Withdraw from Audi finance
Discussion
Hi All,
I have read loads of threads on this and the general theme is it can be done but just want to check.
I am about to buy a used Audi A4.
I will receive a 'finance deposit allowance' of £500, 1 'major service' and 1 'inspection service free with Audi finance hire purchase'
I have written this word for word as shown on the order form.
1, If I 'Withdraw' within 14 days of signing the finance agreement will I have to pay back the £500 allowance and lose the servicing?
2, Should I make 1 payment and then 'Settle' the finance to keep the allowance and servicing?
Thank you for reading
I have read loads of threads on this and the general theme is it can be done but just want to check.
I am about to buy a used Audi A4.
I will receive a 'finance deposit allowance' of £500, 1 'major service' and 1 'inspection service free with Audi finance hire purchase'
I have written this word for word as shown on the order form.
1, If I 'Withdraw' within 14 days of signing the finance agreement will I have to pay back the £500 allowance and lose the servicing?
2, Should I make 1 payment and then 'Settle' the finance to keep the allowance and servicing?
Thank you for reading
Legally, you can settle in full at any stage of your finance agreement. The interest will be paid on a pro-rata basis so if you settle immidiately then you will pay very little, and the benefits of the deposit contribution and servicing will exceed any interest paid.
The '3 month' statement from the dealer is due to the fact that if the finance is settled before 3 monthly payments are made, the dealer will have any commision from Audi Finance withdrawn. The £500 deposit contribution and servicing will probably be a dealer specific offer (not always, but mostly.) and they are simply using the finance commision to subsidise the offer. So by settling immidiately the Dealer can potentially withdraw your servicing, as going into a finance agreement when you are knowingly going to immidiately settle is frowned upon to say the least.
If they knew that was your intention they would not provide you with the finance. However after you've made 3 monthly payments they don't care, the loss is with the finance company.
The '3 month' statement from the dealer is due to the fact that if the finance is settled before 3 monthly payments are made, the dealer will have any commision from Audi Finance withdrawn. The £500 deposit contribution and servicing will probably be a dealer specific offer (not always, but mostly.) and they are simply using the finance commision to subsidise the offer. So by settling immidiately the Dealer can potentially withdraw your servicing, as going into a finance agreement when you are knowingly going to immidiately settle is frowned upon to say the least.
If they knew that was your intention they would not provide you with the finance. However after you've made 3 monthly payments they don't care, the loss is with the finance company.
Don't 'Withdraw' but 'Settle' you can still do it within the 14 days, if you withdraw you will properly lose any benefit of taking the finance.
If the dealer has told you you have to make 3 months payments he's breacking the law and the FCA and VWFS would take a very dim view.
Source - Me, selling car cars for over 10 years SAF and FCA accredited.
If the dealer has told you you have to make 3 months payments he's breacking the law and the FCA and VWFS would take a very dim view.
Source - Me, selling car cars for over 10 years SAF and FCA accredited.
I would say that if the incentives are available only where the finance agreement is effected, you would be entitled to retain them if you settle the finance agreement early (which is your right).
If you withdraw from the contract using the cooling off period, you would not be entitled to retain the incentives as the finance agreement has in effect been nullified.
You could of course just ask the dealer ....
If you withdraw from the contract using the cooling off period, you would not be entitled to retain the incentives as the finance agreement has in effect been nullified.
You could of course just ask the dealer ....
PurpleMoonlight said:
I would say that if the incentives are available only where the finance agreement is effected, you would be entitled to retain them if you settle the finance agreement early (which is your right).
If you withdraw from the contract using the cooling off period, you would not be entitled to retain the incentives as the finance agreement has in effect been nullified.
That's entirely logical, but I've certainly seen reports on VW forums of people who have withdrawn from finance but kept the incentives. Who knows if that's "official" or just an over-sight though?If you withdraw from the contract using the cooling off period, you would not be entitled to retain the incentives as the finance agreement has in effect been nullified.
If you ask the dealer they're of course going to say you'll lose them.
Silverage said:
I did this with VW finance with a Golf I bought last year. Paid off the finance within a week and kept the incentives with no complaints from either VWFS or the dealer. Had the first of the two free services earlier this year with no problem.
Did you just settle early, or use the right to withdraw from (cancel) the agreement within 14 days.Sheepshanks said:
Silverage said:
I did this with VW finance with a Golf I bought last year. Paid off the finance within a week and kept the incentives with no complaints from either VWFS or the dealer. Had the first of the two free services earlier this year with no problem.
Did you just settle early, or use the right to withdraw from (cancel) the agreement within 14 days.Silverage said:
I did this with VW finance with a Golf I bought last year. Paid off the finance within a week and kept the incentives with no complaints from either VWFS or the dealer. Had the first of the two free services earlier this year with no problem.
I did exactly the same with VWFS. If you read the finance documentation it states a "right to withdrawal", so I called them up and exercised that right, and settled in full. The only interest I paid was the daily interest charge for how long the finance had been open and I kept all the dealer incentives. So i paid about £12 in interest for £800+ worth of extras.The dealers don't fully understand either, they told me I'd have to make 3 payments and pay an admin charge of £130 as they don't know the in's and out's of their own product.
Its a great loophole!
Edited by *Badger* on Tuesday 8th July 09:37
To add to the above, taken direct from Audi's website (All the VW Group use VWFS).
Agreement under 14 days old?
If your agreement was set up within the last 14 days you may have the right to withdraw. Alternatively, you can request a settlement quote which details all outstanding money due in order to settle your finance agreement with us (this option is not available to Finance Lease customers).
Right of Withdrawal
Under the Consumer Credit Directive you are within your right to withdraw from your finance agreement but not the vehicle purchase without giving us any reason if:
(1) the credit that you take out is for £60,260 or less
(2) you have a regulated Hire Purchase, Lease Purchase or Solutions finance agreement and,
(3) you notify us verbally, or in writing, that you wish to withdraw within 14 days of setting up your credit agreement. Contact us
Please note, once notification to withdraw has been requested it will be processed immediately. You cannot then change your mind and reverse the contract.
Agreement under 14 days old?
If your agreement was set up within the last 14 days you may have the right to withdraw. Alternatively, you can request a settlement quote which details all outstanding money due in order to settle your finance agreement with us (this option is not available to Finance Lease customers).
Right of Withdrawal
Under the Consumer Credit Directive you are within your right to withdraw from your finance agreement but not the vehicle purchase without giving us any reason if:
(1) the credit that you take out is for £60,260 or less
(2) you have a regulated Hire Purchase, Lease Purchase or Solutions finance agreement and,
(3) you notify us verbally, or in writing, that you wish to withdraw within 14 days of setting up your credit agreement. Contact us
Please note, once notification to withdraw has been requested it will be processed immediately. You cannot then change your mind and reverse the contract.
It seems incredible on the deals where there's a big deposit contribution that that don't come after people to pay that back if they withdraw from (rather than settle) the finance.
I did see a comment in another thread that for the servicing offers, Toyota have starting issuing vouchers just before the service is due and they'll only do it if the finance deal is still in place.
I did see a comment in another thread that for the servicing offers, Toyota have starting issuing vouchers just before the service is due and they'll only do it if the finance deal is still in place.
I guess they would if you asked them. I didn't ask them at the time. Of course they have no way to get the deposit contribution back even if they wanted to. I guess they could withdraw the servicing offer, but they don't, or at least they didn't.
I can't imagine many customers go down this route so it looks like they just write off the cost of these offers for the ones that do.
I can't imagine many customers go down this route so it looks like they just write off the cost of these offers for the ones that do.
Silverage said:
I guess they would if you asked them. I didn't ask them at the time. Of course they have no way to get the deposit contribution back even if they wanted to. I guess they could withdraw the servicing offer, but they don't, or at least they didn't.
I can't imagine many customers go down this route so it looks like they just write off the cost of these offers for the ones that do.
You're using your legal right to withdraw from the whole finance deal as if it never existed, so it's pretty amazing that they don't add back in the deposit contribution to the total that you have to pay.I can't imagine many customers go down this route so it looks like they just write off the cost of these offers for the ones that do.
Maybe there's some quirk in the Consumer Credit Act that prevents this?
OK, to bring this thread up to date.
I asked my dealer! Yes, that's right I asked their finance guy straight out what would happen, would I lose the servicing and would I have to pay back the incentive. His reply was 'no' I keep the servicing and the deposit incentive. He actually advised me that even if I didn't withdraw, that if possible, I should end the agreement early!! Bit surprised by his open and matter of fact attitude but perhaps it's the law and he has to.
So, I rang Audi/VW finance and I asked them the same question and received the same response. The servicing and deposit contribution are nothing to do with the finance agreement. They gave me a 'withdraw' figure and I paid it straight away.
I guess the only thing I might lose is 'goodwill' from the dealer. In my experience that doesn't exist so I'm not overly concerned by that.
I asked my dealer! Yes, that's right I asked their finance guy straight out what would happen, would I lose the servicing and would I have to pay back the incentive. His reply was 'no' I keep the servicing and the deposit incentive. He actually advised me that even if I didn't withdraw, that if possible, I should end the agreement early!! Bit surprised by his open and matter of fact attitude but perhaps it's the law and he has to.
So, I rang Audi/VW finance and I asked them the same question and received the same response. The servicing and deposit contribution are nothing to do with the finance agreement. They gave me a 'withdraw' figure and I paid it straight away.
I guess the only thing I might lose is 'goodwill' from the dealer. In my experience that doesn't exist so I'm not overly concerned by that.
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