Settling new Car Finance straight after purchase?

[decadent]

Hi,
I'm buying a new car tomorrow and chose to take out the finance as it meant a deposit contribution and a free service package (VW finance).

I want to settle the finance as soon as possible and have read in various places:

1. Settle within 14 days and pay nothing put the amount you borrowed, i.e. no interest and no set up charges. Is that true, surely I'd have to pay say x days they are "lending" me the money?
2. Pay 99% of the finance off and leave a small balance remaining. This gets you out of Rule 78. What is Rule 78; reading suggests it's about an early repayment charge in interest balance of the amount outstanding?
3. Pay finance for 3 months and then clear it off (can't see the benefit).

What is the best course of action?

Cheers
Matt

[boxsternoob56]

ask the finance company in question? There is no reason for them to mislead you and just 'cos you are asking doesn't mean you will do it hence shouldn't jeopardise anything you get as part of the deal (and by speaking to them you would find out if it did)

[simoid]

So, er, you reckon we can all go to VW and get £30k cars for £29k or something?

[simoid]

boxsternoob56 said:

eh?

That was to the OP, is he thinking he can make a quick buck and VW don't have systems to stop thousands of people doing this?

[mrmr96]

simoid said:

boxsternoob56 said:

eh?

That was to the OP, is he thinking he can make a quick buck and VW don't have systems to stop thousands of people doing this?

If thousands of people paid £29k for a £30k list car, I'd imagine VW would be delighted.

[simoid]

mrmr96 said:

If thousands of people paid £29k for a £30k list car, I'd imagine VW would be delighted.

£29k for a car that would ordinarily not have been sold for <£30k

[boxsternoob56]

I doubt VWFS would be able to prevent anyone taking credit, getting a discount and then withdrawing it if repaid early as it would probably be deemed an unfair contract if you weren't able to repay a finance agreement(or were penalised) simply because the dealer had given a discount on the vehicle or other benefits.

I have a Consumer Credit Licence but only as a (ridiculously) necessary addition to my main line of business (mortgage broker) and it is simply because I sometimes talk to people about unsecured credit for instance when this may involve consolidation into a mortgage (I have an FCA licence too).

I am absolutely NO expert when it comes to the CCA but here are some links you may find useful to re-inforce the point I was trying to make...which is

ASK VWFS what the terms and conditions are, they have no right to withhold these from you, whatever deal is structured.

http://oft.gov.uk/about-the-oft/legal-powers/legal...
http://oft.gov.uk/about-the-oft/legal-powers/legal...
http://www.legislation.gov.uk/uksi/2004/1483/conte...
http://www.which.co.uk/consumer-rights/regulation/...

Edited by boxsternoob56 on Thursday 23 January 23:55

[blank]

I did this on an Audi to get free servicing.

Dealer told me I had to make 3 payments then settle.

Phoned VWFS and they said I could settle after the first payment. Speak to them, they won't care about you settling it early. It's very easy.


I suspect if you withdraw you might lose the incentives. If you settle you won't

[KTF]

Phone them up to get the settlement figure and pay it off. This is a common tactic with VW group finance as you get all the dealer contributions, free financing, etc. and can settle it at any time.

[barryrs]

This is quite common over on RS246 as Audi are offering upto £5k discount on finance deals on the new RS4 with total discounts coming in near £10k.

I believe all those who wanted to pay cash and took finance for discounts have had no trouble paying off the finance almost immediately as they aren't settling early but using there right to cancel within the cooling off period.

[decadent]

Thanks folks. Spoke to VWFS as suggested and I can settle within 14 days under my right to withdraw rights or settle anytime after that by getting a settlement quote. Sounds like the 14 days option is the best. Doesn't affect any of the deals the dealer throws in to make the sale.

To the doubters - what is your angle in not thinking it would be possible, seemed like common sense to me to secure a better discount than cash would achieve?

To add the deposit contribution and free servicing is on top of the prices advertised on broadspeed/car wow and such like.

[Sarnie]

I remember when cash was king!!

Now you have to take finance to get a better deal.....and then settle it!

[Guvernator]

Sarnie said:

I remember when cash was king!!

Now you have to take finance to get a better deal.....and then settle it!

It's because strangely enough car salespeople are no longer in the business of selling cars. Because of the way pay schemes are structured these days, they actually don't make much commission from selling the cars themselves any more, it all comes from getting you to sign up to finance\autoglaze\tyre insurance\gap insurance which is why it often seems like they couldn't give a rats ar*se if you buy a car or not but will give you the first degree hard sell when it comes to the other bits.

[anonymous-user]

Guvernator said:

It's because strangely enough car salespeople are no longer in the business of selling cars. Because of the way pay schemes are structured these days, they actually don't make much commission from selling the cars themselves any more, it all comes from getting you to sign up to finance\autoglaze\tyre insurance\gap insurance which is why it often seems like they couldn't give a rats ar*se if you buy a car or not but will give you the first degree hard sell when it comes to the other bits.

Exactly, I bought a Fiesta ST last year and we agreed the deal on the car, they then threw in the Diamond Brite for free, but structured the deal so that It appeared I paid for it. No cost to me (because it's not worth it), extra commission for them, the only loser being the dealer who ended up paying extra commission they didn't need to.

[NPI]

decadent said:

To the doubters - what is your angle in not thinking it would be possible, seemed like common sense to me to secure a better discount than cash would achieve?

There was a similar thread a few weeks ago and most people who responded said it couldn't be done - then the OP did it. http://www.pistonheads.com/gassing/topic.asp?h=0&a...

[simoid]

NPI said:

decadent said:

To the doubters - what is your angle in not thinking it would be possible, seemed like common sense to me to secure a better discount than cash would achieve?

There was a similar thread a few weeks ago and most people who responded said it couldn't be done - then the OP did it. http://www.pistonheads.com/gassing/topic.asp?h=0&a...

Didn't see that, I thought there would be some caveats to getting discounts as, ultimately, you're getting a car for cheaper than they'd want to sell one.

I'd have one if I was selling cars, I think

[rehab71]

OP, do not withdraw within the first 14 days, you'll have to pay back the deposit allowance and loose the incentive.

Settle after the 14 days to be sure, charge for credit will only be a few quid, happy days!

[sc0tt]

Dad bought mums KA on finance and settled after 14 days.

Cheaper to buy on finance than cash.

[NPI]

rehab71 said:

OP, do not withdraw within the first 14 days, you'll have to pay back the deposit allowance and loose the incentive.

Read the thread I linked to.

It does seem a bit bonkers that you can keep the incentives, but apparently you can.

[Quattromaster]

I've done this on my S3 and 5 merc/vw vans I've bought, be careful though, do it too many times and the finance company may reject future credit as they can see they won't make any money from you.

Same if you take out 12 months interest free on a sofa or tv, they hope you won't pay full amount at end of 12 months, I do and they seem to get the right hump.