Can I Pay PCP Off the Next Day?

[R8VBV]

Hi all,

About to buy a new used car in the next few days. Spoke to the main dealer and they will only do a deal if I take out a PCP loan on the car. The rate is ridiculous at over 10%. The offer is a deposit contribution and 2 free services.

I always buy my cars in cash unless the interest rate is less then I can earn from the savings, but the dealer won't do anything for cash! What eve happened to "cash is king" .

Anyway, if I take out the finance and then pay it off the next day, is there anything I need to consider?

[KungFuPanda]

I'm not sure but wouldn't you have to settle the loaned amount as well as the GFV too? If the GFV is wildly out, you might be at a loss.

[Nickp82]

you can pay it off that quickly but it will be considered a withdrawal from the finance offer (rather than an early settlement) as you are in the 14 day cooling off period so the free servicing etc could be withdrawn too.

Edited by Nickp82 on Thursday 30th March 20:21

[Wilmslowboy]

It matters what the deal is ?

If the deal is manufacture deposit contribution and free services while financed then in theory if you cancel the finance, the deal could be reversed out (you asked to repay the manufacture contribution).

Look through the paper work, it might be better to wait at least 30 or so days.

Edited to say

I noticed it is a used car - so it's unlikely the deal is being supported by the manufacture but instead the dealer. So claw back less likely.

[gl20]

Normally ok (particularly as there is probably a cooling off period) but check the small print. Other thing is that the dealer may lose their commission. We regularly do Finance to get a better deal. The dealer we use normally asks we wait 2 months before paying off so he won't get stung.

[timbo999]

KungFuPanda said:

I'm not sure but wouldn't you have to settle the loaned amount as well as the GFV too? If the GFV is wildly out, you might be at a loss.

The GFV (actually its really a balloon payment) is part of the loaned amount... you pay interest on it!

So, if the car is £20k and you borrow £18k with a balloon (i.e. a deferred final payment) of £10k you owe £18k and that's what you'll pay off.

[steve-5snwi]

Cash isn't king, Cash is a pain in the bum (the physical folding notes) there are card charges for debit cards too now and bank transfers are much better as the money clears quicker.

However in answer to your question you need to read the small print on the contract.

[Cupramax]

R8VBV said:

is there anything I need to consider?

Yes, you should consider telling the dealer to shove it up there arse... FFS forcing you into PCP??? unbelievable.

[Elroy Blue]

Friend bought an Audi with two free services with Audi finance. Paid it off the following week but kept the servicing.

[R8VBV]

The dealer is VW. I believe they can't penalise you for paying it off, as it's against FCA regs.

Car dealers act more like banks now, it's so annoying!!

[anonymous-user]

Cupramax said:

Yes, you should consider telling the dealer to shove it up there arse... FFS forcing you into PCP??? unbelievable.

But he isnt forcing him to take PCP is he?

He's saying he can have a better deal if he takes PCP, there is clearly a choice.

[MDMA .]

Buy one privately. Cash is King

[kambites]

R8VBV said:

The dealer is VW. I believe they can't penalise you for paying it off, as it's against FCA regs.

You can certainly be charged a fee for paying off a loan early - it's very common with mortgages. They can obviously also withdraw benefits which are part of the loan agreement if you pay off the loan, I suppose in this case that depends on how the free servicing agreement is worded.

[Butter Face]

yellowbentines said:

Cupramax said:

Yes, you should consider telling the dealer to shove it up there arse... FFS forcing you into PCP??? unbelievable.

But he isnt forcing him to take PCP is he?

He's saying he can have a better deal if he takes PCP, there is clearly a choice.

Absolutely.

Manufacturer will supply the deposit contribution (possibly) on the PCP deal so a better deal for he customer.

[lufbramatt]

My dad has just done this on anew Honda Civic. He wanted to pay cash. Honda were doing a £3k discount plus 5 years servicing if he took the finance. Dealer advised him to take the finance, make the first payment then pay it off. Think there was an £80 admin fee to pay it off early but he kept the free servicing.

[Cupramax]

Butter Face said:

yellowbentines said:

Cupramax said:

Yes, you should consider telling the dealer to shove it up there arse... FFS forcing you into PCP??? unbelievable.

But he isnt forcing him to take PCP is he?

He's saying he can have a better deal if he takes PCP, there is clearly a choice.

Absolutely.

Manufacturer will supply the deposit contribution (possibly) on the PCP deal so a better deal for he customer.

OK, I misread what was said, understand what your saying now.

[Roger Irrelevant]

Nickp82 said:

you can pay it off that quickly but it will be considered a withdrawal from the finance offer (rather than an early settlement) as you are in the 14 day cooling off period so the free servicing etc could be withdrawn too.

Edited by Nickp82 on Thursday 30th March 20:21

I've seen this said on PH quite a bit but it's not true. You have the right to settle early at any time, i.e. you can request early settlement before the ink is dry on the contract. In the first 14 days you also have the right of withdrawal, but the two aren't mutually exclusive.

[R8VBV]

So regardless, if I phone and pay down to £1, I can't be penalised as I still have the contract in place, if there is a clause regarding early settlement.

I can't believe they could penalise me for early settlement, even if the terms are in the contract. The FCA would be all over them! Cancelling within 14 days, is obviously different.

I remember when I bought my Aston Martin, I asked if they could do a deal if I did finance. They told me they can't do that as the FCA prevents them from offering a preferential deal for taking finance. I wonder what's changed?

[kambites]

R8VBV said:

I wonder what's changed?

I suspect they get around it by offering the extra services as part of the finance contract not as part of the sale. I'd guess that's why discounts these days are called "deposit contributions", too; it makes them part of the finance deal.

[Sheepshanks]

R8VBV said:

The dealer is VW.

We did it with VW last year - no problem, indeed the VW FS people were delighful, best interaction I've ever had with VW and its dealers!

You can Withdraw within 14 days but note that strictly this is within 14 days of signing the agreement and the dealer may want you to sign a few days before picking the car up. VWFS give you settlement figure which is frozen and you have 30 days to pay it. You'll pay interest on a daily basis until the point at which you say you want to Withdraw.

You keep the deposit contribution. In our case we paid £149 for the servicing package so I knew that would be OK too, but I don't know what happens if the package is free.

Over 14 days you're Settling. You'll pay a penalty of approx 2 months interest. If there's any fees then you pay those too (you don't if Withdrawing but VW have largely done away with them anyway). If you're settling then you'll definitely keep the service package.