Mini finance - paying off immediately

[JetskiJezz]

I have read on a couple of older threads about the idea of taking out finance, car in order to get the dealer contribution and then paying off immediately.

Has anyone on here got any experience of this with Mini finance?

I'm trying to help my mum buy a mini convertible, she has found one that she wants as a preregistered, but new car and the dealer is suggesting that there could be a deposit contribution of £1300 if she took out some form of finance.
She doesn't need to, nor want to finance the purchase as she just doesn't like the idea of having a monthly payment.

The dealer is the one that has suggested that she doesn't need to keep the finance in place and pay it off straight away.

[Dan W.]

JetskiJezz said:

I have read on a couple of older threads about the idea of taking out finance, car in order to get the dealer contribution and then paying off immediately.

Has anyone on here got any experience of this with Mini finance?

I'm trying to help my mum buy a mini convertible, she has found one that she wants as a preregistered, but new car and the dealer is suggesting that there could be a deposit contribution of £1300 if she took out some form of finance.
She doesn't need to, nor want to finance the purchase as she just doesn't like the idea of having a monthly payment.

The dealer is the one that has suggested that she doesn't need to keep the finance in place and pay it off straight away.

Pretty much that yes, just take it out and pay it off immediately.

just check there would be no fees for doing so, I have worked at Ford and Citroen, we used to get customers doing this also.

[AlwynMike]

I did that with my BMW last year.

My logic was why should I pay the same money for a 6 month old car when I could have a new one, specced how I wanted it.
Had a £4.5k BMW contribution. £8k minimum finance over 4 years (the rate was 2.9%).
Final payment fee of £1 and some interest of 20p I think.

Whatever the salesman says, you have a statutory 2 week cooling off period, so the finance company can't refuse to let you pay it off within that time.

[Camelot1971]

AlwynMike said:

Whatever the salesman says, you have a statutory 2 week cooling off period, so the finance company can't refuse to let you pay it off within that time.

That's withdrawing from finance, not paying off the finance.

You can withdraw within 14 days but if you do that you might not be entitled to any incentives.

You can pay off the finance any time you like - there is a formula finance companies have to use for paying off a loan. If you pay off the loan you should be able to keep any incentive.

[Sheepshanks]

JetskiJezz said:

The dealer is the one that has suggested that she doesn't need to keep the finance in place and pay it off straight away.

Watch the terminology ie "pay it off" and the timing. You have 14 days from signing (which you often do a few days before collecting the car) the docs to Withdraw. If you Withdraw you don't pay any fees (if there were any) and you pay interest at a daily rate until the day you tell the finance provider you're Withdrawing. So it'll be a few (like £20) quid. Some manufacturers do reserve the right to recover deposit contributions (after all, it's like the deal never existed) but it's unheard of for them to actually do that. I had £2750 off VW recently.

After 14 days you're Settling. You do pay any fees and there's normally 2 months of interest to pay (a months notice and a months penalty) - so perhaps a couple of hundred quid. If you Settle you definitely keep any contribution etc.

[JetskiJezz]

DDg said:

This is just the post I was about to make - thanks OP.

I’m getting offers of 13.5% off list if I take out finance but only 6.5% for a cash sale (MINI dealers). I’d like the former discount but don’t want to finance (never done so before - old school).

If I’m upfront with the dealer about my intention to pay it off immediately will they be bothered, or does simply signing up to finance gives them their bonus with no clawback?

Thanks everyone for their comments so far, it does seem that everyone is concluding the same thing.

I just put the phone down to the dealer, he's not offering a percentage, but a fixed £1300 contribution towards the deposit. Again I've been upfront with him and said that I would be planning to pay the finance of within just a couple of days, or essentially as early as I possibly could and again he didn't seem to be bothered that I was doing this.

My problem is that I want them to confirm somewhere in writing that there isn't a penalty for me to do so. I'm hoping someone will see this thread and confirm that they have actually done what is being suggested without any penalties.

[Mo28]

Have you been given the contract? Is there nothing in the contract in regards to paying of the finance straight away. For the car we purchased off Mercedes, we were told to give it 6 months before paying off the finance as the salesman wouldn't get his bonus which we were happy to do as there was a 6-7k discount off list.

[JetskiJezz]

Mo28 said:

Have you been given the contract? Is there nothing in the contract in regards to paying of the finance straight away. For the car we purchased off Mercedes, we were told to give it 6 months before paying off the finance as the salesman wouldn't get his bonus which we were happy to do as there was a 6-7k discount off list.

No, I haven't agreed to anything yet so haven't been sent a contract. I'm still in the process of negotiating the purchase price and I'm only going to go down the route of the finance if it can be paid off within the first week or so without incurring any penalties.
I am in the process of asking the direct question to the dealer to which I'm hoping you can then give me an answer in writing.

[tickedon]

JetskiJezz said:

No, I haven't agreed to anything yet so haven't been sent a contract. I'm still in the process of negotiating the purchase price and I'm only going to go down the route of the finance if it can be paid off within the first week or so without incurring any penalties.
I am in the process of asking the direct question to the dealer to which I'm hoping you can then give me an answer in writing.

It’s a legal requirement for consumer credit. Google paying off finance early (two month interest penalty) and withdrawing (within 14 days, interest calculated daily) if you want the full chapter and verse.

[AlwynMike]

JetskiJezz said:

I'm hoping someone will see this thread and confirm that they have actually done what is being suggested without any penalties.

See my post above.

No penalty.
Collected car on a Wednesday.
Phoned up BMW finance on Monday and said I'd like to pay the finance off.
No quibble - or even questions.
One pound something on top of the £8k borrowed.
Salesman well aware of my intentions about finance.
TBH, although I don't do borrowing, the £8k at 2.9% wouldnt have been a deal breaker considering the manufacturer contribution.

Do It!

[JetskiJezz]

I just wanted to update firstly to say thank you for the comments from everyone contributed.

We ultimately purchased the Mini convertible through the mini dealer and took advantage of the £1300 "contribution" before doing so I carefully read through the paperwork and there were no comments or requests that the contribution should be repaid if we withdrew from the finance.

We collected the car on Sunday, The finance was for £10,100 then four days later I phoned Mini finance and settle the full amount plus a minor charge of 85p per day which they calculated as their interest ( this amount was clearly noted within the contract).

I can confirm that we were not asked in any way to return or pay the £1300 contribution so we did effectively get a further £1300 off the purchase price of the car.

I was open and honest with the dealer from the beginning, in fact it was his initial suggestion, he was well aware that we were planning to pay the finance within just a couple of days and didn't have any issue whatsoever. So if anyone out there is thinking of doing the same it definitely works for me.

[Dan W.]

good to hear, we often tell customers about deposit contributions and we get the old I wouldn't trust a salesman line.


Enjoy your car