Walk me through Skoda Finance options
Discussion
Mrs Brakes wants an Octavia Scout. I’ve been looking at used examples (£14k ish for 2years old / 30,000 miles), and was planning to buy using cash + trade in. We’ll probably keep it for 5+ years I expect.
However, looking on drivethedeal, carwow etc there are some very significant dealer contributions on new car, and the prices look attractive. The quoted price is c£21k for a new car (RRP £27,800 ish) however this price includes a Skoda UK contribution of £3000 but (here’s the catch) only if you take out PCP finance at 6.3% APR (“Solutions PCP”). You can put in a maximum of 30% deposit and the minimum term is 18 months I believe.
I’m not completely clear what sum the interest is applied to? Is it the total cost minus deposit or does the finance rate take into account the GFV as well?
Assuming I put in the maximum 30% deposit, I am left with £14,700 to finance. If I take the Skoda offer of finance, do I pay £14,700 * 1.06^1.5?
This works out (if I have done my sums correctly) as £1343 in interest. I don’t particularly want to pay this much interest since I have money in the bank (earning next to nothing in my ISA).
I realise I could ask the dealer a lot of these questions but a) I want to be armed with the facts before I negotiate and b) it’s 2018 so asking random people I’ve never met on an Internet forum is more socially acceptable than talking at someone’s actual face.
Questions:
Are my calculations roughly correct?
How flexible are the dealers likely to be with this 6.3% rate (I assume not very)?
With most finance stuff, there are cooling off periods etc. Can I cancel the finance after a couple of weeks and just pay off the settlement in cash?
I am a bit overwhelmed by the options and I need a steer in the right direction. Help please!
However, looking on drivethedeal, carwow etc there are some very significant dealer contributions on new car, and the prices look attractive. The quoted price is c£21k for a new car (RRP £27,800 ish) however this price includes a Skoda UK contribution of £3000 but (here’s the catch) only if you take out PCP finance at 6.3% APR (“Solutions PCP”). You can put in a maximum of 30% deposit and the minimum term is 18 months I believe.
I’m not completely clear what sum the interest is applied to? Is it the total cost minus deposit or does the finance rate take into account the GFV as well?
Assuming I put in the maximum 30% deposit, I am left with £14,700 to finance. If I take the Skoda offer of finance, do I pay £14,700 * 1.06^1.5?
This works out (if I have done my sums correctly) as £1343 in interest. I don’t particularly want to pay this much interest since I have money in the bank (earning next to nothing in my ISA).
I realise I could ask the dealer a lot of these questions but a) I want to be armed with the facts before I negotiate and b) it’s 2018 so asking random people I’ve never met on an Internet forum is more socially acceptable than talking at someone’s actual face.
Questions:
Are my calculations roughly correct?
How flexible are the dealers likely to be with this 6.3% rate (I assume not very)?
With most finance stuff, there are cooling off periods etc. Can I cancel the finance after a couple of weeks and just pay off the settlement in cash?
I am a bit overwhelmed by the options and I need a steer in the right direction. Help please!
Just sign up for the PCP and pay it off within a few days.
I waited about a month and paid off my wife’s Polo. Cost me about £60.
There are some points to note on cooling off periods and the like and I’m sure others will be along with exact details
It’s a fairly standard ploy to get the best deal and still effectively pay cash
I waited about a month and paid off my wife’s Polo. Cost me about £60.
There are some points to note on cooling off periods and the like and I’m sure others will be along with exact details
It’s a fairly standard ploy to get the best deal and still effectively pay cash
brakes said:
With most finance stuff, there are cooling off periods etc. Can I cancel the finance after a couple of weeks and just pay off the settlement in cash?
I am a bit overwhelmed by the options and I need a steer in the right direction. Help please!
Yes, you have 14 days to withdraw and you just pay the interest for the number of days before you do . Always worth a scan of the small print, but you would be unlikely (very, as it will presumably be VWFS) to have to pay back the contribution, so you just settle the difference & you either do so with your own cash or a cheaper personal loan.I am a bit overwhelmed by the options and I need a steer in the right direction. Help please!
A bit of faffing around in terms of organising things, organising with VWFS (who are fine to deal with), sorting the cash, speaking to insurers twice, that kind of thing, but definitely worth it
.Sales type might not send you a Christmas card afterwards, but some are sensibly and fully aware of this happening and you can just go to your local or a different dealer if necessary.
DukeDickson said:
brakes said:
With most finance stuff, there are cooling off periods etc. Can I cancel the finance after a couple of weeks and just pay off the settlement in cash?
I am a bit overwhelmed by the options and I need a steer in the right direction. Help please!
Yes, you have 14 days to withdraw and you just pay the interest for the number of days before you do . Always worth a scan of the small print, but you would be unlikely (very, as it will presumably be VWFS) to have to pay back the contribution, so you just settle the difference & you either do so with your own cash or a cheaper personal loan.I am a bit overwhelmed by the options and I need a steer in the right direction. Help please!
A bit of faffing around in terms of organising things, organising with VWFS (who are fine to deal with), sorting the cash, speaking to insurers twice, that kind of thing, but definitely worth it
.Sales type might not send you a Christmas card afterwards, but some are sensibly and fully aware of this happening and you can just go to your local or a different dealer if necessary.
VAGLover said:
Why do you need to phone insurance twice?
When you drive the car off the forecourt, you are the registered keeper but aren't the owner, when you get the letter confirming that the finance arm has no financial interest in the car, you are both. Made f-all difference to my premium, but the potential is always there.MoelyCrio said:
If you buy a Kodaiq you get £1000 on a prepaid card plus 2 free services as well as the £2000 deposit contribution. Worth asking for? Pay the finance off after the first car wash.
The whole process is b
ks though. Took me an hour to get an actual price from the "business manager"
Business Managers (stupid job title) are great, aren't they The whole process is b
ks though. Took me an hour to get an actual price from the "business manager"
. When I bought my current car, the sales chap was actually fine, kept plugging away on bits of add-ons, but in a perfectly acceptable way. His less good cop mate was amusing, but time wasting and a bit irritating - quit while you're behind, please.If you withdraw from the agreement you are cancelling it like it never existed and you are left to fund the car by alternative means, possibly without the contribution. Dealer loses their commission too. You pay a bit of interest for the days you've had the agreement.
If you settle the finance agreement after 3 weeks you'll pay about £52 interest, but as the agreement was run they cannot do anything about the contribution as you're paying off the loan rather than tearing the agreement up. The dealer should keep most of their incentives although some finances houses reduce commission on agreements that don't run for a minimum term.
Settle, don't withdraw. Everyone's a winner.
If you settle the finance agreement after 3 weeks you'll pay about £52 interest, but as the agreement was run they cannot do anything about the contribution as you're paying off the loan rather than tearing the agreement up. The dealer should keep most of their incentives although some finances houses reduce commission on agreements that don't run for a minimum term.
Settle, don't withdraw. Everyone's a winner.
quinny100 said:
If you withdraw from the agreement you are cancelling it like it never existed and you are left to fund the car by alternative means, possibly without the contribution. Dealer loses their commission too. You pay a bit of interest for the days you've had the agreement.
If you settle the finance agreement after 3 weeks you'll pay about £52 interest, but as the agreement was run they cannot do anything about the contribution as you're paying off the loan rather than tearing the agreement up. The dealer should keep most of their incentives although some finances houses reduce commission on agreements that don't run for a minimum term.
Settle, don't withdraw. Everyone's a winner.
Certainly with VWFS you don’t pay the contribution if you Withdraw - I’ve no idea why, but it was £2750 on our Tiguan and if VW could have got it back then they would. You can always test it by asking VW what the figure to pay is.If you settle the finance agreement after 3 weeks you'll pay about £52 interest, but as the agreement was run they cannot do anything about the contribution as you're paying off the loan rather than tearing the agreement up. The dealer should keep most of their incentives although some finances houses reduce commission on agreements that don't run for a minimum term.
Settle, don't withdraw. Everyone's a winner.
If you Settle the question doesn’t arise as your then into the agreement anyway. However you will pay a couple of months interest penalty so it’s likely to be a couple of hundred. Also you have to pay any doc etc fees, although I think VW FS has largely done away with them.
I was looking at a Scout very recently (ended up going with a Passat but bear with me).
I was going for the auto 184 hp with a few options and the best new price I found was from broker4cars. No finance required, just a straight price and cheaper than a Skoda deal with any contribution.
Good luck.
I was going for the auto 184 hp with a few options and the best new price I found was from broker4cars. No finance required, just a straight price and cheaper than a Skoda deal with any contribution.
Good luck.
quinny100 said:
If you withdraw from the agreement you are cancelling it like it never existed and you are left to fund the car by alternative means, possibly without the contribution. Dealer loses their commission too. You pay a bit of interest for the days you've had the agreement.
If you settle the finance agreement after 3 weeks you'll pay about £52 interest, but as the agreement was run they cannot do anything about the contribution as you're paying off the loan rather than tearing the agreement up. The dealer should keep most of their incentives although some finances houses reduce commission on agreements that don't run for a minimum term.
Settle, don't withdraw. Everyone's a winner.
Why? You would pay 2 months of interest, rather than a few days. If repayment of the contribution isn't specified in the agreement, it doesn't matter a jot, unless you want to keep your local dealer happy.If you settle the finance agreement after 3 weeks you'll pay about £52 interest, but as the agreement was run they cannot do anything about the contribution as you're paying off the loan rather than tearing the agreement up. The dealer should keep most of their incentives although some finances houses reduce commission on agreements that don't run for a minimum term.
Settle, don't withdraw. Everyone's a winner.
For now, the manufacturer finance houses don't care too much as 95%+ of the people they deal with either don't know or can't. Also, it is a nice, hidden way of offering discounts while appearing not to, which the German manufacturers like particularly.
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