cancelling PCP finance early or immediately

newfoundglory

Hi

I'm looking at ordering a brand new car.

I don't need or want PCP finance, but recognise that there are some very attractive deposit contributions to be had with PCP. However, whats the 'cost' of cancelling PCP early?

A dealer I saw today claimed there wasn't a cost - that the interest is just recalculated. I felt they were being very sketchy and were trying to hide something. I haven't seen any T&C's, and they were not keen to show me any when asked. I am now trying to obtain the terms from the finance company.

It seems you can completely withdraw from a PCP agreement within the first 14 days. Can you pocket the deposit contribution and clear the finance in the first 14 days? What happens after 14 days?

The last time I purchased a (used) car I took out a small amount of hire purchase to secure a discount, but things seem to have changed with PCP.

Grateful for any thoughts

loskie

Audi and Volvo dealers have both told me you can take out PCP to gain the benefits; free servicing and deposit contribution then be cancelled on delivery with a calculation of any (minimal) interest to pay. Some salesmen may not like it as there may be a lost commission element.

Iceweasel

A PCP is a legal agreement - so one must be very careful to use the correct words when talking about how to finish one.

It's all a matter of word play as far as I can see.

A Finance Co. might well be perfectly entitled to demand that you return any additional benefits if you were to cancel a PCP.

One would be foolish to do that.

What you do is settle the PCP early - very early - then there can be no alteration to the entitlement to end it.

Last month I signed up to a PCP which gave me a 'contribution' of £2000 (no-one says 'discount' - ever)

I collected the car on a Thursday and settled early on the next Monday. paying interest of £32.00

No problem at all - no questions and everyone happy - especially me.

I did ask the salesman if this 'dodge' was foolproof and was assured there were hidden tricks in it. He very much encouraged me to take the finance (which I didn't really need) and also said once I signed up to it his small commission was assured.

He did stress strongly not to use the C word - cancellation - when I phoned to settle.

neilmcl

Iceweasel wrote: »

A PCP is a legal agreement - so one must be very careful to use the correct words when talking about how to finish one.

It's all a matter of word play as far as I can see.

A Finance Co. might well be perfectly entitled to demand that you return any additional benefits if you were to cancel a PCP.

One would be foolish to do that.

I disagree. There's nothing "foolish" about exercising your statutory rights to cancel a finance agreement, if done correctly. Most associated benefits to the finance deal, dealer/manufacturer contributions etc, will be between yourself and the car seller and nothing whatsoever to do with the finance company.

Iceweasel

neilmcl wrote: »

I disagree. There's nothing "foolish" about exercising your statutory rights to cancel a finance agreement, if done correctly. Most associated benefits to the finance deal, dealer/manufacturer contributions etc, will be between yourself and the car seller and nothing whatsoever to do with the finance company.

Perhaps I wasn't clear.

I meant that one would be foolish to cancel and lose the extra contribution - rather than settle early and keep it.

I had dealer contribution, manufacturer contribution and then the finance company contribution on top of that.

I managed to get a total discount of around 22.5% - the £2000 was just a part of it.

I agree completely that the dealer and manufacturers contribution has nothing to do with the finance company at all.

newfoundglory

See this is where I get lost, because i've read this both ways now; that you can withdraw within 14 days and keep the deposit contributions, and also that it may be more sensible to settle after 14 days.

Anyway, i guess the solution is to read the t's and c's

Ultimately, a deposit contribution isn't a discount - it forms part of the customers finance deposit.

I'm thinking that unless the contract specifically states you must keep the PCP for a length of time to keep the benefits (which doesn't happen), it probably doesn't matter if you withdraw (legal right) or settle - you keep all the benefits either way. Albeit from a customer perspective it would be much cheaper to withdraw within 14 days