Shafted by Blackhorse [title edited to reflect contents of thread]

[Mark_T]

You've got two separate agreements here, one with Tesla to buy the car for a set price, and from what you've said that hasn't changed.

The other is with Black Horse to finance the purchase, and it is that one that seems to have changed.

Not sure exactly where you are with regard to the signing of paperwork etc. but in general terms, there is no obligation to use Black Horse for your finance and you could substitute a different lender if you can find one quickly enough...

There should be a cooling-off period for the finance with Black Horse even if you've already signed everything.

Worth a quick look around to see if you can find a better deal, but to be honest, for £20 a month over 4 years I probably wouldn't put any more time into it myself.

 

[TM3PTN]

Presumably you received a pre-sale quote? I would expect you to find small print in there that confirms it is not a binding contract and subject to change blah blah blah.

That’s what I’m thinking. They’ll have something squirrelled away in the fine print to screw us over when we have entered into an agreement in good faith.

Not right.

 

[TM3PTN]

You've got two separate agreements here, one with Tesla to buy the car for a set price, and from what you've said that hasn't changed.

The other is with Black Horse to finance the purchase, and it is that one that seems to have changed.

Not sure exactly where you are with regard to the signing of paperwork etc. but in general terms, there is no obligation to use Black Horse for your finance and you could substitute a different lender if you can find one quickly enough...

There should be a cooling-off period for the finance with Black Horse even if you've already signed everything.

Worth a quick look around to see if you can find a better deal, but to be honest, for £20 a month over 4 years I probably wouldn't put any more time into it myself.

Thanks Mark.
Yeah that’s what I was thinking, but the fact that they have just dropped the residual by so much means that I barely have any equity left in the vehicle at the end of the term. But as I said before my plan is to refinance at the end of 4years (or just overpay). However, a lot can happen in 4years so the plan may change.

It’s just a shame because rather than really looking forward to picking up the car tomorrow I feel a bit deflated and indifferent.

But like I said, hopefully that will change once I get behind the wheel - still aiming for the silver lining

At the end of the day I am grateful to be in a position to be able to afford a high performance, high spec car at the age of 32 I shouldn’t whinge too much.

As always - thank you to you all for the moral support and guidance. This community is fantastic and I learn something new everyday on here

 

[GeorgeSymonds]

.... the fact that they have just dropped the residual by so much means that I barely have any equity left in the vehicle at the end of the term.

That doesn't make much sense

If you're looking at PCP then the car will be cheaper to buy at the end, and you're likely to have MORE equity in the car as the actual value of the car will be the same and the gap in your favour will be higher (of course if the car is in negative equity in the future then you're sunk anyway and the extra you have paid you lose)

ie car is 50k now
FGV was 25k
Actual value 27k in future -> equity in the car is 2k
FGV now 24k
Actual value 27k in future -> equity in the car is now 3k

 

[Imidogen]

This thread is concerning and if one finance company has done this, i am wondering how long when others follow.
I am (and so many others i am sure in this forum are) in a similar situation where in I am still waiting after signing the contract, been approved for finance etc. with a leasing company. It will be painful if my leasing provided does this now especially when I am so close (hopefully) to delivery.

I am hoping some law expert in this forum tell us that we as a consumer have some rights against this.

 

[Lasairfion]

That’s what I’m thinking. They’ll have something squirrelled away in the fine print to screw us over when we have entered into an agreement in good faith.

Not right.

They can't 'squirrel away' things in the fine print. Lord Denning's 'Red Hand Principle' is a pretty famous part of the law, which stated in Thornton vs Shoe Lane Parking that the more onerous the clause, the better notice of it needed to be given. Clauses that are hidden away can very easily be thrown out of a contract by the court.

Honestly, I'd speak to a solicitor about this. Most of them don't even charge for the initial consultation.

 

[DJP31]

the fact that they have just dropped the residual by so much means that I barely have any equity left in the vehicle at the end of the term.

I agree with @GeorgeSymonds above. The GFV quoted is purely a guess by the finance company on what they think the car will be worth at the end of the 4 years, based on the mileage quoted. It means nothing in the real world. You could argue it's better to have a low GFV, that way there's more chance the car has some value over and above the GFV - and that's your equity.

The higher the GFV - the lower the monthly payments and higher likelihood the car won't be worth it
The lower the GFV - the higher the monthly payments will be and a higher possibility the car will be worth more than the GFV

Yeah my plan is to keep the car in the family over 4years and refinance it when this agreement comes to an end

By reducing the GFV you now have less to find at the end for the refinancing, so it's not all bad news.

Some might argue that if you're intention is to keep the car long term then why not use HP / bank loan over e.g. 5 or 6 years. The overall interest costs may well be lower than PCP + future loan. There is some truth in that argument, but for my money I would stick with PCP as it gives you a get out clause after 4 years. The EV landscape is rapidly changing and who knows what it'll look like in 4 years. Tesla's service and treatment of customers has gone down hill rapidly and if that trend continues I'll be walking. Hand the car back and go elsewhere.

 

[browellm]

One other hidden benefit of PCP deals (unless they've changed since I last took one out), is that there is a clause saying you can hand back the car with no penalty half way through a contracted agreement, subject to agreed mileage restrictions. So, if you sign a 4 year deal, you can hand back and walk away after 2 years.

This isn't well advertised.

 

[DJP31]

They can't 'squirrel away' things in the fine print. Lord Denning's 'Red Hand Principle' is a pretty famous part of the law, which stated in Thornton vs Shoe Lane Parking that the more onerous the clause, the better notice of it needed to be given. Clauses that are hidden away can very easily be thrown out of a contract by the court.

Honestly, I'd speak to a solicitor about this. Most of them don't even charge for the initial consultation.

Here's an extract from a lease quote:

"I would like to accept this quotation and have read the terms and conditions below and at XXX. This quote is valid until 28th August 2019. Prices are subject to change without notice"

Pretty much every single finance/lease quote will contain this type of sentence/clause. Until you sign the agreement nothing is binding - on either side.

 

[browellm]

Here's an extract from a lease quote:

This quote is valid until 28th August 2019.

Prices are subject to change without notice"

These two statements appear to be wholly incompatible.

 

[JCremonini]

This thread is concerning and if one finance company has done this, i am wondering how long when others follow.
I am (and so many others i am sure in this forum are) in a similar situation where in I am still waiting after signing the contract, been approved for finance etc. with a leasing company. It will be painful if my leasing provided does this now especially when I am so close (hopefully) to delivery.

I am hoping some law expert in this forum tell us that we as a consumer have some rights against this.

If you have signed a leasing agreement then your lease company are bound by it. I assume , as you are so close to delivery , this was done some time ago. The OPs problem comes through the fact he has not signed anything - he has only received a quote ( which won’t be binding ).

 

[DJP31]

One other hidden benefit of PCP deals (unless they've changed since I last took one out), is that there is a clause saying you can hand back the car with no penalty half way through a contracted agreement, subject to agreed mileage restrictions. So, if you sign a 4 year deal, you can hand back and walk away after 2 years.

This isn't well advertised.

I'm afraid that is wrong. You can hand the car back once you have paid 50% of the total amount payable under the agreement. This is the price of the car plus the interest charge less your initial deposit and the total of the monthly payments you have made. Any excess mileage charges are also payable on a pro rata basis.

The actual date when you reach the 50% point varies, and largely depends on the size of the deposit and how big/small the GFV is.

 

[Imidogen]

If you have signed a leasing agreement then your lease company are bound by it. I assume , as you are so close to delivery , this was done some time ago. The OPs problem comes through the fact he has not signed anything - he has only received a quote ( which won’t be binding ).

Thanks for clarifying that.. saved me some anxious googling.. just want the keys (card) now and get this over with..

 

[DJP31]

These two statements appear to be wholly incompatible.

Yep, I completely agree. For clarity, it wasn't a Blackhorse extract, it was a lease deal from a well known provider in the EV market. We'd need to see the OP's finance quote but every quote I've ever seen isn't binding. Unusual for a reputable institution not to honour one though.

 

[ItsNotAboutTheMoney]

These two statements appear to be wholly incompatible.

1) They will honour the quote until a given date.
2) After that date, they can change the price, and they will not notify you of what the new price would be.

2 is a catch-all for "We won't do anything beyond what we've written above."

 

[Mark_T]

Thanks Mark.
Yeah that’s what I was thinking, but the fact that they have just dropped the residual by so much means that I barely have any equity left in the vehicle at the end of the term. But as I said before my plan is to refinance at the end of 4years (or just overpay). However, a lot can happen in 4years so the plan may change.

As others have said, that doesn't make any sense.

Can you put some numbers to this?

What was the GFV before the change and what is it now?

It can't have moved much if the monthly payment only went up by £20...

In general the lower the GFV the more chance that you will actually have equity in the car at the end of the contract.

For example, my PCP deal will never have any equity as the GFV was far too high (over 50% after 4 years). This is why HMRC insisted on changes recently.

 

[daviddavid]

I don't agree what happened. It is not right. I do struggle a little with the title of the post. My guess is Elon has no idea this is even happening. He is a shareholder, but there are many others. When things that are wrong get to his attention, usually he does the right thing. So in my mind, unless you have had direct communication with Elon on this subject and given him the opportunity to fix it, I would consider renaming the title of this post.

Either way, this is not right and should not happen IMHO.

 

[Mark_T]

I'm afraid that is wrong. You can hand the car back once you have paid 50% of the total amount payable under the agreement. This is the price of the car plus the interest charge less your initial deposit and the total of the monthly payments you have made. Any excess mileage charges are also payable on a pro rata basis.

The actual date when you reach the 50% point varies, and largely depends on the size of the deposit and how big/small the GFV is.

As an example, mine will pass the 50% point around 43 months into a 48 month agreement, due to the very high GFV.

 

[DJP31]

As an example, mine will pass the 50% point around 43 months into a 48 month agreement, due to the very high GFV.

Mine's 44 months, so very similar. That's a year from now and my man maths spreadsheet is already in play. The only definite is that I do not want to run my car out of warranty, so it will be going at the end of the 48 months - or very close to it.

 

[Mark_T]

I don't agree what happened. It is not right. I do struggle a little with the title of the post. My guess is Elon has no idea this is even happening. He is a shareholder, but there are many others. When things that are wrong get to his attention, usually he does the right thing. So in my mind, unless you have had direct communication with Elon on this subject and given him the opportunity to fix it, I would consider renaming the title of this post.

Either way, this is not right and should not happen IMHO.

What exactly do you think Tesla have done wrong?

This is an issue between the OP and Black Horse, not Tesla.

Tesla have introduced Black Horse as a lender, they are an intermediary, but they are not responsible for the terms of the loan.

A lease agreement is always signed before delivery so the rates get locked in. A PCP agreement is usually signed at the point where the car supplier is getting paid. Any quotation for PCP finance is typically clearly marked that it does not constitute an offer of credit, as it is frequently made before all of your the financial details are known, so it is subject to change up to the point where you actually want to pay for the car.

Similarly you are not bound to use any particular company to provide the PCP finance if you do not like their rates at the point you wish to proceed then find another one.