Kia car purchase - advised to take finance instead of cash purchase!

Face · 19 August 2017 at 4:39PM

Hi,

I hope someone can offer some advice please.

Been to look at buying a new Kia today as a cash buyer.

The sales person has advised me though that if I take out a finance deal (PCP, I believe) then the finance company will then give me a £1500 deposit contribution. The sales person then said that I can ring up the finance company and tell them that I want to pay off the finance (which I would use my existing cash to do) and that I would only have to pay a bit of interest.

Can someone with experience of this please confirm/explain in more detail. I don't want to do it if when I call up to pay off early they end up charging me virtually all of the interest or removing the deposit contribution or something similar. But it does seem an appealing way to get an extra £1500 off the cost.

I've never done this before so am looking for advice on the best way to do it, (ie during the 14 day cooling off period, or after the first monthly payment has gone through, only when the moon is full etc etc) and also the best terminology to use when speaking with the finance company ie do I "withdraw", or "settle" etc etc.

Thanks very much in advance for your help and advice.

Enjoy your weekend.

Face

McKneff · 19 August 2017 at 4:45PM

Rubbish. They will be getting a kick back.
Tell them you want the same deal with cash or you go to yhe next nearest dealer . I got the deal as aa cass customer last year...
Annoying when they take advantage .
Ring up, dont say who you are and ask to see what deals there are.
And if you go ahead haggle, haggle, haggle, kia carpets, yank of fuel and cash off too. If no, tell them you will thibk about it and come back tomorrow

McKneff · 19 August 2017 at 4:46PM

I wish i was there to come with you lol...

I have a Kia Venga

Nearlyold · 19 August 2017 at 4:50PM

If you exercise your right of withdrawal from the finance within the 14 day cooling off period you will only be charged interest for the period you have owed the money and you won't have to pay the arrangement and option to purchase fees. If you settle the loan after 14 days you will be charged interest for the period you have owed the money PLUS arrangement and option to purchase fees and an additional 60 days interest. In neither case will you be asked to refund the deposit contribution.

Face · 19 August 2017 at 4:54PM

@ McKneff

Thank you very much for taking the time to reply.

I appreciate what you are saying, but the extra is from the finance company (and not from the dealer) as an incentive to take the finance and the dealer will not take any further cash off (the list price is £23915 and I have got them down to £19230 so approx 20% discount - which is a lot cheaper that I had from various Carwow offers across the country).

@ Nearlyold

That sounds like what the dealer was suggesting. Do you have any first-hand experience of the finance "arrangement" that the dealer was talking about? Or any links to websites for further information about this? I don't want to make a costly mistake :-)

Thanks again,

Face

Nearlyold · 19 August 2017 at 5:08PM

Yes its quite a normal offer to be made by the dealer. There is nothing special about the finance arrangement its just a normal PCP. The rules surrounding withdrawal within 14 days and early settlement are set out in the European Consumer Credit Directive as incorporated into UK law.

The dealer and salesman get incentives from the manufacturer and finance company to sell PCPs and they are using that incentive to subsidise your deal. It works for them until the manufacturer/finance company smells a rat and the commission is clawed back which is why they sometimes tell customers not to repay the loan for 6 months as that gets them past the commission claw back period -but you don't have to worry about that!

jonesMUFCforever · 19 August 2017 at 5:18PM

I agree with Nearlyold unless there is a restriction about repayment in the terms of the contract (read the terms before signing!!) you can pay as soon as you like.
Personally I would wait the 14 days in case there is a clause saying you would have to pay the £1500 back but even if this happened you wouldn't be any worse off than if you had paid cash (other than a few days interest).

System · 20 August 2017 at 1:22AM

Does it have to be new? The best bargains are the 2 year old ones where some other sucker has paid for the biggest chunk of depreciation.

Face · 20 August 2017 at 2:12PM

Hi again, everyone

I've just been back to the dealer to return the demo car and had another chat with the sales guy regarding the finance "deal".

He has told me that if I withdrew/cancelled during the 14 day cooling off period then I wouldn't get the extra £1500 discount from the finance company because until after this 14 day period the finance agreement isn't in place (or words to that effect, I think) and that I would have to wait until I had made at least one payment and then I could settle and have to pay 58 (he thinks) days interest.

Obviously, if possible, I would rather do it all in the 14 days cooling off period to avoid paying any interest but I just wanted to ask again to get your kind advice on what the dealer has just said - just in case he is worried about the clawback etc.

Sorry to harp on like an old lady but this is the first time I have been faced with this situation and I don't want to do or say the wrong thing which could cost me the £1500 discount.

Thanks again everyone,

Face

iolanthe07 · 20 August 2017 at 3:48PM

I bought a Kia Rio last week and was intending to pay cash, but the PCP deal was so good that I went with it. The £1500 manufacturer's contribution together with one from the dealer of £500 came to much more than the interest payable. I did put down the maximum allowed deposit. I will probably buy the car outright in three years.

Geoff1963 · 20 August 2017 at 4:01PM

Ask the salesman what cut he gets from you taking the finance ; and suggest that if he gives you the interest, you'll let him earn his bonus.

Kia car purchase - advised to take finance instead of cash purchase!

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