Finance to Replace Major Warranty? Tri-party agreements
Discussion
Hi all,
I am being offered finance on a 30k 997 that I was planning to pay cash for, the finance guy is trying to tell me it's as good as a warranty, because if the engine goes bang an I don't have warranty, I can hand it back as not fit for purpose.
Is this true? Here is the finance guys explanation...
"The tri partite agreement refers to the three parties involved in making the finance purchase, the customer, dealer and finance company.
The protection for you ( all subject to legalities of course) is the fact that you are technically hiring the car from the finance company as they have purchased it from the dealer, should the car not be as described or unfit for purpose during the agreement and the dealer fail to rectify this( subject to agreement), you have comeback to go back to the company you are hiring it off ( finance company) and reject the vehicle as being unfit for purpose, this will in turn mean they will contact the supplying dealer and ask them for comment, if they do not get the answers they require the can i some cases sue the supplying dealer for breach of contract on your behalf because you have rejected them.
There are of course a few things you need to ensure, as i the car needs to be maintained in line with guidelines , all payments need to be meet ,etc, in other words, keep your end of the agreement.
This can of course go legal but the finance company will always apply for an court indemnity to cover them from the suppliers issues so 9.5 times out of 10 and with the threat of legal action the dealer helps out.
My biggest experience of this was when MG Rover went bust years ago and lots of people had finance agreements with Capital Bank( former employer) but had no dealer network to look after them, Capital Bank set aside a pot of money to ensure all manufacturer warranty claims were honoured on financed cars and any genuine problems were rectified, however can you imagine the conversation between the customer and his personal loan company up where he told them his Rover had broken down and there was no dealer he could turn too, he would be on his own."
I am being offered finance on a 30k 997 that I was planning to pay cash for, the finance guy is trying to tell me it's as good as a warranty, because if the engine goes bang an I don't have warranty, I can hand it back as not fit for purpose.
Is this true? Here is the finance guys explanation...
"The tri partite agreement refers to the three parties involved in making the finance purchase, the customer, dealer and finance company.
The protection for you ( all subject to legalities of course) is the fact that you are technically hiring the car from the finance company as they have purchased it from the dealer, should the car not be as described or unfit for purpose during the agreement and the dealer fail to rectify this( subject to agreement), you have comeback to go back to the company you are hiring it off ( finance company) and reject the vehicle as being unfit for purpose, this will in turn mean they will contact the supplying dealer and ask them for comment, if they do not get the answers they require the can i some cases sue the supplying dealer for breach of contract on your behalf because you have rejected them.
There are of course a few things you need to ensure, as i the car needs to be maintained in line with guidelines , all payments need to be meet ,etc, in other words, keep your end of the agreement.
This can of course go legal but the finance company will always apply for an court indemnity to cover them from the suppliers issues so 9.5 times out of 10 and with the threat of legal action the dealer helps out.
My biggest experience of this was when MG Rover went bust years ago and lots of people had finance agreements with Capital Bank( former employer) but had no dealer network to look after them, Capital Bank set aside a pot of money to ensure all manufacturer warranty claims were honoured on financed cars and any genuine problems were rectified, however can you imagine the conversation between the customer and his personal loan company up where he told them his Rover had broken down and there was no dealer he could turn too, he would be on his own."
No personal experience that I can offer, but sounds like a "wing and a prayer" promise to me with the finance company being able to exploit any number of "fine print" excuses not to pay up if the worst happens.
Save your cash on the finance charges / interest if you have the money to buy outright and put the savings towards a proper warranty would be what I would do
Save your cash on the finance charges / interest if you have the money to buy outright and put the savings towards a proper warranty would be what I would do
Edited by Moog72 on Wednesday 7th November 10:02
That explanation probably does wonders for the guy's finance sales. Technically he's right but imagine it from the lender's perspective: if a car has a major problem which cannot easily be proven to be attributable to the dealer they are likely to look into it but insist that the owner keeps making his payments (it's easier to chase a few hundred pounds a month than chase a dealer for a big bill, especially considering the dealer is someone they rely on for repeat business).
Thanks for the constructive comments, I was waiting for the first 'course he would say that!' which really isn't helpful...
Think you guys are right, I guess this would be different if it were brand new and I had a major issue, but I think trying to claim a 7/8 year old car as not fit for purpose if I had an issue would be pushing it.
Cheers all :-)
Think you guys are right, I guess this would be different if it were brand new and I had a major issue, but I think trying to claim a 7/8 year old car as not fit for purpose if I had an issue would be pushing it.
Cheers all :-)
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