Advertised prices conditional on PCP deal

[lornemalvo]

I see many cars for sale, particularly new cars, which are advertised at a decent price to draw you in, but it turns out these prices are only available if you take out their PCP deal (VW for example). Sometimes this is clear, sometimes it is less so. Am I the only person who thinks this practice is pretty shady, and morally dubious, firstly drawing people in with prices at which they can't buy the car for cash, and secondly for pushing people towards PCP schemes, which dealers love because they effectively lock people into a 2 or 3 year cycle of debt from which it is difficult to escape.

[The Road Crew]

Take the PCP and pay it off early. I've done a that a couple of times with VW to get the free services package.

Its a bit cheeky of them to advertise them that way but finance makes profits.

[iphonedyou]

lornemalvo said:

I see many cars for sale, particularly new cars, which are advertised at a decent price to draw you in, but it turns out these prices are only available if you take out their PCP deal (VW for example). Sometimes this is clear, sometimes it is less so. Am I the only person who thinks this practice is pretty shady, and morally dubious, firstly drawing people in with prices at which they can't buy the car for cash, and secondly for pushing people towards PCP schemes, which dealers love because they effectively lock people into a 2 or 3 year cycle of debt from which it is difficult to escape.

Take the PCP and pay it off in cash. Simple.

As for morally dubious; the price differs from the cash price because they make money off the finance. That's business, rather than morally dubious. You benefit where, as above, you take the PCP then pay it off in cash.

[Mandat]

I suppose if someone is not savvy, they could be misled by the advertising, although I would have thought that the ASA would be hot on this if dealers were breaking any rules with the adverts.

As others have said, it is easy enough to take the PCP deal and pay it off if you want to take advantage of the preferential deal.

lornemalvo said:

pushing people towards PCP schemes, which dealers love because they effectively lock people into a 2 or 3 year cycle of debt from which it is difficult to escape.

In relation to you quoted part above, I don't agree that PCP effectively locks people into a cycle of debt that they cannot escape from.

Quite clearly the PCP model is designed to get people into new cars every 3 years, but in my experience, no one is ever locked in, and a PCP can be exited at any time.

Edited by Mandat on Friday 26th November 16:58

[Dan W.]

When we have a pcp offer with deposit contribution we always tell our cash customers about the offer and say just pay it off we even help them do it in case they are worried.

Dealers are suppose to say if the offer includes deposit contributions on the adverts and some have been caught out and fined.

[Sheepshanks]

iphonedyou said:

As for morally dubious; the price differs from the cash price because they make money off the finance. That's business, rather than morally dubious.

I don't recall the details but there's some sort of law about prices being the same for cash or credit - maybe it's that higher prices can't be charged for credit.

Whatever, the car industry seems to be able to work around it.

I've taken it and then Withdrawn without any issues - although on a VW the salesman blanked me next time I saw him. But maybe they always do that. I asked a Honda salesman about it and he said a lot of people say they're going to pay it off but then never do.

[Dan W.]

Sheepshanks said:

iphonedyou said:

As for morally dubious; the price differs from the cash price because they make money off the finance. That's business, rather than morally dubious.

I don't recall the details but there's some sort of law about prices being the same for cash or credit - maybe it's that higher prices can't be charged for credit.

Whatever, the car industry seems to be able to work around it.

I've taken it and then Withdrawn without any issues - although on a VW the salesman blanked me next time I saw him. But maybe they always do that. I asked a Honda salesman about it and he said a lot of people say they're going to pay it off but then never do.

Prob some finance commission involved and when a customers pays it off before 3 months there is a finance clawback on any fees earned.

Salesman had his ass chewed out by sales manager no dobut and lost finance commission if any.

[Sheepshanks]

Dan W. said:

Prob some finance commission involved and when a customers pays it off before 3 months there is a finance clawback on any fees earned.

Salesman had his ass chewed out by sales manager no dobut and lost finance commission if any.

I did wonder that. Tough, I guess. I did ask him what he needed me to take from all the add-ons and he said paint protection. So I said I'd take it if he more or less lost the price in the deal, which he did.

I have to say that overall it was the best buying experience I've ever had, even bearing in mind the intro was via CarWow. Certainly way different to the battles I've had when paying cash.