About our Loans
All loans taken out with London & Surrey Motor Finance are Hire Purchase agreements. Hire Purchase agreements can be regulated or unregulated under the Consumer Credit Act. Unregulated agreements will apply to Limited Companies and Partnerships of more than 3 members. Whereas regulated agreements apply to individuals, sole traders and partnerships of less than 3 members.
Under the structure of a Hire Purchase agreement London & Surrey Motor Finance Ltd hires the vehicle to the customer for an agreed period of time, at an agreed monthly sum. The customer can then gain ownership (title to the vehicle) by paying an additional sum called the Option to Purchase Fee.
London & Surrey Motor Finance Ltd has two fixed fees, charged in addition to the finance interest. These are charged on all regulated Hire Purchase agreements.
Documentation Fee, £49.00: Charged with the first instalment.
Option to Purchase Fee, £99.00: charged with the final instalment. This transfers the title from London & Surrey Motor Finance Ltd to the customer. This is a genuine option for the customer, and if not paid London & Surrey Motor Finance Ltd retains title to the vehicle.
For unregulated Hire Purchase agreements the fees are;
Documentation Fee, £99.00: Charged with the first instalment.
Option to Purchase Fee, £99.00: Charged with the final instalment.
“Early settlement” is the term used when you pay off a credit agreement before it is due to end. It entitles you to a proportionate rebate on the interest payable on the agreement. The law provides that borrowers can settle most agreements early. The conditions are as follows:
The agreement is regulated by the Consumer Credit Act 1974 and Consumer Credit Act2006. The vast majority of our consumer credit agreements are regulated. But check the agreement - it will tell you whether it is regulated or not.
The credit is repayable at, or after, a fixed period. For example, after three years or if the whole amount falls due on a specified date.
The borrower has not terminated the agreement. This applies to both hire purchase and conditional sale agreements. The Act has special provisions for these contracts if the consumer terminates rather than settles early.
If you wish to pay off the balance owing before the agreement is due to end. You should give London & Surrey Motor Finance notice of early or partial settlement. You must notify London & Surrey Motor Finance whether you wish to settle early in part or whether you wish to settle in full. The rebate does not apply to charges paid before the settlement date. This will include documentation fees and arrangement fees.
Under Section 97 of the Consumer Credit Act 1974, the borrower is entitled to know how much they have to pay in order to clear the debt. The request may be oral or in writing. There is no specified format or wording that should be used. The borrower should give the creditor enough details to enable them to identify the agreement, preferably including the agreement number. If notice is given in writing it should be headed "Request for early settlement figure". If you are up-to-date with your payments, we may provide a settlement figure over the telephone.
Loans are made up of the capital advanced, the interest, and fees charged. Depending on how many payments you have made, the settlement figure may well be higher than the original capital advance. Remember the rebate is on the interest outstanding, not the capital left to pay.
The settlement figure is for paying off all or part of the original loan. You are not entitled to a rebate on any charges incurred for late payment, non-payment or administration fees that have already been charged.
For further information relating to early settlement and the formula used, please see the following link: http://www.legislation.gov.uk/uksi/2004/1483/pdfs/uksi_20041483_en.pdf
Partial early settlement
If your credit agreement is covered by the Consumer Credit (EU Directive) Regulations 2010, you also have the right to settle part of the agreement early. This is a “Partial Early Settlement”. You are able to discharge part of your indebtedness at any time by giving notice of your intentions to London & Surrey Motor Finance Ltd. It is important that you advise the payment is intended to be a partial early settlement rather than an advance payment to benefit from any rebate.
If you have missed any payments and/or are in arrears, any payment you make as a partial early settlement will be first used to pay off the arrears and any interest accrued. The remainder will be viewed as the partial early settlement payment.
Borrowers who make a partial early settlement are also entitled to receive a rebate as well as when making a full settlement. You are entitled to request information from London & Surrey Motor Finance Ltd about the effect of making a partial settlement. The request only has to be fulfilled once payment has been made. London & Surrey Motor Finance does not have to meet any request for information about the effect of an intended or possible partial early settlement. The information must be provided within seven working days after the creditor has received the request, provided that payment has been received. The information that must be provided includes the amount of any rebate or compensation and the amount of the borrowers remaining indebtedness at the date of the statement. The information must be provided in writing but does not have to be in any particular format.
For further information relating to partial early settlement please see the following link: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/31836/10-1053-consumer-credit-directive-guidance.pdf
Right to withdraw
With our regulated consumer credit agreements you have a 14 day right to withdraw, you can do this within 14 days after signing. This is only a right to withdraw from the credit agreement and not the purchase of the vehicle. If you wish to withdraw, you need to contact London & Surrey Motor Finance Ltd and a figure will be calculated on a daily rate of interest. You will have to pay back the amount borrowed along with any interest that has accrued up to the point at which you ask for your right to withdraw. London & Surrey Motor Finance Ltd must then receive the payment within 30 days from you asking for your right to withdraw.
Please be aware where the amount of credit exceeds £60,260 the agreement cannot be cancelled.