Paying off a credit agreement early?

[Rogerborg]

I did this about a decade ago, but wanted to check with the civil law / collections goon types about whether it's still viable.

My plan is to buy a car on "credit" from Dodgy Dan's Cut and Shut Shack, accept whatever usurious rate of interest that they want to charge in return for a lower total figure (but a high monthly repayment), then drive home and pay off the credit in full - because I am considerably richer than yow.

I recall last time that I incurred an admin charge (£20 or £25 or so) for doing this but otherwise just paid off the headline figure, not any of the interest.

However, things may have changed since then, so I wanted to get a heads up on whether it's still viable, or whether I'm likely to get stitched up by pre-applied interest, i.e. I think that I'm "borrowing" £5K but the amount owed immediately is actually £7.5K or so.

I can and do read contracts, I'm just looking for a heads up about the current state of the credit market and whether I'm likely to find a "borrow £5K, pay back £5K" deal out there today.

[UPDATE]
Eh, never mind, found it.

Consumer Credit Act 1974 section 66A: I can cancel within 14 days without reason, repay the loan amount plus only the accrued interest (pennies, and with no added fees or charges) and get title to the vehicle even if it's sold under a hire-purchase agreement.

Man, usurers just can't catch a break these days.
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GONE: HN125-8, LF-250B, GPz 305, GPZ 500S, Burgman 400 // RIDING: F650GS (800 twin), Royal Enfield Bullet Electra 500 AVL, Ninja 250R because racebike

[mrtEE]

[flat spot]

If you've got the money why not pay cash or am I missing something?

[Kwaks]

" I can cancel within 14 days without reason, repay the loan amount plus only the accrued interest (pennies, and with no added fees or charges) and get title to the vehicle even if it's sold under a hire-purchase agreement. "

If it was signed on their premises.

But yes, generally can cancel after gaining a discount from the retailer due to him getting a backhander from the finance company.

If you miss the 14 day window on it, and restrictions apply to overpaying, then the best way out is to pay half the balance each month.
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[Rogerborg]

[DrDonnyBrago]

Good idea, please let me know how it turns out.

I don't generally buy from dealers but that is a nice trick to keep in mind for future.

Cheers

Would the loan amount be for the ticket price of the car, or the price plus interest? Would that be something to look out for in the fine print?

[D O G]

[JonB]

Wow, what a good idea.

Here's a question, would you be able to do a balance transfer onto a credit card as some cards now offer 24 months interest free!
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[Rogerborg]

It looks like you should be able to pay off the loan in any reasonable way.

And it shouldn't be too much hassle, since the statute looks fairly clear about the unconditional right to cancel within 14 days. Just phrase it as a clear instruction by email and/or recorded delivery letter.

Of course, a dodgy financier could simply try to ignore the instruction to cancel, but with the direct debit also cancelled, what are they going to do then? Demand their money back? I've already offered to pay it.

However, I'd be sure to park the car elsewhere until I have clear title, in case Dodgy Dan decides he'd rather have the car instead of the money.
____________________
Biking is 1/20th as dangerous as horse riding.
GONE: HN125-8, LF-250B, GPz 305, GPZ 500S, Burgman 400 // RIDING: F650GS (800 twin), Royal Enfield Bullet Electra 500 AVL, Ninja 250R because racebike

[TQ]

Same principal works for electrical goods in Currys, Comet etc...

Get them to knock down the price by agreeing to take the overpriced extended warranty. Cancel warranty within 14 days. Profit.
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First Bike :Gilera DNA 50 | Second: Imported 1989 NSR125
Third: 1998 Yamaha XJ600N | Currently: 1999 Yamaha FZS600

[Rogerborg]

Oooh, nicely spotted.
____________________
Biking is 1/20th as dangerous as horse riding.
GONE: HN125-8, LF-250B, GPz 305, GPZ 500S, Burgman 400 // RIDING: F650GS (800 twin), Royal Enfield Bullet Electra 500 AVL, Ninja 250R because racebike

[Nick__C]

[flat spot]

[dsb79]

[Jrod]

[t121anf]

law is different now, you have to pay off the highest interest balance first, so if the transfer fee earns interest it will be paid off well before the balance transfer

[Jrod]

You pay a flat rate one off charge to do the transfer.

You don't pay anything for owing them the money for the time that the interest free credit lasts.

[Black Knight]

Re the OP

Bought a car on finance a few years back. Decided to pay it in full shortly after, iirc cost be about £100. No sure if that was first month interest or admin fee but it wasn't an issue for the finance company. Very easy to deal with.
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[Beez]

Nice one Roger, I will bear this in mind when at the dealership next month
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