Cancelling finance after new car deposit contribution.
Discussion
It appears that some new cars are being offered at artificially low prices by offering a deposit contribution, on finance, which can be up to £1000 so it can represent a significant saving. For example, Suzuki are offering a deposit contribution on the Swift and Kia/Hyundai on some of their small cars.
Now, in a nudge nudge way, salesmen are suggesting that the finance be taken out, so you get the deposit contribution and then you cancel within the 14 days or, if that is not correct, make a payment then pay it off and effectively pay any admin fee that arises.
It's a conundrum because i don't like doing things like that (not leat because it's a PITA) but, equally, would be irked if someone who can't afford to pay up front, gets a car a grand cheaper than me.
So, has anybody done this and, if so, what was the process like?
Now, in a nudge nudge way, salesmen are suggesting that the finance be taken out, so you get the deposit contribution and then you cancel within the 14 days or, if that is not correct, make a payment then pay it off and effectively pay any admin fee that arises.
It's a conundrum because i don't like doing things like that (not leat because it's a PITA) but, equally, would be irked if someone who can't afford to pay up front, gets a car a grand cheaper than me.
So, has anybody done this and, if so, what was the process like?
We bought a Polo for Mrs FB, there was an offer for 3 years free servicing if we took out a PCP agreement. The sales guy told us we'd need to pay it for at least 3 months to keep the offer. We settled it within a week using the right to withdraw clause and kept the free servicing offer. He only wanted us to make 3 payments so he got his finance commission.
valiant said:
Common practice but check your docs for any potential clawbacks (although I doubt there will be any)
Yep, there will likely be a clause in the financed documentation stating that you have to also pay any deposit contributions, however many manufacturers don't ask for it, but it is there if they change their policy which I have been told may well happen:[i]12.2 You have the right to withdraw from this Agreement in
accordance with the rights set out under the heading "Right of
Withdrawal" on page 2. If you wish to do so, you must repay
the amount set out in this section together with any [other
allowances we have made in relation to this Agreement,
including, without limitation, any finance deposit allowance or
contribution and/or any other sums or allowances together
with interest within 30 days beginning from the day after you
provide us with notice that you wish to withdraw.[/i]
I don't know what effect time period has, but I do know that when I settled my BMW PCP recently at just over the half way point, there was no mention of clawing back any of the £3,500 deposit contribution they'd put in. The settlement calculation was pretty straightforward, and consisted of the remaining instalments plus the GFV (balloon), minus a rebate for the interest for the remaining period. Settled by bank transfer, and got an acknowledgment and "no further obligation" letter through the post a week later. No issues at all.
Fast Bug said:
We bought a Polo for Mrs FB, there was an offer for 3 years free servicing if we took out a PCP agreement. The sales guy told us we'd need to pay it for at least 3 months to keep the offer. We settled it within a week using the right to withdraw clause and kept the free servicing offer. He only wanted us to make 3 payments so he got his finance commission.
Paid my Wife's Polo off after about a month....no claw back on deposit or servicingPaid my Karoq off after 4 days....no issues re deposit or servicing
33q said:
Fast Bug said:
We bought a Polo for Mrs FB, there was an offer for 3 years free servicing if we took out a PCP agreement. The sales guy told us we'd need to pay it for at least 3 months to keep the offer. We settled it within a week using the right to withdraw clause and kept the free servicing offer. He only wanted us to make 3 payments so he got his finance commission.
Paid my Wife's Polo off after about a month....no claw back on deposit or servicingPaid my Karoq off after 4 days....no issues re deposit or servicing
Both my BMW and SWMBO's Mini were done like that.
Went through the finance, picked the car(s) up.
Phoned BMW finance within a week or so and paid off the outstanding amount.
Got charged an Admin fee on the BMW which I think was around £1.50, which I certainly wasn't going to argue about! Both times done painlessly and with no questions asked.
Went through the finance, picked the car(s) up.
Phoned BMW finance within a week or so and paid off the outstanding amount.
Got charged an Admin fee on the BMW which I think was around £1.50, which I certainly wasn't going to argue about! Both times done painlessly and with no questions asked.
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