Renault PCP and Cancel

[dozen]

I am in process of buying a used car from Renault. PCP finance has a 10% interest rate but the dealer is willing to throw in a £1k deposit contribution.

I know that I can go ahead with the PCP then pay it back immediately, but the dealer is suggesting that Renault will "claw back" the £1k.

Has anyone done this with Renault and did they have to pay the dealer contribution back??

How would they even go about extracting the money from me?

[Kuwahara]

Is the finance actually a part of Renault I doubt it is , never heard of this happening and if it’s not directly connected to Renault I’m not sure how they could it would just be another transaction.

[HTP99]

There is a £1k deposit contribution if you finance an approved used Renault via Mobilize (Renault finance}, you can withdraw within 14 days of the agreement being set up, you'll pay a few days interest and likely still benefit from the £1k deposit contribution, however it is there in the T's & C's that you'll have to pay it back, it isn't asked for or enforced, it will likely be one day though, especially as the FCA monitor the amount of agreements with deposit contributions which are withdrawn from as many dealers actively encourage doing so, from an FCA perspective this can be classed as miselling of a finance agreement and will likely be clamped down on at some point.

[dozen]

Thanks for the advice.

I will go ahead and withdraw, it sounds like they won’t want the money back.

I’ll update this post to let you know how I get on.

[Roger Irrelevant]

Worth bearing in mind that as well as the right to withdraw from a Consumer Credit Act regulated agreement (which you need to do within 14 days of the agreement being put in place) you also have the right to settle it at any time. So in the unlikely event that Renault do say that they'll claw back the £1k if you attempt to withdraw (as they are entitled to do), make it very clear that you'd like to settle the finance instead. They can still charge you two months' interest, but that's going to be a lot less than the £1k. I suspect it's because there is the right to settle (where no claw back is allowed), that dealers tend not to exercise their rights of claw back on withdrawal - if they did they'd be taking advantage of customer's ignorance of the law in a pretty underhand way.

[Sheepshanks]

HTP99 said:

There is a £1k deposit contribution if you finance an approved used Renault via Mobilize (Renault finance}, you can withdraw within 14 days of the agreement being set up, you'll pay a few days interest and likely still benefit from the £1k deposit contribution, however it is there in the T's & C's that you'll have to pay it back, it isn't asked for or enforced, it will likely be one day though, especially as the FCA monitor the amount of agreements with deposit contributions which are withdrawn from as many dealers actively encourage doing so, from an FCA perspective this can be classed as miselling of a finance agreement and will likely be clamped down on at some point.

If you Withdraw, it's supposed to be like the finance never existed. So it does seem logical they could recover the contribution. However it's odd they can charge interest, even if it is only a few quid - there must be some basis for that being allowed.

It's very common with VWFS and sometimes the contributions can be several £K. Last time I did it (back end of 23) they un-nerved me a little by waiving the daily interest charge.

[griffter]

I took Renault finance a few years ago for the deposit contribution and a 2 year servicing deal. I paid off all but £100 of the finance to keep it in place for the servicing. I was paying just over a pound a month for the car! Another option if you want to avoid risking the £1000 claw back.

[dozen]

Little update:

Withdrew from the finance yesterday. Paid the balance plus about £10 in interest off via bank transfer.

The lady at the finance company said that Renault “may” ask for the deposit contribution back. I said I was fine with that.

In other news, the Clio Esprit Alpine is a really lovely little car. First French car I have ever owned.

[Roger Irrelevant]

Sheepshanks said:

If you Withdraw, it's supposed to be like the finance never existed. So it does seem logical they could recover the contribution. However it's odd they can charge interest, even if it is only a few quid - there must be some basis for that being allowed.

s.66A(9)(a) of the Consumer Credit Act:

"(9)Where the debtor withdraws from an agreement under this section—

(a)the debtor must repay to the creditor any credit provided and the interest accrued on it (at the rate provided for under the agreement)"