, no-one willing to give me advice when I've called/emailed them.

Have also emailed my finance company Monday of last week, was advised "your email has been raised to state manager" but no reply. Original email dated 25th September.

I'm fuming on the inside that I got myself into this pickle to begin with.

Being that the contract is now 2+ years aged, do you think its not even worth my time seeking to dispute it ?

Thanks

 

[Rob Legat - SBPL]

Always. The odds are pretty firmly stacked in your favour, you've just got to ride it through. Just be aware of the time frames in which they have to reply, and hold them to it. For example:

- If you want copies of documents: 14 days if the original was created within the year prior to request; otherwise 30 days.

- If you dispute a liability, they have to provide you with a written notice explaining the liability in reasonable detail (unless they agree with your dispute). This technically falls under dispute resolution time frames (see below).

- If you request a copy of your credit assessment, they have to provide it in 21 business days (once you're over the 2 year mark - otherwise 7 business days).

- Ask them for a copy of their dispute resolution policy and check their time periods in it. They should include acknowledging a complaint immediately, and fully responding within a maximum of 45 days - unless the complaint involves a default notice or hardship (where it's reduced to 21 days). Any outcome that doesn't fully come out in your favour must include a statement of your rights about taking the matter to external dispute resolution.

Failure to comply with any of these makes them liable to be fined, and the penalties are stiff.

 

[SimonO2802]

Ok thanks, I'm going to go back to them via email now and ask for a copy of their dispute resolution policy. Stay tuned and wish me luck.