I can't think of a reason they wouldn't. Don't forget that most finance outside bank loans and the like operates according to the "rule of 78" that front-loads interest charges so if your calculatoms are pro-rata then you can expect a difference. The lender should tell you how they've calculated the figure though.

Using a spreadsheet, I calculated the daily rate of interest from the 5.77% pa specified in the agreement and then compound it daily - taking monthly payments into account.

The 5.77% is the actual rate - the APR is 6.1% as that has to include certain charges. I've used the actual rate of 5.77 and then added the specified charges.

My spreadsheet calculates the daily rate as the 365th root of 5.77% so that when compounded over the year it gives 5.77% - even using a simple pro-rata calculation to get the daily rate, ie 5.77% divided by 365 gets much closer to my figure than VW's.

This I why I need to see the breakdown and either challenge it or accept it's my error.

I have worked in finance for the last 30 years. The calulations are more complex than you think and interpeting the rules used is quite hard to reconcile. if your <£200 off then I call it a day.

But because I'm paying it off so early, £300>500 interest is quite a "lack of understanding" - that's excluding the initial acceptance fee and final purchase fee in both cases.

I have discussed this with VW Finance by phone and the difference might be explained by a then unallocated over-payment which has now been allocated - they've agreed to send an updated settlement quotation with a revised settlement date and breakdown of the interest payable.

Try this site

www.financecalcs.co.uk/Calcs/Settlement.php

Its worked for me when I have fed real figures into it.

Thanks - I tried to use that before but failed for some reason - but managed today, it gave figures very close to VW's.

Having tried using it with 0 months run, ie nothing paid off, it seems to pre-load the settlement with 2 months of interest which is close to the discrepancy I queried.

So I guess it's going to cost me more than I thought