Who's settled their Toyota PCP early?

[RonYarisX]

Question for those who've settled their PCP early ( i.e. requested a settlement figure from Toyota finance ), what were you charged for this?

I've never had an issue with other manufacturers - purchase vehicle using PCP, settle the PCP agreement in the following weeks, and all I've ever paid in addition to the outstanding loan, is a small admin fee - £30 or thereabouts.

I've done the same with this Toyota, requested a settlement figure but they've quoted me approx £500 MORE than the outstanding balance. They provided no reason for this so  I questioned it and the reply came back, 'Toyota charges 14days interest to settle early'.   I suspect that was a customer service agent's reply rather than anyone from finance as clearly £500 isn't remotely near 14days interest on £25k loan. ( a loan shark would charge less 😀 )

I suspect their finance dept has made a balls up with my settlement figure so waiting to hear back from them, but was just wondering what additional fee were others charged for settling their PCP agreement early?

[Dezzer21]

I payed the first payment then requested settlement figure and paid without any other interest.

[RonYarisX]

👍  Many thanks for your reply. I was expecting to pay a nominal fee, tho nothing in T&C to say as much. That said, the 14days interest was news to me because nothing in T&C about that either.  ( although I don't mind paying, as it's peanuts anyway ).

[Mojo1010]

14 hours ago, Dezzer21 said:

I payed the first payment then requested settlement figure and paid without any other interest.

When was this done?

10 hours ago, RonYarisX said:

👍  Many thanks for your reply. I was expecting to pay a nominal fee, tho nothing in T&C to say as much. That said, the 14days interest was news to me because nothing in T&C about that either.  ( although I don't mind paying, as it's peanuts anyway ).

When I did it last month after picking up the car, they charged 56 days interest which comes to approx £270. 

Nothing in their terms to state such specific amount of days. It's says '‘We may charge a compensatory amount in accordance with laws and regulations'.

So am looking into whether they are doing this legally. 

[Derf47]

17 hours ago, RonYarisX said:

Question for those who've settled their PCP early ( i.e. requested a settlement figure from Toyota finance ), what were you charged for this?

I have done this 3 times, Jan. 23 Apr. 22 & 2020. I have not been charged an admin fee or any early settlement charges. 

[RonYarisX]

Thanks for the above replies.

Don't know quite what to make of those T&C as nothing like that on mine. Is that UK?

Nobody can effectively say we 'might' charge you a fee the sum of which will be at our discression. I'm not a legal eagle, but if like employment law, it's the word 'reasonable' that stands out.  It implies that you can settle as long as the finance company aren't out-of-pocket, which is in line with 'admin fees'.

Obviously others haven't been charged but an early repayment does involve extra work on their behalf ( no matter how little that is ) so as I say, I don't mind that one little bit - to me it's 'reasonable' to expect it.

Hey ho, I'm sure I'll find out in the coming days assuming customer services flag this with someone at Financial Services and don't just provide a bog std 'computer says no' type reply again.  

[Mojo1010]

UK. 

Precisely, they can make up any number they want then. I told them so and that I'm seeking financial advice on the matter. 

[Jimota]

I’ve settled my finance agreement early on a number of occasions with different car manufacturers and have never been charged any fees.

[RonYarisX]

Update:  Just had word back from another customer service agent.

Interest charged is 56days not 14days.

And then as Mojo100 says, they refer to both that policy and sent an email pointing to a government website.

Sounds like it's going to get messy because customer services don't seem to know their left arm from their right.

If the settlement fee was 56days then they should have stated such. Nowhere does it say 56days. Their T&C do not give licence to make up rules up as they go along.

It may interest some of you who kindly replied above, that customer services also said in their reply, that to make it fair to everyone, the 56days interest is applied to all their customers !

'Fair' is not the word I'd use when they seem to believe they can apply any figure they want. How can anyone seriously believe they can apply fairness without writing down a policy? If you want to apply fairness you certainly don't use the wording 'We may charge a compensatory amount'.   May?  what does that mean?  The CEO will accept a !Removed! as an alternative means of payment?  FFS.

I can'r believe how legally niave such a large company can be.

 

[+Steve]

done this about 4 times with Toyota finance and never paid a fee

[Mojo1010]

Update: An email received from Toyota FS when I questioned the 56 days isn't explicit in the terms. (Will still pursue this until I know it is legal what they are doing).

'Good afternoon,

Thank you for your email.

The 56 days of interest is set by the Consumer Credit Act and not ourselves and they could change this at their discretion at any time, so it is not written in our Terms and Conditions. However you can check this on their website.

I hope this helps.

Kind regards,

Rachel S
Customer Experience Executive
Toyota Financial Services'

[jthspace]

Asked yesterday and it gave a settlement figure on-line.  It was just a sum (e.g £12,345) and made no other reference to any sort of fee or interest.  Sum was valid for 30 days.  This was using the TFS we page.

[Mojo1010]

49 minutes ago, jthspace said:

Asked yesterday and it gave a settlement figure on-line.  It was just a sum (e.g £12,345) and made no other reference to any sort of fee or interest.  Sum was valid for 30 days.  This was using the TFS we page.

Correct, though you have not said whether this figure is your loan or more. 

[jthspace]

1 hour ago, Mojo1010 said:

Correct, though you have not said whether this figure is your loan or more. 

It was just the amount that TFS said was needed to settle everything.  My point was that it didn't break the amount down to be loan+fee which was in response to another poster saying that he had been charged to settle early.  Online, it gives no way of querying how the figure is arrived at.  I didn't plan to settle my TFS loan at the moment, I simply requested a settlement to see what they would provide.  

I'm pretty sure that if they included a fee of any sort, it should be made clear to the customer though.

[Mojo1010]

Well, the OP and I know exactly what our loans are and the amount of interest added on. And no, this was not made clear. 

I.E Loan £10,000

Settlement £10,500

= £500 interest. 

 

[RonYarisX]

6 hours ago, jthspace said:

Asked yesterday and it gave a settlement figure on-line.  It was just a sum (e.g £12,345) and made no other reference to any sort of fee or interest.  Sum was valid for 30 days.  This was using the TFS we page.

My case is ongoing. I've effectively sacked customer services as they've proved they know nowt all. They give standard answers to standard questions which they're unable to deviate from. Some commonly refer to this as 'computer says no'.

My query? Well they've now resorted to making false statements to justify their position. I'll bring them to account for that. In the meantime I've paid off the amount financed, it's this extra 56days charge I have issue with and have withheld payment. I'll have to contact Financial services directly but if we get no further, the next step is the ombudsman.

I'll try and explain:

To compound their error, customer services are saying to make it fair, everyone pays 56days interest when they settle early. I don't belive that's right. I can't see how it could be right. I think they're only giving me their own interpretation of the rules, which of course are impossible to work out because they haven't produced those rules in writing.   What I believe MAY be happening, is as I said above, Financial Services will require an administration fee to cover their losses for settling early. However that fee may be set at a min. of 56days interest, in other words once 56 days interest has been paid, it no longer applies.

A minimum 56 days interest is a completely different proposition to 'everyone pays 56 days interest when  settling early'.

Here's the problem I see with some of the above replies from forum members. People above are saying they settled without paying a fee, but surely that's all dependent upon when they settled, what the settlement figure was and what interest rate was being charged. If you request a settlement figure exactly one month after taking delivery, then you'll have aleady paid 30 or 31 days interest. If you settle just before the 2nd month then you'll have more than paid 56days woth of interest. If my hunch about there being a minimum fee is correct, that's why people  could have settled their PCP without paying a fee.

It's a right mess they've got themselves in to. It's the lack of wording in their T&C that's the whole problem. And that's what I have issue with. Nobody knows what the actual rules are. How can I make a financial judgement based on no information? or worse still, the wrong information which cusotmer services are giving me.

Who knows what will happen but I'm quiety confident I'll reach some agreement with Financial Services because their lack of transparancy is at the very least bad practice, it may well be bordering on illegal.

As I've always said I'd be more than willing to pay an administration fee / exit fee call it whatever you like. Common sense says the lender should not be out of pocket because the customer has decided to settle early - it's only fair.

Even the payment I made today highlighted even more potential issues ( which I'll save you the time with, this response is long enough ) but I was really taken aback when I paid the amount Toyota financed today. With VWFS I simply transfered money via BACS - no problemo, but that option isn't available with Toyota, my only options were to pay via Debit or Credit card. I paid almost £26000 by debit card. Err who pays for the debit card charges?  It'll be the receiver ( Toyota ) who gets billed but that's going to put them even further out of pocket. How do they claw this back?  by asking for 56 days interest.  I'm almost certain that's what's behind all of this.

Nobody is allowed to simply demand a fee without not only setting out how that fee is calculated and without clearly itemising their calculations. But that's exactly what Toyota Finance are doing.

The whole process is wide open to corruption. This is the UK not Russia.

 

[RonYarisX]

4 hours ago, Mojo1010 said:

Well, the OP and I know exactly what our loans are and the amount of interest added on. And no, this was not made clear. 

I.E Loan £10,000

Settlement £10,500

= £500 interest. 

 

56days interest on a loan of £10000 is £500 ? 😲

There's something very wrong with that calculation.

My loan was approx £25600 and 56days interest is being calculated at £492

This is the WHOLE problem - a lack of documentation. The customer is unable to find out how those figures were arrived at but...

If the APR was 10% on a £10000 loan, then as a ball park figure:

Interest over a year = £1000.

365 days in a year =  £2.74 per day

x56 days = £153 

And you're being charged £500 ? What interest rate are they using - 29.9% APR 🤣

Sounds like there's something seriously wrong with those figures, but what the hell do I know because we can't see the T&C they use to calcualte these early settlement fees.

 

[RonYarisX]

Update. Toyota Financial services have finally acknowledged receipt of my complaint. The delay is caused by a "high volume of correspondance".   ( the less said about that the better ).

It goes on that they aim to respond within 8 weeks as per their legal requirement.

This lot are very smart at quoting legal requirements. As a credit broker, I'd like to know about their legal requirement to make financial information as clear as possible.

Here's another faux pas with their 'settlement' arrangements. I paid off the PCP loan as per the agreement in full several weeks ago which just left this ridiculous administration charge ( or whatever they call it - nobody actually knows what it's called as it's not written down in any agreement ).

At the moment the final settlement is something like £250 remaining but they'll take a monthly £450 via direct debit before that.  Which leads to yet another strange part of their PCP arrangement - In the event of the customer overpaying, Toyota Financial Services will refund that amount at a later date.

So they hold your overpayment in their account. Wonder if that takes 8wks as well?

Rather than just take the amount that's outstanding, I wonder how much interest this company earn on overpayments? This lot are a shower of foxes.  

 

 

 

[+Steve]

i never finish finish full term

usually i pay off early (which has never had a fee) or i do a part exchange early. Also i never worry about milage because that only comes in to affect if you do full term, if you PE or settle early then this does not come in to effect.

 

[Wetherfell]

As a potential future Toyota purchaser, I'm following this with interest.

I, and several friends, have paid off finance early in the past, with no penalty other than a nominal admin fee. In most cases we only took out finance as it came with an additional discount/manufacturer contribution and were even advised by the salesperson that we could terminate early and thus get the discount but avoid paying interest.

My current car (Ford) is on their Options cash plan at 0% (basically half up front, balance in 2 years) but that balance is the same now as when the two years is up - no fees. So I could pay it off tomorrow but no incentive as I'm currently earning 5% on the cash in an ISA. I had the same deal from Land Rover some years back.

However, all the above cases were classed as an HP product, while PCP is structured differently and, it seems, early settlement figures are pretty much at the discretion of the lender.

Found quite a few articles on the web on the topic which are worth a glance:

https://www.thecarexpert.co.uk/settle-a-pcp-early-2/

https://www.carwow.co.uk/guides/financing/end-car-finance-early-0597

https://www.moneysupermarket.com/news/can-you-settle-your-car-finance-early/

 

[RonYarisX]

On 9/18/2023 at 7:52 AM, Steve said:

i never finish finish full term

usually i pay off early (which has never had a fee) or i do a part exchange early. Also i never worry about milage because that only comes in to affect if you do full term, if you PE or settle early then this does not come in to effect.

 

As per above.  One of the things I'm learning from this is that when people say they've never had to pay a fee, the reality is they problably have, just they don't realise it. To be fair, why would they? I certainly wouldn't have.

It all boils down to when you settle. If you've settled after 56days then the 'settlement fee' or whatever they chose to call it will have already been paid.

 The big con is they don't tell anyone about that fee, they don't break down the repayments or attempt any form of accountabilty. The only way you can see the fee is if you settle within the first 56 days because only then will you see the settlement is more than the loan. For those who settle after 56 days, that fee is hidden within the interest they've already paid. They really are a bunch of sneaky &£^"%.

[RonYarisX]

On 9/18/2023 at 9:05 AM, Wetherfell said:

As a potential future Toyota purchaser, I'm following this with interest.

I, and several friends, have paid off finance early in the past, with no penalty other than a nominal admin fee.

 👍 That's exactly what should happen. There's nothing wrong with Toyota charging a fee of 56 days or whatever, but there's something very wrong in that they don't make this clear in their T&C. They word it in such a way you can read anything you want in to it.

Regarding taking out PCP with Toyota finance - It all depends on your deal. Even adding the unexpected £450 fee or whatever the exact figure is, it'd still have been financially better off buying via PCP so I'm not complaining on that front,  but that's not the point.  When Toyota's own customer services get it so wrong, what chance has the ordinary person in the street? 

By the way, Lexus is exactly the same. I've only found one instance of a Lexus owner who questioned it but he never followed up.  I guess most people give up persuing it further - Toyota customer services wear them down with their BS.  

[TonyHSD]

Because in the past a smaller amount of new car buyers were settling their pcp deal earlier where todays almost everyone does it. That’s why these who provide the financial deal made their way of making something. Things constantly changes. Last few checks at Carwow there were only around £600 difference between buying cash through them or getting pcp, so does it really worth going through this saga, in many cases most likely not. Each purchase very individual. 

[Mojo1010]

I have also put in my complaint, awaiting a response. Will be in touch with the ombudsman when they get back, if they don't refund the interest. 

[RonYarisX]

On 9/21/2023 at 11:00 AM, TonyHSD said:

Because in the past a smaller amount of new car buyers were settling their pcp deal earlier where todays almost everyone does it. That’s why these who provide the financial deal made their way of making something.

Your way off the mark. It's not about them making something, they're too stupid for that. It's nothing more than a case of 'computer says no'.

Here's an example. I won't use the exact wording but their T&C say that they may change the payments if circumstances change...  oh yeh?

My total loan was approx £25600. their settlement approx £26100. I paid back that £25600 loan in August and left the remainder in  dispute. They were wanting approx £500 as a settlement fee or whatever it's called. ( daylight robbery would be my preferred term ).

So in September they took their monthly £440 direct debit we had agreed to.

out of interest I requested another settlement figure, this time it was something like  £260

In October they took another £440 direct debit...

Out of interest I've just requested another settlement...  £260

And they're saying that my next £440 payment is due in November  !!!!  FFS

What the silly burgers are doing is completely ignoring the £25600 I paid them in August, and are continuing to charge interest on the £25600 loan. It beggers belief this.   In otherwords they've already taken £880 for that £500 settlement fee, and they'll take another £440 in November and presumably another £440 for the next 38months.

It has nothing to do with making money Tony, it's 100% incompetance. I'm convinced they don't know what they're doing. Their automated system simply can't cope with early settlement.

I'm going to have to settle this agreement before customer services have a chance to respond to my dispute otherwise I'm going to end up with £1000's of my money in their bank account earning interest for them rather than me. 

Which of course is another one of their T&C that they haven't acted upon, namely if you have overpaid, we'll pay that money back !   Amature doesn't even begin to describe this outfit.