Can a PCP car loan be paid off straight away without penalty??

smjxm09

Mercedes are offering a £1800 manufacturers contribution to anyone taking out a PCP agreement on some of their cars. Can I take out the agreement and then ask for a settlement price straight away or after say a month and pay the balance thus keeping the £1800 discount?

sinizterguy

Yes. You can.

Read the small print to make sure there isn't minimum time to remain committed.

Gaz83

It won't be without penalty, though - there will probably be a couple of days' interest and an arrangement fee that will need to be paid.

Nearlyold

Under the European Credit Directive legislation which came into effect 1st February 2011 you can withdraw from a credit card or loan agreement within 14 days of signing up to it. You must, however, repay the credit and pay interest for each day the credit was drawn down.


Please note that although it wouldn't matter to this OPs particular query withdrawing from the credit agreement does NOT cancel the purchase of the item bought with the credit - so its not a way of getting out a buying a car on HP due to buyers remorse for example.

audigex

You can definitely use it as a way to get discounts - often PCP/HP contracts will get you a better discount from the dealer, as the salesman or dealership may get a commission. I've even had it subtly suggested to me when I was buying a car with cash....

It's always worth checking what you can get otherwise, though: they may be offering £1800 "dealer contribution" but there's a good chance you could get £1800 off the price of the car anyway... I got over £4,500 off the list price of my last car, buying cash, and when I enquired they would've been perfectly happy doing the same deal on a PCP

smjxm09

Thanks for the info. There are some cracking deals around which are only valid with a PCP agreement. I contacted Mercedes Finance who said I could cancel without penalty and keep the discount.

I made the mistake of telling dealer one that I was going to do this as I wanted a second opinion so he withdrew the offer and suggested instead that I borrow £7,500 over three years via HP and cancel that after a few months but he raised the price of the car.

With dealer two I think I will just leave him in the dark and do the PCP deal and then cancel it on the 13th day of the cooling off period. I guess there is nothing he can do about it if I pay the settlement.

chanz4

check that the pcp deal allows, as most mercedez say you can never own