Buying a new car and Finance question

[RemaL]

OK we are going to test ride the GT86 this week. pretty much settled on it as both me and the wife like it

Now we are looking at Part ex'ing our S max, was looking at nearly new car or possible new car. Seen a Burnt orange GT86 they have in the showroom and asked what financial benefits do we get buying new other than we are the first owner and run it in correctly


We buy our cars outright but was told if we buy a new car they will give us £1000 towards the cost and we can pay it all off after 3 months. Sounds good to me but are there any downsides to this. thinking issues with paying it off after the 3 months and any penalties we may get

I have never taken up finance on a car so i'm a little new to this.


Can anyone give me advice on buying a car on finance and paying it off totally after the given time

cheers

[andymc]

no as I think three months is the earliest that doesn't incur any losses

[berlintaxi]

You can pay it off the day after you pick it up if you want, the 3 months period they have told you is probably because they would lose the commission on the finance if you pay it off earlier.

[Cupramax]

berlintaxi said:

You can pay it off the day after you pick it up if you want, the 3 months period they have told you is probably because they would lose the commission on the finance if you pay it off earlier.

This keeps coming up, if they are telling you 3 months they are committing an offence and should be reported to the financial services authority for miss selling. As above, they are only telling you this so they dont lose their commision.

[RemaL]

Ahh interesting and thanks for the reply. Interesting they are telling people you can only pay it off after 3 months when this is incorrect.

I shall take them up on their offer then pay it off ASAP once I have the car.

With finance is their any issues I may face when paying it off. As I said I have never taken up finance on a car so any tips on what to expect would be helpful. just been Googling and hope I won't have to pay a huge amount of interest if I pay it off early

[Sheepshanks]

RemaL said:

..just been Googling and hope I won't have to pay a huge amount of interest if I pay it off early

The maximum amount (and your ability to cancel, as mentioned above) is set in law in the Consumer Credit Act at 2 months but you often have to pay less than that. Note it's 2 months interest, not payments, so it should be a pretty trivial amount.

You will have to pay the various documentation etc fees, although they should already be rolled up in the agreement. It's just that if you're doing this to get the £1000 contribution, bear in mind you could lose maybe £2-300 of that in fees.

Sometimes (this keeps coming up in relation to VAG group finance agreements) you can withdraw from (rather than settle) the finance deal in the first few days and still keep the incentives.

[rfoster]

The agreement will be regulated by the consumer credit act so all finance companies will have to adhere to exactly the same formula when they calculate your settlement figure - you cannot be 'stung' on a settlement figure. As mentioned above, it's likely that the dealer's intro commission on the deal will be debited back by the finance company if you settle the agreement prior to making 3 monthly payments (hence they've mentioned it to you.)

[HTP99]

With HP or a PCP you have a 14 day cooling off period where you can cancel the finance 14 days after signing the finance docs, there will be zero charges, however you are still committed to the purchase of the car.

What I'm not sure about though is the extra incentives that are on offer from the manufacturer to take the finance if you cancel the agreement, technically as you aren't proceeding with the finance then it becomes a "cash deal" so you may not be entitled to the extra incentives that you get for taking the finance agreement out as you will be reverting back to paying the dealer for the car.

[RemaL]

great thanks for the feedback so far.

[rfoster]

HTP99 said:

With HP or a PCP you have a 14 day cooling off period where you can cancel the finance 14 days after signing the finance docs, there will be zero charges, however you are still committed to the purchase of the car.

What I'm not sure about though is the extra incentives that are on offer from the manufacturer to take the finance if you cancel the agreement, technically as you aren't proceeding with the finance then it becomes a "cash deal" so you may not be entitled to the extra incentives that you get for taking the finance agreement out as you will be reverting back to paying the dealer for the car.

There will be a daily interest charge payable if you cancel within the 14 day cooling off period - this will be shown on the finance agreement. It's very small.

[Sheepshanks]

If the deal with the salesman is to keep the finance for 3mths and then cancel it, it would be a bit stty to cancel it earlier.

[berlintaxi]

Sheepshanks said:

If the deal with the salesman is to keep the finance for 3mths and then cancel it, it would be a bit stty to cancel it earlier.

Depends on the salesman, I had one who was meant to be sorting out a reg transfer for me,never organised it and once I had picked the car up he stopped returning my calls and answering emails, so I felt no guilt in paying off the finance.

[Sheepshanks]

rfoster said:

There will be a daily interest charge payable if you cancel within the 14 day cooling off period - this will be shown on the finance agreement. It's very small.

That's interesting as it implies that if the customer withdraws then they still pay the finance company.

Is that a new thing? I thought if the deal was "unwound" and then the customer would be back to square one and have to pay the dealer for the car.

[HTP99]

Sheepshanks said:

rfoster said:

There will be a daily interest charge payable if you cancel within the 14 day cooling off period - this will be shown on the finance agreement. It's very small.

That's interesting as it implies that if the customer withdraws then they still pay the finance company.

Is that a new thing? I thought if the deal was "unwound" and then the customer would be back to square one and have to pay the dealer for the car.

[i]"Right of Withdrawal : You have a right to withdraw from this Agreement without having to give a reason. The right to withdraw starts on the date of this Agreement and ends on the expiry of 14 days beginning with the date after that day. To withdraw you must notify us by writing to us using the address shown at the top of this Agreement marked for the attention of Customer Services
Department or by telephoning us on xxxx xxx xxxx. If you withdraw you must repay the Amount of Credit shown above together with interest at the interest rate shown above accrued from the date of this Agreement to the date of repayment without delay and no later than 30 calendar days after giving the notice to withdraw. Payment must be made to us at the address shown at the top
of this Agreement marked for the attention of Customer Services Department. The amount of interest payable per day is £2.50."[/i]

It seems that indeed there are nominal charges and you do settle with the finance company, thinking about it though once the agreement has been signed the finance company generally pays out to the dealer the same day so if you cancel the agreement within the 14 days, as the dealer already has the funds for the car then it would need to be settled with the finance company.

edit, why are italics not working?!

[rfoster]

It's been around for a couple of years now, and it's called the 'right of withdrawl' - you have to provide notice within 14 days of the execution of the agreement. In the case of Alphera Finance (BMW) you then have up to 30 days from the date that notice was given to withdraw from the finance. As an example, on a £50k lend I did about 15 months ago, the daily interest was £4.57. It's shown on finance agreements now.

I think it's fair - the finance company shouldn't be out of pocket for paying out on a deal that you decide to withdraw from, hence the daily interest charge (which works out at about 3% per year). Cheap money.

[mcflurry]

My Toyota PCP has a clause saying that the car will come with 2 free services, as long as the finance agreement is still running at the point of service.
I've worked out that if I settle in month 19, the interest cost is lower than the 2 services

[Save Ferris]

Out of curiosiry, what kind of deal are you being offered on the GT?
(Toyota are struggling with them at the moment, so most dealers are discounting quite heavily)

[RemaL]

Save Ferris said:

Out of curiosiry, what kind of deal are you being offered on the GT?
(Toyota are struggling with them at the moment, so most dealers are discounting quite heavily)

I'm not being offered any deal other than if I go for a new car and use finance for a short while I get 1k towards it. I will be trying to get a few accessory's added to it as well. Plus get what I feel is best for a 10 plate S max's in good condition with 24k on the clock

But only asking about fiance at the moment as i'm yet to test ride the car.

[Scottland]

Have you compared the price you're paying to online brokers such as DriveTheDeal/Broadspeed?

You'll still pick up the car from a Toyota dealership and your warranty is through Toyota you're just going through a broker.

[Steve vRS]

Looked at a GT86 a few weeks a go and without even haggling we were offered £1500 off and the quilted fancy leather.

Steve