VT advice motorloan balloon

[MCRMatt]

I am 3 years into a 4 year PCP car finance with fiat financial services and have now paid 50% of the total balance.

I was under the impression that I would now be able to terminate the agreement as the car is no longer suitable but having spoken my finance company they are saying that this is not an option due to the type of agreement its a motorloan balloon.

Is this correct and what are my options?

Thanks

[R0b]

Re: VT advice motorloan balloon

Hi Matt,

I am aware that Fiat Financial offer fixed sum loans which is what you might have rather than any form of hire-purchase agreement. I've never heard of a motorloan balloon but the only way to really find out what sort of agreement you have is to upload it on here (personal info redacted) and I can take a look at it.

You also say that you were under the impression that you could terminate the agreement, can you expand on this? Did you specifically ask about whether it was possible to terminate the agreement if its not suitable, and do you have evidence of this?

[Amethyst]

Re: VT advice motorloan balloon

Fiat seem to offer a balloon payment version loan according to this >> https://www.fiat.co.uk/content/dam/f...e-Brochure.pdf

Best thing is to redact and post up A copy of the agreement and terms - any probs doing it it's fine to email it to me - admin@legalbeagles.info

[R0b]

Re: VT advice motorloan balloon

Hmm never seen that before but the way I read it is that its not actually a hire purchase agreement (so its misleading) but it's actually a conditional sale agreement because it says the final balloon payment is not optional (irrespective of the GFV, that's normal anyway under HP/CS agreement types) - that's the key difference between the two where the former you can return the car at the end of the agreement whereas the latter is that you are committed to purchasing the car and paying the balloon payment, regardless of the amount. Other than that slight difference, there's diddly squat between the two agreements.

Therefore they should still have the option to VT and if they don't then perhaps it invalidates the entire agreement completely as Fiat would be in statutory breach. Of course the only way of confirming that would be to take it to through the courts and getting a declaration.

[MCRMatt]

Re: VT advice motorloan balloon

Fiat seem to offer a balloon payment version loan according to this >> https://www.fiat.co.uk/content/dam/f...e-Brochure.pdf

Best thing is to redact and post up A copy of the agreement and terms - any probs doing it it's fine to email it to me - admin@legalbeagles.info

Thanks for your replies,

It does indeed seem it is a fixed sum loan regulated by the consumer credit act 1974 with an optional final payment at the end of the term- I always assumed until now it was just a standard PCP deal but no where in the agreement does it mention returning after paying 50% of the balance- does this mean that BY is really not an option?

Thanks

[R0b]

Re: VT advice motorloan balloon

It's the substance not the form which is what really matters i.e. the agreement might be titled 'Fixed Sum Loan Agreement' but if the contents of the agreement are akin to a HP/CS type agreement e.g. you pay monthly instalments then a balloon payment following the end of the term, then it's likely that the court will consider it to be a HP/CS agreement.

A fixed sum loan does exactly what it says on the tin - it is a fixed sum of money which has a fixed number of instalments and a fixed rate of interest over a fixed period of time - it works in the same way as a loan you receive from your bank. Alos a fixed loan gives you immediate ownership of the car whereas a HP/CS does not.

But I am only speculating, unless your able to provide a copy of the agreement, it's difficult to say.

[MCRMatt]

Re: VT advice motorloan balloon

It's the substance not the form which is what really matters i.e. the agreement might be titled 'Fixed Sum Loan Agreement' but if the contents of the agreement are akin to a HP/CS type agreement e.g. you pay monthly instalments then a balloon payment following the end of the term, then it's likely that the court will consider it to be a HP/CS agreement.

A fixed sum loan does exactly what it says on the tin - it is a fixed sum of money which has a fixed number of instalments and a fixed rate of interest over a fixed period of time - it works in the same way as a loan you receive from your bank. Alos a fixed loan gives you immediate ownership of the car whereas a HP/CS does not.

But I am only speculating, unless your able to provide a copy of the agreement, it's difficult to say.

Thanks for your reply, I have emailed you copies of the agreement.

Cheers
Matt

[R0b]

Re: VT advice motorloan balloon

Hi Matt, where have you emailed copies to? was it the admin@legalbeagles.info email address?? [MENTION=6]Amethyst[/MENTION]

[MCRMatt]

Re: VT advice motorloan balloon

Hi Matt, where have you emailed copies to? was it the admin@legalbeagles.info email address?? [MENTION=6]Amethyst[/MENTION]

Admin@legalbeagles.info

[Amethyst]

Re: VT advice motorloan balloon

Apologies, rather a long call that. The jpg bigger terms are the ones with the 'ending agreement' bits on ... the smaller full text one is primarily DPA stuff.

Here

Oh that one was sideway,s - okay just the relevant bit, hopefully up the right way ( apols for the black bit that's me not the doc )


So no deposit or part exchange at all ?

[MCRMatt]

Re: VT advice motorloan balloon

Apologies, rather a long call that. The jpg bigger terms are the ones with the 'ending agreement' bits on ... the smaller full text one is primarily DPA stuff.

Here

Oh that one was sideway,s - okay just the relevant bit, hopefully up the right way ( apols for the black bit that's me not the doc )


So no deposit or part exchange at all ?

Hi

No no deposit or exchange.

I have just spoke to them again and pushed a bit harder this time as the more I think about it the more I feel like I'm having the wool pulled over my eyes- in the end she gave me a complaints email address and this is what I have sent-


I wanted some clarification regarding the above finance agreement.

Until recently I was lead to believe the agreement was a PCP where by I make monthly repayments at a set amount for 48 months with restricted mileage and with a deferred optional amount- the GMFV at the end of which I can simply had the car back or purchase it.

Now I am being told that despite all of the above being applicable it is not in fact a PCP deal but I in fact own the car outright from the day the agreement started and is treated as a personal loan and you have no interest in the car- but if this was the case why to all the restriction and terms point to it being a HP deal and why would my car show as having a finance marker against it if I do own the car outright and is not a HP Agreement?

If someone could get back to me regarding this as at the moment I am very confused as to what my options are at the end of the term and as to why despite all the T&Cs Ponting to a HP agreement you are telling me it isn't with no hand back option despite paying over 50% of the total cost and to now also to be told that there is no guarantee that I can hand the car back at the end of the agreement

[Amethyst]

Re: VT advice motorloan balloon

I'm sure R0b will have a proper look, but to me it seems a bit of a hybrid - you can hand the car back at the end of your 48 months and not pay the final payment of 4.5k .... ( so you basically rented it for 46 months for 223 a month) or you can buy the car for 4.5k ( option 2?) -- I don't actually understand the outcome of Option 1 as it doesn't say 'and keep the goods' which would make it the same as Option 2 nor does it say 'and give us the goods back' ..... odd.

[R0b]

Re: VT advice motorloan balloon

Perhaps this is one for trading standards / Advertising Standards Authority.

Maybe my eyes are deceiving me but I can see no reference as to ownership of the car in there. Second, as I speculated Fiat have titled their document as a fixed sum loan agreement and those terms you've signed up to do not correspond with what is understood to be meant by 'fixed sum loan' e.g. Fixed amount of fixed interest over a fixed period. The fact that there is a balloon payment at the end negates any assumption that it can be a fixed sum loan.

The title itself does not correspond with the brochure link posted by Amethyst. It is being advertised as a 'Hire-Purchase balloon' agreement which is an entirely different description to the 'Fixed Sum Loan'. It is being represented as a conventional hire-purchase except that there is a larger balloon payment at the end and that the final payment is not optional. Take away all the marketing spiel (from the brochure) and what your left with really is a conditional sale agreement type.

There is case law on this already where an agreement was being dressed up as a hire-purchase but when the court looked into it in more detail, it was in fact a conditional sale agreement because the hirer did not have the option to purchase but was obliged to purchase at the end of the agreement - can't remember the name but I'll fish it out.

My personal view is that there is a clear misrepresentation here where, there is a statement of fact in the brochure but when the documents come through it's something entirely different. Also there is no reference from what I can see about who owns the vehicle during the agreement, and for those reasons in addition to the above, the agreement has been improperly executed meaning it is only enforceable by an order of the court but also if it is a misrepresentation, you can terminate the agreement and owe no further monies and/or seek damages yourself.

You can also seek a declaration from the court that the creditor is not entitled to enforce the agreement.

[MCRMatt]

Re: VT advice motorloan balloon

Perhaps this is one for trading standards / Advertising Standards Authority.

Maybe my eyes are deceiving me but I can see no reference as to ownership of the car in there. Second, as I speculated Fiat have titled their document as a fixed sum loan agreement and those terms you've signed up to do not correspond with what is understood to be meant by 'fixed sum loan' e.g. Fixed amount of fixed interest over a fixed period. The fact that there is a balloon payment at the end negates any assumption that it can be a fixed sum loan.

The title itself does not correspond with the brochure link posted by Amethyst. It is being advertised as a 'Hire-Purchase balloon' agreement which is an entirely different description to the 'Fixed Sum Loan'. It is being represented as a conventional hire-purchase except that there is a larger balloon payment at the end and that the final payment is not optional. Take away all the marketing spiel (from the brochure) and what your left with really is a conditional sale agreement type.

There is case law on this already where an agreement was being dressed up as a hire-purchase but when the court looked into it in more detail, it was in fact a conditional sale agreement because the hirer did not have the option to purchase but was obliged to purchase at the end of the agreement - can't remember the name but I'll fish it out.

My personal view is that there is a clear misrepresentation here where, there is a statement of fact in the brochure but when the documents come through it's something entirely different. Also there is no reference from what I can see about who owns the vehicle during the agreement, and for those reasons in addition to the above, the agreement has been improperly executed meaning it is only enforceable by an order of the court but also if it is a misrepresentation, you can terminate the agreement and owe no further monies and/or seek damages yourself.

You can also seek a declaration from the court that the creditor is not entitled to enforce the agreement.

Again thanks for your help,

If I get no where with fiat how would I go about taking it further in terms of court, trading standards or with the FFCA?

What would my next step be?

[Amethyst]

Re: VT advice motorloan balloon

Option2 b refers to the vehicle, maximum mileage and serviced in accordance with manafacturer etc - I can't see a maximum mileage specified though? Is there another document ?

Also it refers to goods and services, then later says IF you take out a loan as part of this agreement ?? ...