Are the wheels about to fall of car finance?

Are the wheels about to fall of car finance?

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Discussion

silentbrown

8,792 posts

115 months

Tuesday 8th August 2017
quotequote all
djc206 said:
Sheepshanks said:
I Withdrew from my deal. It's very common. Key practical difference is there's no interest penalty.
Not necessarily true. I have posted the section from my agreement (last page) there is a £4.50/day interest penalty on mine in the event of withdrawal. Mine also stipulates that any deposit contribution would need to be repaid in full so in my case I'd have to be mad to withdraw from the agreement when I could instead just phone up and 'settle' it in full (not that I have any intention).
Thanks for posting that image (even rotated!). I'm not surprised those clauses are being put in but that's the first I've seen in the flesh.

djc206

12,239 posts

124 months

Tuesday 8th August 2017
quotequote all
silentbrown said:
Thanks for posting that image (even rotated!). I'm not surprised those clauses are being put in but that's the first I've seen in the flesh.
Indeed it most definitely wasn't a clause in any previous agreement I've had (all with VWFS). This is a Ford agreement for reference in case anyone else has one or is entering one and planning on withdrawing.

daemon

35,720 posts

196 months

Tuesday 8th August 2017
quotequote all
djc206 said:
daemon said:
Personally, i'm not arguing, i'm stating how it is smile

Theres an important difference between cancelling within the cooling off period and settling the finance via withdrawal from the agreement.

Its worth noting the difference, as it may be significant to someone planning on doing so, and who is reading this thread.
Indeed but the use of withdrawing, settling and cancelling is all getting rather confused.

To my mind everyone here who has wanted out of a finance agreement has phoned up the finance house for a settlement figure and paid the balance. They have settled their finance, they haven't cancelled anything, they haven't withdrawn from anything they've just paid the debt off as you would any other credit account. Of course withdrawal is an option but I don't see anyone here's description of what they've done as a withdrawal.
Agreed smile

djc206

12,239 posts

124 months

Tuesday 8th August 2017
quotequote all
daemon said:
Agreed smile
You may agree with me but it turns out I was wrong about people not withdrawing at least!

I was definitely right about the complication though!

daemon

35,720 posts

196 months

Tuesday 8th August 2017
quotequote all
djc206 said:
daemon said:
Agreed smile
You may agree with me but it turns out I was wrong!
I thought we were agreeing to move on from debating terminology?


djc206

12,239 posts

124 months

Tuesday 8th August 2017
quotequote all
daemon said:
djc206 said:
daemon said:
Agreed smile
You may agree with me but it turns out I was wrong!
I thought we were agreeing to move on from debating terminology?
Well I think we can all agree on that!

daemon

35,720 posts

196 months

Tuesday 8th August 2017
quotequote all
djc206 said:
daemon said:
djc206 said:
daemon said:
Agreed smile
You may agree with me but it turns out I was wrong!
I thought we were agreeing to move on from debating terminology?
Well I think we can all agree on that!
Agreed hehe

daemon

35,720 posts

196 months

Tuesday 8th August 2017
quotequote all
So anyone any thoughts on where we'll be in a years time or 3 years time?

Does anyone think it will really get any worse than say, tighter constraints on loans?

Anyone predicting a full market crash / tens of thousands of cars being repossessed / handed back, nearly new car values in the doldrums?

trowelhead

1,867 posts

120 months

Tuesday 8th August 2017
quotequote all
Ares said:
Yes. Unless you have a clever accountant/pool car/cough
ooooo... please tell me more...

Sheepshanks

32,519 posts

118 months

Tuesday 8th August 2017
quotequote all
djc206 said:
Sheepshanks said:
I Withdrew from my deal. It's very common. Key practical difference is there's no interest penalty.
Not necessarily true. I have posted the section from my agreement (last page) there is a £4.50/day interest penalty on mine in the event of withdrawal. Mine also stipulates that any deposit contribution would need to be repaid in full so in my case I'd have to be mad to withdraw from the agreement when I could instead just phone up and 'settle' it in full (not that I have any intention).
That's not an interest penalty - it's just interest! If you Withdraw after 7 days you've had the money for 7 days so you pay 7 days interest.

The penalty on Settling is governed by the Consumer Credit Act and it's 30 days. In addition you generally have to give 28 days notice so effectively you're paying 2 months interest to Settle.


The deposit contribution clause is interesting / scary though! I've never seen that before and it's certainly standard practice on the two marques I follow, VW and Mercedes, to Withdraw and keep the contribution, and they're both companies who wouldn't be doing that if they didn't have to. I guessed (but don't know for sure) it's to do with it being illegal to charge different prices for cash and credit.

djc206 said:
Indeed it most definitely wasn't a clause in any previous agreement I've had (all with VWFS). This is a Ford agreement for reference in case anyone else has one or is entering one and planning on withdrawing.
Certainly VWFS just give a full and final figure when Withdrawing. If it turns out that in future they add the Deposit Contribution back in then people would just have to default to Settling and take the interest hit. Typically a couple of hundred quid, as you suggested earlier - relatively small compared to multiple £K's contributions on offer.

nickfrog

20,871 posts

216 months

Wednesday 9th August 2017
quotequote all
trowelhead said:
Ares said:
Yes. Unless you have a clever accountant/pool car/cough
ooooo... please tell me more...
If it's a pool car then you don't pay BIK. BUT it has to be made available to other staff and can't be parked overnight at someone's house, it has to stay at the business address (which could be a home based business I suppose, but not sure) and has to be used primarily for business purposes of course.

HMRC may or may not test that the criteria are met. I certainly wouldn't chance it.


Edited by nickfrog on Wednesday 9th August 08:47

Ares

11,000 posts

119 months

Wednesday 9th August 2017
quotequote all
daemon said:
Ares said:
djc206 said:
Ares said:
Unless early settlement has punitive penalties! Settlement figures in year one often have full term interest within.
You're entitled to withdraw from any financial product within the first 14 days without penalty are you not?
Only as a cooling off clause, and you'd have to hand the car back.

....Although, as the car was then used, it would be worth even less, so buy it back and double save? wink


To settle finance, they would throw in admin charges and/or other costs. I've heard of interest being 100% front loaded, so the first £X,000 you may is all interest, hence why settlement figures in the first few months are often the full cost of the car.
I'm not having a go at you here Ares however i'm surprised that some of our Powerfully Built Company Directors on here who tell us they take out PCP deals ONLY to get the finance incentive and then pay the whole amount in cash immediately havent jumped in with a proper explanation, so instead i will.

If you SETTLE within the first month (or any time for that matter) they are legally obliged to only charge you a fair interest amount. They CANT charge you a years interest or the full interest. Typically that amounts to a few pounds / few hundred pounds at most.

And for the avoidance of doubt, you dont CANCEL the agreement - that would roll back the finance agreement and make the full amount payable to the dealer.

And i know thats how it works as (a) i used to work for Santander bank, (b) i used to sell cars for a living and (c) i've done it!!

Again, very surprised that some of the people who tell us they do this regularly havent by now jumped in to explain - gee, maybe that tells us something.....
I have no real knowledge of the process. Never done it. Looked at it years ago, it wasn't worth it financially, for me.

daemon

35,720 posts

196 months

Wednesday 9th August 2017
quotequote all
Ares said:
daemon said:
Ares said:
djc206 said:
Ares said:
Unless early settlement has punitive penalties! Settlement figures in year one often have full term interest within.
You're entitled to withdraw from any financial product within the first 14 days without penalty are you not?
Only as a cooling off clause, and you'd have to hand the car back.

....Although, as the car was then used, it would be worth even less, so buy it back and double save? wink


To settle finance, they would throw in admin charges and/or other costs. I've heard of interest being 100% front loaded, so the first £X,000 you may is all interest, hence why settlement figures in the first few months are often the full cost of the car.
I'm not having a go at you here Ares however i'm surprised that some of our Powerfully Built Company Directors on here who tell us they take out PCP deals ONLY to get the finance incentive and then pay the whole amount in cash immediately havent jumped in with a proper explanation, so instead i will.

If you SETTLE within the first month (or any time for that matter) they are legally obliged to only charge you a fair interest amount. They CANT charge you a years interest or the full interest. Typically that amounts to a few pounds / few hundred pounds at most.

And for the avoidance of doubt, you dont CANCEL the agreement - that would roll back the finance agreement and make the full amount payable to the dealer.

And i know thats how it works as (a) i used to work for Santander bank, (b) i used to sell cars for a living and (c) i've done it!!

Again, very surprised that some of the people who tell us they do this regularly havent by now jumped in to explain - gee, maybe that tells us something.....
I have no real knowledge of the process. Never done it. Looked at it years ago, it wasn't worth it financially, for me.
NP - as i said i wasnt having a go at you. smile

daemon

35,720 posts

196 months

Monday 21st August 2017
quotequote all
5 months since the thread was posted and no "retribution" for the PCPers / PCHers yet?

DonkeyApple

54,919 posts

168 months

Monday 21st August 2017
quotequote all
RSK21 said:
DonkeyApple said:
But your need to fragrantly try and re-write history and to repeatedly ignore facts and to make wild statements with no supporting evidence almost smacks of a guy trying to live with the guilt of conning hundreds of people into unsuitable debt deals so as to shift some cars and earn some dirty money?
Yikes. A former proponent of binary options lecturing on morality.

There's a joke in here somewhere.

A bookmaker and a car salesman are standing before St Peter at the pearly gates .............

Edited by RSK21 on Tuesday 8th August 13:23


Edited by RSK21 on Tuesday 8th August 13:35
A former proponent of binary options?

Are you retarded? I've probably been the single voice against them since they came into being. Fundamentally because I was there and didn't want them to launch back then.

So, please prove your statement. wink

anonymous-user

53 months

Monday 21st August 2017
quotequote all
DonkeyApple said:
A former proponent of binary options?

Are you retarded? I've probably been the single voice against them since they came into being. Fundamentally because I was there and didn't want them to launch back then.

So, please prove your statement. wink
I thought you used to work for IG ?

If it's a different bloke on record talking about IG's binary offerings many moons ago then please accept my apologies.

Still the bookie and car salesman scenario remains valid doesn't it ?






Edited by anonymous-user on Monday 21st August 21:26


Edited by anonymous-user on Monday 21st August 21:35

Lester H

2,672 posts

104 months

Monday 21st August 2017
quotequote all
Of course they are. It may affect company buyers less, but as soon as interest rates creep up, and they will, those who have bought - sorry - signed up for half a car for three years, with unrealistic mileage restrictions will be in deep dudu




Edited by Lester H on Monday 21st August 23:13

silentbrown

8,792 posts

115 months

Tuesday 22nd August 2017
quotequote all
Lester H said:
Of course they are. It may affect company buyers less, but as soon as interest rates creep up, and they will, those who have bought - sorry - signed up for half a car for three years, with unrealistic mileage restrictions will be in deep dudu
Why? The interest rate isn't variable on PCPs. They are in no deeper doodoo than before. They may not be able to afford another identical car on PCP so may end up buying secondhand, but that's no different from someone who has yet to take out a PCP...

CraigyMc

16,300 posts

235 months

Tuesday 22nd August 2017
quotequote all
silentbrown said:
Lester H said:
Of course they are. It may affect company buyers less, but as soon as interest rates creep up, and they will, those who have bought - sorry - signed up for half a car for three years, with unrealistic mileage restrictions will be in deep dudu
Why? The interest rate isn't variable on PCPs. They are in no deeper doodoo than before. They may not be able to afford another identical car on PCP so may end up buying secondhand, but that's no different from someone who has yet to take out a PCP...
If inflation takes off, the people who have taken out debt win: the debt is devalued.
Savers lose.

Given what happened to the pound, inflation has to increase, ergo taking out loans at fixed, lowish rates is sensible.

DonkeyApple

54,919 posts

168 months

Tuesday 22nd August 2017
quotequote all
RSK21 said:
DonkeyApple said:
A former proponent of binary options?

Are you retarded? I've probably been the single voice against them since they came into being. Fundamentally because I was there and didn't want them to launch back then.

So, please prove your statement. wink
I thought you used to work for IG ?

If it's a different bloke on record talking about IG's binary offerings many moons ago then please accept my apologies.

Still the bookie and car salesman scenario remains valid doesn't it ?
Bookies, car salesmen, estate agents, recruitment consultants, penny share brokers, P2P lenders. In general, people who work on commission in areas of lax regulation are simply not going to have their customers' financial health as a concern.

And with regards to IG, there was an institutional arm which ran the clearing for funds and other brokers etc rather than the spread betting/ binary side.

And if you go back to the earliest mentions of binary betting on PH you'll find a Horse_Apple being as uncomplentary as dared at that time.

They are a pure bookmaker product and absolutely everyone who works with them knows full well they are specifically designed to rinse a client's account.