Car Finance Deals - Paying Off

[MadProfessor]

Getting some pretty good "discounts" offered on a new car offered via the likes of CarWow. However, the best deals are based upon deposit contributions if you take our their finance. We're cash buyers, so is it possible take advantage of the offer and then immediately pay off / cancel the finance?

[highpeakrider]

Yes lots of people do it, collect car sign paperwork and pay off a few days latter

[33q]

highpeakrider said:

Yes lots of people do it, collect car sign paperwork and pay off a few days latter

This

I've done it twice with VAG finance

[Kev_Mk3]

MadProfessor said:

Getting some pretty good "discounts" offered on a new car offered via the likes of CarWow. However, the best deals are based upon deposit contributions if you take our their finance. We're cash buyers, so is it possible take advantage of the offer and then immediately pay off / cancel the finance?

I went to do it with Hyundai but in the small print they can charge you for the contribution so have left it 6 weeks before I clear it the interest is pence to do it

[JapanRed]

I’ve also done this before. You can pay it off in the cooling off period with no penalties I think.

[T5SOR]

I purchased a nearly new car from Nissan on Saturday and I said I was looking to finance this myself, but they told me to take the Nissan finance to get the dealer contribution and to get the extended warranty, service plan and RAC. They actually said I should cancel after 3 months and then finance myself (probably when their commison kicks in). Reading the Nissan T&Cs you need to make one payment for the service plan to remain valid, therefore I can't withdraw within 14 days, but I think it is still worth taking a 3% bank loan and paying off the 9.9% finance ASAP.

[evsky]

T5SOR said:

I purchased a nearly new car from Nissan on Saturday and I said I was looking to finance this myself, but they told me to take the Nissan finance to get the dealer contribution and to get the extended warranty, service plan and RAC. They actually said I should cancel after 3 months and then finance myself (probably when their commison kicks in). Reading the Nissan T&Cs you need to make one payment for the service plan to remain valid, therefore I can't withdraw within 14 days, but I think it is still worth taking a 3% bank loan and paying off the 9.9% finance ASAP.

Pretty sure those T&C's breach your rights. With any finance agreement you have the right to repay early in full or partially at any time.

I'd ask for clarification with that line, see if they can explain why they would take away your service plan if you exercised your right to repay the credit.

Any time a dealership asks you to keep your agreement running for x months before paying off is so that they can receive their commission payment from the finance company.

FWIW I work in the trade, and find the whole practice really disappointing, I don't know why we can't just organise a decent set of purchase methods where you don't need to BS people to earn money. I guess it's partly the consumer's fault, partly the industry.

[T5SOR]

evsky said:

Pretty sure those T&C's breach your rights. With any finance agreement you have the right to repay early in full or partially at any time.

I'd ask for clarification with that line, see if they can explain why they would take away your service plan if you exercised your right to repay the credit.

Any time a dealership asks you to keep your agreement running for x months before paying off is so that they can receive their commission payment from the finance company.

FWIW I work in the trade, and find the whole practice really disappointing, I don't know why we can't just organise a decent set of purchase methods where you don't need to BS people to earn money. I guess it's partly the consumer's fault, partly the industry.

I saw it in the service plan T&Cs:

"The two years Free Servicing offer is available on specified Nissan Intelligent Choice vehicles when purchased with Nissan Finance before 31stMarch 2017 (with a minimum amount financed of £2500 and where the finance agreement is not cancelled prior to first payment being made)"

and the latest one;

"The two years Free Servicing offer is available on specified Nissan Intelligent Choice vehicles when purchased with Nissan Finance before 6th January 2019 (with a minimum amount financed of £6,000 and where the finance agreement is not cancelled prior to first payment being made)."

The only pain will be if there is an early settlement fee (on top of the interest).

[evsky]

T5SOR said:

I saw it in the service plan T&Cs:

"The two years Free Servicing offer is available on specified Nissan Intelligent Choice vehicles when purchased with Nissan Finance before 31stMarch 2017 (with a minimum amount financed of £2500 and where the finance agreement is not cancelled prior to first payment being made)"

and the latest one;

"The two years Free Servicing offer is available on specified Nissan Intelligent Choice vehicles when purchased with Nissan Finance before 6th January 2019 (with a minimum amount financed of £6,000 and where the finance agreement is not cancelled prior to first payment being made)."

The only pain will be if there is an early settlement fee (on top of the interest).

Strange, I wouldn't think that would be allowed.

There shouldn't be any fees for settling early, 1 months interest wouldn't be major either when comparing to the benefits you'll receive.

[T5SOR]

evsky said:

T5SOR said:

I saw it in the service plan T&Cs:

"The two years Free Servicing offer is available on specified Nissan Intelligent Choice vehicles when purchased with Nissan Finance before 31stMarch 2017 (with a minimum amount financed of £2500 and where the finance agreement is not cancelled prior to first payment being made)"

and the latest one;

"The two years Free Servicing offer is available on specified Nissan Intelligent Choice vehicles when purchased with Nissan Finance before 6th January 2019 (with a minimum amount financed of £6,000 and where the finance agreement is not cancelled prior to first payment being made)."

The only pain will be if there is an early settlement fee (on top of the interest).

Strange, I wouldn't think that would be allowed.

There shouldn't be any fees for settling early, 1 months interest wouldn't be major either when comparing to the benefits you'll receive.

Interestingly, my first payment is within the 14 day cooling off period. Can I make the first payment (fulfilling my "first payment being made") and still withdraw? Or can you not withdraw if you have already made a payment and it has to be a settlement?

Not that it makes much diference I guess.

[Ken Figenus]

If you (ever) make a payment to clear the pot AFTER the initial cancellation period make sure you leave £100 in . This will save you some money as they will add 28 days interest as a 'notice period' if you pay it all off completely. If you leave the £100 in there and it gets repaid by the standard DD you don't get the penalty. All the b's do it...

[wargriff]

T5SOR said:

Interestingly, my first payment is within the 14 day cooling off period. Can I make the first payment (fulfilling my "first payment being made") and still withdraw? Or can you not withdraw if you have already made a payment and it has to be a settlement?

Not that it makes much diference I guess.

If you withdraw from the dealers finance contract within 14 days, you have to pay the finance company back direct the money funded, with a small daily interest charge. After the 14 window you enter into the early repayment clause of the consumer credit act. This is where there is a charge for interest etc.
The 14 day option will work out cheaper.

[HTP99]

evsky said:

FWIW I work in the trade, and find the whole practice really disappointing, I don't know why we can't just organise a decent set of purchase methods where you don't need to BS people to earn money. I guess it's partly the consumer's fault, partly the industry.

I was told by our manufacturers finance rep that the rate of withdrawal is monitored by the manufacturer and FCA as when above a certain level it could be construed that the finance package is being mis-sold; basically finance is being offered and entered in to and being advised to enter into by the dealership in the full knowledge that it will be withdrawn from, in order to just receive extra benefits, it is likely to be cracked down upon at some stage.

In our manufacturers finance paperwork it actually states that if an agreement is withdrawn from in the 14 day cooling off period then the customer will be liable for any deposit contributions and benefits, they don't act upon it but it is in the T's&C's and I have been advised that they may act upon it at some point in the future.