PCP or Finance - I made the wrong choice!

ed67812

I purchased a new high spec Corsa the other day. I am entirely happy with the car and the fact that I have purchased new. I never treat myself and have always had bangers despite working hard and always doing OT. Buying new was a considered decision accepting the arguments about depreciation etc. I purchased no expensive add-ons (overpriced GAP or paint protection etc).

However, I have massively messed up by buying the car on PCP.

Total price of the car (less hefty negotiated discount and increased dealer deposit contribution) of £13000.
I paid £300 deposit and so financed £12700, via 35 payments of £213.27. There are also 2 x £149 credit arrangement fees at the start / end of the finance.
The Guaranteed Future Value/ Final Payment on the car is £6037. The interest rate on the PCP 2.84% and APR 4%.

I now realise that I could have got a straight 5 year finance deal at 0% from Vauxhall with no fees or deposit. Financing the full £13000 for £216.67 a month for 60months. Although the monthly payments are slightly higher initially, this would more than make up for the fact that on my current deal, financing the final payment over 2 additional years would be £251.54 (even if by some miracle I found a 0% loan).

In short, I've overpaid a fair whack in opting for PCP which has no advantages over finance. In short, feel free to call me a moron & learn from my mistake.

Moneysaving is normally my thing; I'm going to go and sit on the naughty step for a long time! :eek:

nelly12

To be fair you wouldn't necessarily have got the same level of discount on the 0% program from Vauxhall so I wouldn't worry. You have a great PCP rate there so looks a good deal.

ReadingTim

Surely you've only made the wrong choice if you want to keep the car after the end of the PCP term, as this article explains, whereas you're simply paying a premium for lower monthly repayments or the flexibility to hand the car back after 3 years/trade in for a new one.

As you don't say what the long term plan for the car is, you don't know you've made the wrong choice. Alternatively, you're simply paying a bit more for future flexibility...

poppasmurf_bewdley

If you are still within the 14 day cooling off period, could you not cancel the PCP deal and take the Vauxhall interest free deal?

But £13k for a Corsa!!!!!!!!!!!!!!!!:eek::eek::eek:

verityboo

A few years ago we enquired about a 0% deal on a Vauxhall and was told you had to pay list price to get it (the high price paid for it) The saleman said it would be cheaper to get a discount and for them to arrange a normal HP agreement with interest

Nearlyold

poppasmurf_bewdley wrote: »

If you are still within the 14 day cooling off period, could you not cancel the PCP deal and take the Vauxhall interest free deal?

But £13k for a Corsa!!!!!!!!!!!!!!!!:eek::eek::eek:

To cancel the finance within the 14 day cooling off period you have to pay the finance off it's not just a matter of going back to the beginning and starting the deal again

poppasmurf_bewdley

Nearlyold wrote: »

To cancel the finance within the 14 day cooling off period you have to pay the finance off it's not just a matter of going back to the beginning and starting the deal again

It is perfectly easy to cancel the finance within the 14 day cooling off period. All that needs to happen is the finance company can recall any payment it has made to the dealer, the agreement is cancelled, and the OP will need to renegotiate with Vauxhall Finance.

The problem may arise that, as has been pointed out above, the dealer may not wish to provide such a large discount on an interest free credit deal.

But, if the dealer has agreed to sell at the price agreed, the OP will have a good case to keep it at that price.

Nearlyold

poppasmurf_bewdley wrote: »

It is perfectly easy to cancel the finance within the 14 day cooling off period. All that needs to happen is the finance company can recall any payment it has made to the dealer, the agreement is cancelled, and the OP will need to renegotiate with Vauxhall Finance.

The problem may arise that, as has been pointed out above, the dealer may not wish to provide such a large discount on an interest free credit deal.

But, if the dealer has agreed to sell at the price agreed, the OP will have a good case to keep it at that price.

Yes that would be easy if the dealer agrees to allow the finance company to recall the payment but would not think that very likely- why would they? as far as they are concerned the deal is done and the customer has no right to cancel the purchase.

poppasmurf_bewdley

Nearlyold wrote: »

Yes that would be easy if the dealer agrees to allow the finance company to recall the payment but would not think that very likely- why would they? as far as they are concerned the deal is done and the customer has no right to cancel the purchase.

The dealer wouldn't have a say. The Finance Company would just tell them the deal has been cancelled within the 14 day cooling off period (required by law). The deal to buy the car isn't called off, just the method of finance.

Nearlyold

That's not how it works, the customer has to repay the borrowing plus any accrued interest within 30 days after giving notice of withdrawal.

The 14 day period begins the day after the date the agreement is made (signed by both parties) or the day on which the consumer receives either a copy of the executed agreement (or confirmation of execution in some cases) whichever is the later. Notice of withdrawal can be given in any way and, if the consumer does withdraw, he must repay the credit and any interest that has accrued for the time that he has had the credit within 30 days. It does not, however, cancel or withdraw from the customer's agreement to acquire the car.

ed67812

But £13k for a Corsa!!!!!!!!!!!!!!!!

I would have said the same, but I do like it. Like I say, I'm entirely comfy with the car itself, the fact I actually purchased new, the top line price etc.

The dealer wouldn't have a say. The Finance Company would just tell them the deal has been cancelled within the 14 day cooling off period (required by law). The deal to buy the car isn't called off, just the method of finance.

My understanding is that there are two separate deals;
1) The agreed car sale with Vauxhall sales
2) The agreed finance arrangement with Vauxhall finance (not actually called Vauxhall finance, but they are a sister company).

I am within the 14 days cooling off period for the finance so I could get out of that easily, but obviously I've still got to pay for the car. the finance company own the car in a PCP and if I pull out of the finance arrangement, I have to pay them for the car.

I will speak to Vauxhall finance but there is absolutely no incentive for them to move me onto a cheaper payment method.

A few years ago we enquired about a 0% deal on a Vauxhall and was told you had to pay list price to get it (the high price paid for it) The saleman said it would be cheaper to get a discount and for them to arrange a normal HP agreement with interest

As has been suggested, perhaps I haven't overpaid as much as I thought as I have also been told elsewhere that the discounts available for 0% finance are much lower than for PCP. Vauxhall will either make their money through car sales or finance. (if that's right, it makes me feel a bit better). Any former car sales people would know?