PCP - right to withdraw within 14 day and interest owed?

[stabilio]

If i buy a new car on PCP and want to pay the balance off in full within the 14 day 'right to withdraw' period', how does it work with the interest?
For example, a £60k car could work out to £70k with in the interest on the order sheet on a PCP but the small print says this:

"If you withdraw from the agreement you should note that:
If we have paid the amount of credit on your behalf (by acquiring the goods), you must repay this amount (or any
lower amount if you have made any repayments) together with interest payable on that amount to us within 30
days, beginning on the day after you give us your notice of withdrawal. Interest will be charged on the amount of
credit at £2.30 per day beginning on the date when the amount of credit was provided and ending when the credit
and accrued daily interest is repaid".

So, does this mean that I would just need to pay the list price of £60k in full (within the 14 days right to withdraw' period) plus the £2.30 interest per day on top - and not the full £70k with all the interest added on from the full PCP term?

[jjr1]

You will pay just the £2.30 per day plus the £60k.

Make sure you say you wish to 'withdraw from the agreement' not 'settle' or any other term. The right to withdraw within 14 days is a completely different way of closing the agreement. I have done it numerous times in order to take advantage of discounts or other incentives that salesmen have offered in order to take out the finance.

[J1990]

jjr1 said:

You will pay just the £2.30 per day plus the £60k.

Make sure you say you wish to 'withdraw from the agreement' not 'settle' or any other term. The right to withdraw within 14 days is a completely different way of closing the agreement. I have done it numerous times in order to take advantage of discounts or other incentives that salesmen have offered in order to take out the finance.

This^

Quite often if you instead state you wish to 'settle' then there's a charge of 30days interest or the current month's repayment + 30days interest on the balance.

[stabilio]

Thanks both of you

[g40steve]

I have a ST3 arriving Friday via DTD, price including discounts & options & finance contribution is 24k, the price if I pay the monthlies & balloon is circ £27k+.
Can I contact the finance company Friday & ‘withdraw from the agreement’
& pay the balance of 19k after my deposit which they already have?

[Niguy]

g40steve said:

I have a ST3 arriving Friday via DTD, price including discounts & options & finance contribution is 24k, the price if I pay the monthlies & balloon is circ £27k+.
Can I contact the finance company Friday & ‘withdraw from the agreement’
& pay the balance of 19k after my deposit which they already have?

If within 14 days of the commencement of the agreement yes.

[g40steve]

Niguy said:

If within 14 days of the commencement of the agreement yes.

Cheers, saved me a good chunk

[Mark V GTD]

stabilio said:

So, does this mean that I would just need to pay the list price of £60k in full (within the 14 days right to withdraw' period) plus the £2.30 interest per day on top - and not the full £70k with all the interest added on from the full PCP term?

Just to be clear - unlike a PCH agreement (leasing), with a PCP you can terminate the agreement at any time by requesting a settlement figure from the finance company. The settlement figure will be less than the total amount owed ( and quite a lot less in the early months) as you will not pay the majority of the interest that you would have done if the agreement went full term.

Withdrawing from the agreement within first 14 days means you will only pay the interest up to the day of withdrawal.

[Sheepshanks]

g40steve said:

... & finance contribution

Been discussed before but apparently some agreements do have a clause that they reserve the right to cancel any finance contribution, although in practice it's never enforced.

It seems a bit of a grey area - if you Withdraw it's supposed to be like the finance never existed in the first place. I've done it with VWFS and there was no comment about the £2750 contribution, but, bearing in mind the 'like it never existed' part I was surprised to be charged daily interest. Not upset about it, as it was £30 - just surprised.

[AlwynMike]

Whilst searching for new cars using this "trick", I always mention it to the Sales chap. Some won't do it, so I walk away - usual excuse is that the Dealer won't get the finance kick back. Others are quite happy to deal.

[Sheepshanks]

AlwynMike said:

Whilst searching for new cars using this "trick", I always mention it to the Sales chap. Some won't do it, so I walk away - usual excuse is that the Dealer won't get the finance kick back. Others are quite happy to deal.

The first I heard of doing this was quite a few years from a Toyota car salesman - he said they're pushed to get people into PCP using the contribution as many people say they're going to cancel it, then get used to the monthly payments and never get around to doing it.

However the general drill is not to tell the sales guy!

[Mark V GTD]

The trick is absolutely not mention it to the sales person. Just sign up to the finance and withdraw a few days later.

[Dan W.]

Mark V GTD said:

The trick is absolutely not mention it to the sales person. Just sign up to the finance and withdraw a few days later.

In general sales people dont care if you cancel the finance. Most of these pcp deals with contributions dont pay the dealership much on finance anyway.

We just want customers to buy the car so finance always comes secondary, We often get customers to take the finance and tell them to pay it off if there are deposit contributions

[Sheepshanks]

Dan W. said:

In general sales people dont care if you cancel the finance. Most of these pcp deals with contributions dont pay the dealership much on finance anyway.

We just want customers to buy the car so finance always comes secondary, We often get customers to take the finance and tell them to pay it off if there are deposit contributions

I'd have said finance (and other add-ons) was 99% of the focus (no pun intended) of the sales guys on the last couple of cars I've bought new. I literally got up and walked out of our local VW dealer as I couldn't get a straight answer out of them beyond the monthly payment - as I was intending to pay it off it was obviously vital that I knew all the numbers.

[Dan W.]

Sheepshanks said:

Dan W. said:

In general sales people dont care if you cancel the finance. Most of these pcp deals with contributions dont pay the dealership much on finance anyway.

We just want customers to buy the car so finance always comes secondary, We often get customers to take the finance and tell them to pay it off if there are deposit contributions

I'd have said finance (and other add-ons) was 99% of the focus (no pun intended) of the sales guys on the last couple of cars I've bought new. I literally got up and walked out of our local VW dealer as I couldn't get a straight answer out of them beyond the monthly payment - as I was intending to pay it off it was obviously vital that I knew all the numbers.

Some main companies still run their business like its the 1990's cloak and dagger about pricing and apr its usually the managers who run the place like that, Most salesmen in those places cant give answers as they dont do the figures they just present whats given to them.

We Have a garage near us who still operates this way, Salesman has to gain commitment from customer to say they will buy, salesman runs into the office, manager puts deal together, salesman runs back to customer lol.

we often have people come to us as they could not get a straight answer and were sick of the back and forth.

Personally I get 20% of any finance commission earned, on those pcp deals with deposit contributions we earn £100 per case so for £20 to me i am not fussed if a customer pays it off or not so we actively encourage customers to pay off.

Now non deposit contribution deals yes they can earn decent money so i could see salesmen pushing that

[Mark V GTD]

Dan W. said:

In general sales people dont care if you cancel the finance.

Hey Dan - I agree - but I just don't see any advantage in divulging my intention to cancel it at the time of the purchase!

[Dan W.]

Mark V GTD said:

Dan W. said:

In general sales people dont care if you cancel the finance.

Hey Dan - I agree - but I just don't see any advantage in divulging my intention to cancel it at the time of the purchase!

Fair enough i understand

[g40steve]

g40steve said:

I have a ST3 arriving Friday via DTD, price including discounts & options & finance contribution is 24k, the price if I pay the monthlies & balloon is circ £27k+.
Can I contact the finance company Friday & ‘withdraw from the agreement’
& pay the balance of 19k after my deposit which they already have?

Just checked the paperwork & mines Fords Options PCP, if that helps.

Just didn’t want to get caught paying all the finance interest off!

[g40steve]

Car folks what’s GuardX protection?

[Dan W.]

g40steve said:

Car folks what’s GuardX protection?

Paint & Fabric protection, lots of diff ones to choose from, Supaguard, gen3