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Fixed-Sum Loan Agreement regulated by the Consumer Credit Act 1974 Key Financial Information: Amount of credit (Goods) £20961.43 (A) Total amount payable (Goods) £28729.20 (C) Amount of Credit (Insurances / Warranty) £ 0.00 (B) Total amount payable (Insurances / Warranty) £ 0.00 (D) Total amount of Credit £20961.43 (A) + (B) Total amount payable £28729 (C) + (D) This is a 60 month agreement payable either by a first instalment of £600.07 (including Administration fee, if any) on 11/04/2010 followed by 58 monthly instalments of £455.07 payable on the same day of each month and a final instalment of £735.07 (including Administration Fee, if any) on 11/03/2015

Other Financial Information: Description: Goods

HONDA CIVIC NEG EQUITY

Cash Price £15999.00 Cash Price £ 5962.43 Cash Price Cash Price Other insurance / Warranty Cash Price £ 0.00 Payment Protection Insurance Cash Price £ 0.00 Total Cash Price £21961.43 Administration Fee £145.00 (E) Interest Charge £6342.77 (F) Total charge for credit £6767.77 (E) + (F) Deposit £1000.00 Option to Purchase Fee £280.00

VAT Treatment The traditional method of accommodating negative equity in a part exchange has been to increase the cash price of the car you are selling, so that you can overvalue the part exchange. This increases your VAT liability on the sold car and inflates the balance funded, making it more difficult for a finance company to accept. Accommodating the negative equity by invoicing it separately reduces the VAT payable and makes it easier to place the main funding of the vehicle.

If Mann Island Finance accommodate the negative equity, we must also transact the finance on the new vehicle. This can be done by providing a top up to the main finance contract or a composite loan covering the new car and the negative equity on the part exchange.

Negative Equity Example Latest 241110  

Accommodating the negative equity by invoicing it separately reduces the VAT payable and makes it easier to place the main funding of the ve...

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