VERY dodgy Vauxhall offer - Help!

[spunko2010]

Hi all :)

Some of you may remember I was looking to lease, but I think I'm back to buying outright now.

I have found a great car with a Vauxhall dealer (part of Network Q etc so all legit?) and it's very reasonably priced. The only issue is the dealer asked me "how I'm going to pay" I said cash, and he said that to get this price (about £4k under the list price) I need to get finance through Vauxhall. He said it was part of their "SBA "or something. He then went on to say that if I didn't get the finance (minimum £1500) then I'd have to pay £2k more on the list price. Something to do with a promotion Vauxhall are doing.

Is this legal? Should I walk away? Any advice welcome guys. I was shocked to hear this from a reputable Vauxhall dealer.

[vikingaero]

Walk. If it's not right walk every time.

Or have fun. Get the finance quote and papers and tell the salesman you're going to make a complaint about him and walk off with your copies as evidence.

[Lemonade Pockets]

You are not supposed to differ between cash and finance deals.

However however dubious there probably isn't alot a you can do about it. I would guess that if they ever came to given you a written offer they would show the £2k as a deposit contribution which would get round the problem (from their point of view).

The reason is because Vauxhall and or the Finance Company (GMAC probabaly) will give the dealer a extra bonus if you buy it on finance. They are passing all or some of this bonus onto you hence the price difference. N.b. I very much doubt it would be £2k ontop of the list price i'm guessing they meant £2k on top of the discounted finance price.

I would personally say they have been open and honest and laid the options on the table as it is, more than a lot of dealers do. I would rather have this than them try make a extra £2k out of selling me finance!

[mikey72]

I've seen it before.
They make a good profit on the finance deal, so the car is cheap. No profit on cash, so the car has to be dearer.
If the overall price is good, buy it.
Likewise the dealer though, if there's no profit for them, they can't afford to sell it you, so they'll walk away.

[jack spratt]

Some manufacturers do this as a incentive they offer a deposit contribution if you buy on finance!! whether this is what Vauxhall are doing I do not know !! phone them or look on the website to find out .

The dealer would prefer you to buy on finance as they get more commission so he my be trying to pull a fast one or this is a genuine Vauxhall offer

[jack spratt]

Taken from Vauxhall website

Vauxhall will be happy to help contribute towards your deposit up to £2750 on a new car if you take out a selected GMAC finance agreement. Please note that FDA can be used with GMAC Hire Purchase contacts (excluding 0% finance) or Choices (Corsa only, excluding 4.9% choices). For full offer details and availability please see the Finance Deposit Allowance table for cars. (http://www.vauxhall.com/vaux/pages/offers/offerTypes/carsFinanceDepositAllowance.jsp).

Terms and conditions
Finance Deposit Allowance can be used with selected GMAC Hire Purchase agreements and Choices Finance (selected Corsa models only).
Finance Deposit Allowance cannot be used in conjunction with 0% Finance or 4.9% Choices Finance Offers. Eligibility
Offer applies to private individuals, Vauxhall Partners and small businesses 1-24 vehicles (purchase only excl. B2B). All other customers are excluded.
Availability
Available at participating retailers only. Available on Agila Club and Design, Corsa Active, Active Plus, Design, Design inTouch, SXi, SXi inTouch, SRi and VXR (excl. Arctic Edition), all Tigra models, Meriva Active, Active Plus, Club, Design and VXR, Astra Hatchback Active, Active Plus and Elite, Astra Hatchback and Estate Design, SXi and SRi, Astra Sport Hatch Active, Active Plus, Design, SXi, SRi and VXR, all Astra TwinTop models (excl. all Exclusiv models), Zafira Active, Active Plus, Design, Elite, SRi and VXR, all Insignia models. Offers may not apply to all retailer stock.

[Lemonade Pockets]

There you go then thats where the extra £2k comes from.

Simple buy on finance you get an extra £2k chucked in on your behalf.

If you don't buy on finance you don't get it.

All legal legit etc etc. The dealer obviously just fudged his words a bit when trying to explain it.

You could always buy it on finance get the benefit of the deposit contribution, then settle immediately. You might incur a few charges but you'd get the lions share of £2k.

[spunko2010]

Hi all, Thanks for the advice. Per the above, that's exactly what I did. He said the early settlement fee and the interest if paid immediately would only be around £250. So I've still saved a lot, and have paid the £500 deposit. Assuming it all goes through, I should have the car by 7th May :)

Their part exchange price was also very fair, so I'm a happy bunny.

[Lemonade Pockets]

Good happy outcome for all. Except GMAC who will be spitting feathers when you settle. Never mind. If GM go under we can all blame you. :)

[Cazza]

FYI, main dealers generally prefer you not to pay with cash, they're too large to need / want to do anything "clever" with VAT and, as most people want to pick up cars at the weekend, they've got to find somewhere safe to put the cash until the admin people are back in on Monday morning because no one in the sales office will have a clue where the keys for the safe are kept (for experience...... :rolleyes:)

[mikey72]

Hi all, Thanks for the advice. Per the above, that's exactly what I did. He said the early settlement fee and the interest if paid immediately would only be around £250. So I've still saved a lot, and have paid the £500 deposit. Assuming it all goes through, I should have the car by 7th May :)

Their part exchange price was also very fair, so I'm a happy bunny.

Hope you got that in writing, and they don't want the finance deposit back as well.

[jack spratt]

FYI, main dealers generally prefer you not to pay with cash, they're too large to need / want to do anything "clever" with VAT and, as most people want to pick up cars at the weekend, they've got to find somewhere safe to put the cash until the admin people are back in on Monday morning because no one in the sales office will have a clue where the keys for the safe are kept (for experience...... :rolleyes:)

I think when the term paying in cash most people mean taking a bankers draft or pre clear a personal cheque.
I do not think many people would walk into a dealer with £10,000 plus in readies and under the money laundering regulations would cause problems

[Lemonade Pockets]

Hope you got that in writing, and they don't want the finance deposit back as well.

Irrelevant once you've driven off in the car you have completed you contract with the dealer! Then just ring the finance company. They are obliged by law to let you settle immediately.

[Lemonade Pockets]

I think when the term paying in cash most people mean taking a bankers draft or pre clear a personal cheque.
I do not think many people would walk into a dealer with £10,000 plus in readies and under the money laundering regulations would cause problems

:rotfl:I'm glad someone pointed that out.

[Cazza]

I think when the term paying in cash most people mean taking a bankers draft or pre clear a personal cheque.
I do not think many people would walk into a dealer with £10,000 plus in readies and under the money laundering regulations would cause problems


I agree with you completely and I think the idea of carrying that much money around is nuts, but you'd be surprised what some people will do, and not knowing the OP (and who else might read this thread in the future!) I thught it might be helpful to clarify ;)

[mikey72]

Irrelevant once you've driven off in the car you have completed you contract with the dealer! Then just ring the finance company. They are obliged by law to let you settle immediately.

Erm, no, not irrelevant really, not if it says repayment is required in the terms and conditions of the contract if you pay the loan off early.
I don't know what it says, I haven't read it myself.
Don't you think there is a possibility a large worldwide company that provided the car, the dealer, and the loan may have thought of this trick, not just yourself?
They haven't said you can't repay early either, in fact it'll cost a fee of £250.

[Lemonade Pockets]

The deposit contribution will be listed as coming from the dealer.

I can pretty much guarantee that it won't be listed in the T+C's. But i will glady be proved wrong.

I'm not saying they haven't thought of it but i have never come across a dealer or a finance company that has protected themselves from it. Dixon's pretty much went under for exactly this reason.

I can only assume the reason they haven't is because legally they can't, although i can't place the specific reason, probably because it infringes on CCA.

You maybe interested to know that he would have to pay this £250 regardless of when he paid the finance off, if it came to it would be ontop of his last payment. He can repay when ever he choses!

So to summise irrelevant, if he produces a contract that says otherwise i'll eat my hat (and apologise to you)!

[mikey72]

Apologise the OP instead.
(and don't eat your hat, send it to the OP, he'll have blown his budget for one).
The other option was part finance, the GMAC deal depands on £1500 minimum, from the link above.
Weren't Dixons a part of DSG International, who are still trading, mainly as Currys and PCWorld, but Dixons suffered as they were high street shops mainly, with no way to pick anything up by car, whereas the other two are mainly out of town?
Dixons still trades online as well.

[Lemonade Pockets]

Apologise the OP instead.
(and don't eat your hat, send it to the OP, he'll have blown his budget for one).
The other option was part finance, the GMAC deal depands on £1500 minimum, from the link above.
Weren't Dixons a part of DSG International, who are still trading, mainly as Currys and PCWorld, but Dixons suffered as they were high street shops mainly, with no way to pick anything up by car, whereas the other two are mainly out of town?
Dixons still trades online as well.


I like your humour!

With regards to the finance you are adding two and two together and making 5. GMAC will pay vauxhall dealers a £1500 (or whatever it is) commision every time they sell a finance package. This commision is then passed onto the customer as a deposit contribution by the dealer. It forms part of the contract between the dealer and the customer (i.e. the order form).
If i was a betting man i'd bet a large amount of money that there will be no T+C's on either the Dealers or GMAC's standard form contracts which require the deposit contribution to repaid in the case of early settlement! Should the dealer be switched on (it doesn't sound as if they are) about what your about to do they may try and hand write a T+C in which case you obviously refuse to sign.

Dixons the car retailers (which is now no more) has nothing to do with DSG.

My job used to be business manager of new car sales. So i dealt with these packages every day for over 4years. Now if something has changed i'll apologise to you the OP and anyone else that cares but i'm pretty confident that it hasn't. However i would of never sold a car in this way, because the finance companies normally (GMAC maybe different) claw back any commision paid if the balance is settled within three months to prevent this activity. Now that is the dealers problem so silly them if they sell you a car on this basis knowing what you are going to do.

[spunko2010]

Mikey/Lemonade, thanks for input. I checked with the dealer and can confirm that it does NOT need to be paid back if I settle early. But best to check these things, he again said the only thing I need to pay is the early settlement fee and remaining interest, which will come to £250-£300. He said he sold one of these exact cars a few days before and knows the ins and outs. Of course, never trust a car dealer! But I'm happy that I put my money where my mouth is, and went for it, as I still think it's a great offer.

For anyone who's interested, the car is an Astra VXR so the deals on these vehicles are NOT that great compared to other more readily available models or editions, such as the SXi Astra.


PS: lemonade, purely out of interest, how much commission would the dealership (and indeed the individual) expect to make on a £1500 loan ? (Plus £300)?

[Lemonade Pockets]

In general it Depends on the rate (compared to finance companies base rate, which will not be 0.5%) term and volume bonus paid. The dealers sometimes get a portion of the documentation fees too. In short there's too many variables to give you a accurate answer.

With finance companies that are linked to MFR's they sometimes ignore these and they pay commision according to what particular sales objectives they have. That way the can push sales of VXR's or whatever.

It sounds like GMAC in this instance have just agreed to pay a flat rate based on the car sold rather than the actual finance package. This is probably equal to what they have given you as a deposit contribution. There is no way they'd earn £1500 commision on £1500 finance if it was calculated in the normal manner. The only reason £1500 is given is because that is the minimum amount you can generally do on HP (don't ask me why).

N.b This is why they seperate it out from 0% as the dealer won't be paid a comission for finance sold in this way. Infact it will be the opposite they will probably have to pay a subsidy to the finance co.
Low rate PCP's also normally don't pay comission unless the Finance Company is linked to the MFR in which case they might pay a smaller (usually less than £500) flat rate commision.

When you sign the finance documents take note of the documentation fee's and the option to purchase fee. It is these that you will have to pay when you settle + a amount of interest.

[mluton]

Mmmmmmmmm VXR, Please tell me you had the nice blue.

[spunko2010]

Yes :P Arden Blue they call it. I was going to go for the black Sapphire because I like that as well but they didn't have any as stock, all they had was Arden Blue or the Power Red, so I opted for the blue. Glad I did now, suddenly gone off black ones.:rotfl:

[Chippy Minton]

New car? Didn't have any in stock? I wonder how old the one your buying really is. No doubt it's been sat in a wet field for the past six months.

[RichyRich]

Would there not be a cooling-off period whereby you can cancel the finance without penalty?

[Lemonade Pockets]

Would there not be a cooling-off period whereby you can cancel the finance without penalty?

No, does not apply if you go into a dealership to sign the finance documents.

[nullogik]

I've seen it before.
They make a good profit on the finance deal, so the car is cheap. No profit on cash, so the car has to be dearer.
If the overall price is good, buy it.
Likewise the dealer though, if there's no profit for them, they can't afford to sell it you, so they'll walk away.

Mikey is right, I used to work in a Honda dealership. A car salesman (particularly new cars) will often make far more in commission from selling you a finance deal than what they actually get from selling the car. Hence why they are so pushy in offering you finance.

[spunko2010]

New car? Didn't have any in stock? I wonder how old the one your buying really is. No doubt it's been sat in a wet field for the past six months.

Unlikely since this model is usually made to order. Perhaps only one month :) And as long as it's got an 09 plate on it and under warranty, I'm not really fussed!

[spunko2010]

No, does not apply if you go into a dealership to sign the finance documents.

Well, strictly speaking I'm not going in, they have sent them to me in the post.

[Lemonade Pockets]

Well, strictly speaking I'm not going in, they have sent them to me in the post.

Hmmm thats interesting. I think you will probably be able to cancel the finance once you have picked the car up with no charges then - i shall try and investigate further. Generally HP doc's get signed on licensed premises so are not cancelleable i.e. you have no cooling off period.

Salesman sounds like a right charlie (from a business point of view).

[Lemonade Pockets]

http://www.which.co.uk/advice/understanding-the-consumer-credit-act/faqs/index.jsp

[spunko2010]

Perhaps I was wrong, I know they are doing a delivery to my home on a transporter and taking my current car as p/x, after a basic inspection. Maybe I will have to sign the credit agreement then, although that does seem a little late as they are sending me the documents for the £1500 loan in the post. I assume this is where the c/a will be.

I know that this should come tomorrow. Either way, that's still not on their premises, it's on mine! I know I am not required to visit the dealer as it's 90+ miles away from me, unless I really want to pick it up early....

Actually, perhaps that'll be their tactic.. "come up to Leicestershire and collect it now or wait a week for us to delivery it"... I'd probably still do it as I'm far too impatient... :D

[spunko2010]

Just wanted to update this.

Not really sure what the dealer is playing at... Rung him three times now to get the agreement sent out in the post but it never comes... I suspect that he is going to invite me up to his showroom to sign :(

[Lemonade Pockets]

Probably been given a slap by his salesmanger for trying to put them in the post.