Auto loan "adjustments" are changing the equity

Jesse Simpson

Auto loan in Quicken. I occasionally pay more on principal. Quicken puts in "adjustments" which change the balance of the loan but are incorrect. I have no matching transactions to these "adjustments". The most recent "adjustment" is over $5,000.

Tom Young

Is this loan a "manual" loan, i.e., it has a register you can look at, payments you make out of the checking Account are immediately posted to the loan register, or is this a "downloading" loan where no register is available and changes to the loan's balance are only recorded when the financial institution downloads the information?

It sounds to me like you DO have a register that you can look at if you're seeing something called an "adjustment" in the Account, and it sounds like the entry is self-referential, i.e., the "Category" used is the name of the Account itself, surrounded by square brackets.

There's not much to go on here and it's not clear why the occasional extra principal payments aren't matched to the "adjustments."  Can you provide a screenshot that shows more clearly what's going on?

UKR

BTW, how do you make this extra principal payment? As a separate payment, e.g., a separate check you mail, independent of the monthly regular payment? Or do you send the extra amount in together with the monthly regular payment?

And how do you record these payments in Quicken? Can you show us an example?

Jesse Simpson

Here are a couple screenshots. These "ADJ." have never shown up before on my various loans over the years. I pay Honda with autopay and sometimes send money on principal. I enter all payments manually. I did connect Honda to Quicken when I saw that the Loan Balance on Quicken did not match that of Honda website. Now the Quicken balance is several thousand $ off.

Tom Young

Unfortunately you really didn't answer the questions asked, but I'm pretty certain you're running this as a "downloading" loan. 

Honda Financial Services (assumed lender) only connects to loan Accounts in Quicken via Express Web Connect, a pretty unreliable downloading method, particularly when it comes to loans.  What that means is that entries you make in your Quicken checking Account to affect the loan's principal don't directly affect the loan's principle in Quicken.  What affects the loan's principle in Quicken is a download from HFS after they process your payment.  You'd think that should work "just fine", but EWC is not as tightly controlled in the interchange of information between the financial institution and Quicken so I'm guessing some sort of miscommunication between the two is resulting in what you're seeing.

You said that when you saw that Quicken and Honda's website had different loan balances, (when you were running the loan Account as a manual Account, presumably), that prompted the you to connect the Account to Honda.  For an auto loan it's not at all uncommon to have differences between Quicken and the financial institution as Quicken is largely incapable of computing accurately the split between principal and interest as typical auto loans don't really "behave" exactly like a regular amortizing mortgage.  It's always been this way - differences of a dollar or so - and the advice has generally been to just go in and adjust things in Quicken when that happens.

If my assumption is correct I'd suggest switching back to a manual, non-downloading loan, go into the loan's register to get Quicken in line with Honda's number, and go with that.

Jesse Simpson

Tom- I guess I don't understand you. I enter all transactions manually. Looking at the screenshots, you can see the "ADJ" entries which are placed by either Quicken or Honda. It doesn't make sense for it to be Honda as their website only shows my payments with no adjustments. As the adjustments are both add (+) or neg (-), it would seem to me to come from Quicken.

Tom Young

"Tom- I guess I don't understand you. I enter all transactions manually."

I assume that you're referring to the payment information you enter manually into your checking Account.

IF the loan Account is not a downloading information from the lender, THEN the instant you finish entering the payment information in the checking Account, the loan balance is changed.

IF the loan Account is downloading information from the lender, THEN the instant you finish entering the payment information in the checking Account, the loan balance does not change.  The loan balance will change only after the lender processes the payment and then sends that information to the loan Account.

My *speculation* is that you do have the loan Account downloading information from Honda using the EWC method.  You should be able to determine this by looking at the Online Services tab of the Account Details.  Since EWC just doesn't work as well as Direct Connect, (I guess the financial community as a whole is attempting to make EWC more reliable by "standardizing" the process, but they're not there yet), it's not uncommon to have problems with the downloads.  Indeed, a fairly common complaint in here, associated with downloading loans, is "Quicken is showing my loan is paid off, but it's not!"

So my *speculation* is that you used to have the loan Account as a manual Account.  Then, because auto loans just don't behave exactly like mortgage loans, you noticed differences between Quicken and Honda balances.  In response to that you made the loan a downloading loan, and now are encountering some EWC funkiness that's creating seemingly random changes in the loan's balance.

IF I've got that all right, (and I may not), THEN my suggestion is to convert that loan back to a manual loan and deal with the small differences piecemeal as they occur. 

Jesse Simpson

Tom- How do I disconnect the EWC? I can't seem to figure that out. Also, how do I change the amounts in a transaction list to correct the screwed-up loan balance due to the adjustments?

Tom Young

I've never had a downloading loan but I've had plenty of other Accounts with the ability to download and for those, if I wanted to discconect I'd simply go to the Online Services tab and click on "Deactivate.  I assume that a loan Account would work accordingly.

Somebody posted this:

https://community.quicken.com/discussion/7164936/faq-how-do-i-convert-a-loan-account-that-automatically-downloads-transactions-to-a-manual-entry-sc

if simply deactivating doesn't work.

Once you regain control of the loan register there's various ways of getting things right. 

The approach I'd take, I think is to go back to all the payments in the checking Account and, guided by the history of the loan that I'd think Honda would have available to you, change each and every payment to comport with Honda's schedule.  The reason a checking Account entry for a downloading loan doesn't affect the loan balance in Quicken is that the "principal" portion of the payment isn't pointing to the loan Account, it's just using a Category (expense) called "Loan Principal" or something along those lines.  So be sure the edited payments are pointing to the loan Account, not that Category.  Doing the adjustment this way should get everything - principal and interest - properly stated.

Another approach if you don't care about the "history" but just want to get the loan balance correctly stated as of "today" is to make a correcting entry in the loan register - an increase or a decrease - and use as the "Category" for that entry the name of the loan Account surrounded by square brackets: ["Loan Account Name"].  That's a "magical" entry that changes the balance of the Account without affecting any other Account (that you can see) or Category.