Paying of a Discounted Finance Deal

keithscott1

I'm seriously tempted in purchasing a new car to which the showroom price has been subsidised under a manufacturer-assisted finance deal. I'm not too pleased with the rate of APR that's part of this deal, but (in true MSE style!) I'm tempted in going ahead in applying for the deal and when it's all done-and-dusted, pay off the finance outright with a loan with an APR that's a hell of a lot cheaper than the manufacturer's APR. The manufacturers deal also the option to hand the car back after three years if I want another vehicle (subject to mileage limits).

Does anyone have experience of doing what I propose to do and if so, what are the pros and cons?

Cheers

Astaroth

Look at the early redemption penalties closely - I know of someone who tried to do what you wanted and there was no option of early redemption as even if you did the penalty took it to the full interest cost.