Can you pay off PCP in 14 day cool off period without issue?
Discussion
I’m considering buying a new car today and am thinking I’d want to go down the bank loan route - however the discounts for a cash buyer vanish vs takin the PCP.
Now I may stick with the PCP (but it’s 11.9% vs 2.9% bank loan....).
But if I took the PCP today and then within 14 day cool off period if I clear it in full is there any settlement issue / early redemption costs I need to be aware of?
Now I may stick with the PCP (but it’s 11.9% vs 2.9% bank loan....).
But if I took the PCP today and then within 14 day cool off period if I clear it in full is there any settlement issue / early redemption costs I need to be aware of?
There is a slight difference between paying it off and withdrawing from the deal. There will be minimum notice in the first, which will probably mean you pay a total of two months interest, plus any fees you agreed to. Withdrawing will just see you paying interest for the time you had the money - and could have implications for any “contribution”, though I think this is unlikely.
ncjones said:
We paid off a VWFS PCP within 48hrs and it didn't have any implications on the contribution, service package or extended warranty that they were unwilling to include on a cash sale.
I’d fully expect that if you paid it off. I think VWFS would probably let you keep it even if you withdrew from the agreement (which is subtly different from paying it off).stevemcs said:
They are all different, dad had to leave his f pace on the pcp for 6 months to get the £1500 deposit contribution, it also means the dealer and salesman kept their commission
It's most unlikely that's true. I got £2750 deposit contribution off VW and their dealer and Withdrew from the finance a few days later. I was careful to ask VWFS that the amount they wanted was full and final. However Withdrawing means it's like the deal never existed, so it is a bit of a grey area. A salesman on here said some finance companies do reserve the right to recover it, but they never do.
ZX10R NIN said:
It depends on the dealer but I normally advise my clients to make two payments & then clear the balance, make sure there are no penalties for clearing the balance early.
It's always going to cost you 2 months when you Settle - you have to give 28 days notice and then the max penalty they can charge is 30 days (I might have got the 28/30 wrong way around). On a hefty PCP that could be a few hundred quid. Withdrawing within 14 days will cost buttons.syl said:
I’d fully expect that if you paid it off. I think VWFS would probably let you keep it even if you withdrew from the agreement (which is subtly different from paying it off).
We collected the car on Saturday, on the Monday I rang VWFS and asked to pay off the full balance by debit card. It cost ca. £40 interest & fees. Certainly worthwhile in terms of the extras offered for taking PCP and a whole lot less than the interest had we just let the pcp run. I presumed I was just settling the agree early, but no idea how it was officially treated. Sheepshanks said:
It's always going to cost you 2 months when you Settle - you have to give 28 days notice and then the max penalty they can charge is 30 days (I might have got the 28/30 wrong way around). On a hefty PCP that could be a few hundred quid. Withdrawing within 14 days will cost buttons.
Penalty is two months interest remember, not two month payments.Wooda80 said:
Penalty is two months interest remember, not two month payments.
Yes - rough numbers; £25K at 5% flat, that's going to be a bit over £200 in interest. APR wil make it higher.ETA: Didn't notice the interest rate was in the original post - didn't notice the OP is Welshbeef, either
- but 11.9% on £25K borrowed would be £500 interest for the two month notice and penalty period. The amount would decrease the longer the loan had run, but we're talking about Settling early on.Edited by Sheepshanks on Saturday 7th September 13:28
ZX10R NIN said:
It depends on the dealer but I normally advise my clients to make two payments & then clear the balance, make sure there are no penalties for clearing the balance early.
The penalty is they will be paying a load of unnecessary interest.The correct advice should be to read the small print and check there is no way the dealer can claw back any incentives and then exercise the right to withdraw within 14 days.
jjr1 said:
The penalty is they will be paying a load of unnecessary interest.
The correct advice should be to read the small print and check there is no way the dealer can claw back any incentives and then exercise the right to withdraw within 14 days.
True but when you're getting a 2-3k contribution £200-300 is negligible in the overall scheme of things.The correct advice should be to read the small print and check there is no way the dealer can claw back any incentives and then exercise the right to withdraw within 14 days.
My parents have both just for new cars. My dads just retired and they have treated themselves to a Seat Leon and a Hyundai i10
Both had loads of incentives - service plans, discounts, additional extras, etc. For taking it all out on finance.
They paid off both lots of finance days after collection with no penalty or fee. They even checked and it made no difference to the dealers, they still got their full commission.
Both had loads of incentives - service plans, discounts, additional extras, etc. For taking it all out on finance.
They paid off both lots of finance days after collection with no penalty or fee. They even checked and it made no difference to the dealers, they still got their full commission.
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