Question on car finance agreement - early settlement

TrevUK

Morning all,

Took out a finance agreement on a new Audi A1 on Sunday via Audi Finance. We took advantage of the £750 discount they gave us for doing it knowing full well that we would settle off the agreement straight away. We know the salesman so he knew what we were doing. Now he said that we would be able to settle the agreement off after a month and all we would pay is the interest on the first payment which i think is fine. I assume as we then make the payment, he then gets to keep his volume bonus/commission or whatever it might be for doing the deal. We then get the £750 off, albeit paying some interest on a payment.

However, somebody at work has just planted a seed in my head that we then have to pay off all the interest over the period of the agreement.

I haven't got the finance agreement to hand, however I've been googling and it looks like i could 'cancel' the agreement rather than 'settle' within 14 days and not pay any interest. Although what i don't know for sure if is i get to keep the £750 or that gets clawed back.

Any thoughts would be helpful.

Tiddlywinks

If you cancel then the £750 will probably become payable as it was a conditional discount based on you taking the finance.

As to interest, you need to read the agreement - most car finance agreements also have 'admin' fees as well.

TrevUK

I am convinced that the salesman (we know him well, neighbour) said that we would only have to pay the interest on the first payment. I have no issue doing that, as long as that's the only interest we pay as it still works out well for us. He also said that there wouldn't be any charges for settling.

Now if there are charges, where abouts do we stand in terms of going back to the dealership/salesman?

Buzby

These deals are usually only the amount of interest actually used - your pal is confusing it with lower-end deals. That said, what you pay is covered by your documentation terms - you have read them?

You are hound by these, not by what you were told.

TrevUK

It was my girlfriends car and I haven't had a chance to read the documentation yet, but when I picked up the car with her i took the salesman aside and above is i'm sure what he confirmed with me.

Understand that we're bound by the documentation, just it's thrown me slightly but I do think the guy at work has just confused the issue. It's just made me double think exactly what the guy said.

So you think she'd only pay the interest on the first payment, and then could just pay off the agreement without having to pay the interest on the rest of the agreement? I will go over the documents this evening and try and work it out. Failing that, call customer services.

Apples2

Ignore the salesman, neighbour or not, he is a used car salesman. He would rip off his own mother if it meant a small bonus to him.

Talk to the finance Company only, it is normal in this situation to cancel the finance within the 14 days and pay for the car seperately, the sale price has already been agreed.

The Finance Company will explain any early termination policy, not the salesman.

saverbuyer

There are other post on the forum on this exact deal. It seems common enough.

Do it within 14 days, not 30.

You keep the £750 discount.
http://www.a1-forum.co.uk/a1forum/viewtopic.php?f=7&t=7238&start=10

http://a1-forum.co.uk/a1forum/viewtopic.php?f=7&t=6500&start=50

TrevUK

Excellent, thanks!

Good to know i'll get to keep the discount, which should be the same for the 5 years free service.

Will be on the phone to Audi Finance later this evening to cancel the finance requirement.

National_Debtline

Hello there. The following information is based upon the credit agreement being a consumer credit regulated agreement (almost certainly based upon the information provided). You can cancel the credit within 14 days. You must repay the credit and any accrued interest within 30 days of giving notice of the withdrawal.

If the credit was under a hire-purchase agreement (HP), the Title will pass to your girlfriend as long as they comply with the repayment requirements. Withdrawal can be oral or in writing. Experian has confirmed that they will remove the record of the agreement on their credit referencing system. Other credit reference agencies may mark the agreement as repaid.

I hope you find this information useful!

David @ NDL.

TrevUK

Thank you David, it is a regulated agreement.

SeanG79

If she cancels then you pay back only what you borrowed plus interest for the days she had the usage of the "banks" money. Provided it is a regulated finance agreement.

If you let the 1st direct debit go through, when she settles, she will pay all the interest up until that day plus ±58 days interest, provided its a regulated finance agreement.

With the 1st option, the salesman will probably lose his incentive bonus, whereas with the 2nd option he will probably keep it. Either way you should be able to keep the discount. this seems to happen quite often with new car sales.