Minimum amount of time to keep finance running

[DeuceDeuce]

As part of negotiations on a used car purchase and a new car order it was implied a better deal could be offered if I took their finance. I said I was, in principle, happy to do this but we didn’t get into specifics. Purchase prices were agreed and
I’ve paid the deposits and have signed the online order forms with the agreed prices mentioned but have not done any finance paperwork.

What I thought I would do is finance a tiny amount then clear that in a couple of months. I have since learnt that you have to finance at least 50% of the purchase price (correct me if I’m wrong though) and the apr is almost 11%! Very uncool. Who’s agreeing to 11%?!

I’m willing to take a little hit on an interest payment in order for the salesman to get his commission but even 1 month at 11% apr will be hundreds in interest.

Anyone know for certain what the implications are for the salesman if I withdraw after, say, 1 day or settle after 2 weeks or 1 month etc?

Thanks.

[wattsm666]

Normally you can pay the balance off instantly. Salesman will lose commission on that element of the sale post transaction.

[DeuceDeuce]

wattsm666 said:

Normally you can pay the balance off instantly. Salesman will lose commission on that element of the sale post transaction.

Thanks. Do you know how long I would have to keep it for the commission to get paid? Or is a percentage of the commission clawed back depending on how far into the term it’s paid off?

[Cheib]

It used to be that the finance has to run for a month for them to get their £££….think it is longer now. 50% is taking the piss….11% is the going rate I would guess ?

[Taffy66]

If you don't settle the finance until after the sixth monthly payment then they get to keep all the commision. Not too bad until end of 2021 at 5.8 APR but costly at 10.9 APR. You need to weigh the extra discount against the interest costs.

[Discombobulate]

I respect you wanting to play fair. But the salesman is setting some pretty draconian rules - 11% interest on at least 50% of cost - so feel free to follow the other rules and cancel immediately you get home.

[DeuceDeuce]

Paying 6 months at 11% would wipe out what they took off the price of the used car so that’s definitely not going to fly.

Seems best to be honest and say the finance is unpalatable and to not waste anyone’s time going through all the paperwork and then cancelling.

Their finance commissions must have fallen off a cliff since hiking their rate.

[EC2]

Taffy66 said:

If you don't settle the finance until after the sixth monthly payment then they get to keep all the commision. Not too bad until end of 2021 at 5.8 APR but costly at 10.9 APR. You need to weigh the extra discount against the interest costs.

11.9% from December. Nuts rates.

[Tagteam]

They rely on the fact that people won’t immediately pay it off .

[DeuceDeuce]

Tagteam said:

They rely on the fact that people won’t immediately pay it off .

If I pay it off immediately is the salesman likely to be fuming or does it happen often enough that it’s just par for the courses?

I really don’t want any awkward interactions in the future when dealing with the new car on order or when I’m in for servicing or have any problems with the used one.

I don’t suppose anyone at Porsche is losing any sleep over charging an excessive 11% finance rate so perhaps I shouldn’t really care about paying it off.

[Tagteam]

I think it’s just one of those things . I was told I could pay off and I did , but what I think happens is when most have bought the car , they forget the fact they were going to pay it off . There must be some psychology involved S financially it makes no sense .