Why are my elderly friends bullied into credit deal?

AnotherJoe

neilmcl wrote: »

No, he may well have cancelled it. Despite the fear mongers most dealer/manufacturer contributions are honoured when cancelling finance during the 14 day period. I was even told (unofficially) I could do that by the finance guy at a dealership on my last purchase.

No intentional fear mongering on my part.
So whats the difference and why cancelling and pay whats due, rather than settling and paying whats due, when the former may risk any discount?

AnotherJoe

chiny wrote: »

Well... as an old git, I was expecting to buy my new car with cash but clearly that is so last century. On Carwow, checking 4 separate cars (20 prices) gives, without exception, a cheaper price with "finance".

Normally I would just look at the final cost payable as (a) cash (b) finance, then go for the lowest outturn cost but maybe I am missing the point. What is "finance" anyway in this context - PCP ?

Fascinating thread; thanks to all contributors.

I'd say you are, if you intend to settle the loan immediately (eg within a few days) since the final amount paying on credit is immaterial as you wont pay that.

Yes its generally PCP. Though my last one was HP i believe. I'm not really sure what the difference is they both looked the same financially, eg with a lump sum payment at the end. Unless PCP is just a type of HP?

bod1467

Is PCP not a form a lease arrangement (includes servicing etc.) that gives an option to buy?

neilmcl

AnotherJoe wrote: »

Yes its generally PCP. Though my last one was HP i believe. I'm not really sure what the difference is they both looked the same financially, eg with a lump sum payment at the end. Unless PCP is just a type of HP?

That is exactly what it is, PCP is just another type of HP, the difference between PCP and traditional HP is that you pay off the whole value of the car and finance over the term and the car is yours, no balloon payment.

neilmcl

bod1467 wrote: »

Is PCP not a form a lease arrangement (includes servicing etc.) that gives an option to buy?

As above, it's another form of HP where the balance is deferred to the end of the term.

Generally it wont include servicing unless you pay extra for a fixed period service agreement.

Hotspur

An example of the discount that is available by paying cash from www.carfile.net

FORD FOCUS Small Hatch
1.0 EcoBoost 125 Zetec 5dr Petrol Manual 108g/km
List Price £19,345.00
Our Price £15,684.65

More examples
http://www.carfile.net/business/ford-focus-small_hatch-car-purchase

I used this business as an example as I am a previous customer. I have no financial interest in this business.

H

chiny

AnotherJoe wrote: »

No intentional fear mongering on my part.
So whats the difference and why cancelling and pay whats due, rather than settling and paying whats due, when the former may risk any discount?

I'd guess that:
(1) Cancelling within the statutory 14 day cooling off period would mean the finance agreement was effectively never in place. No fees nor interest would be payable.
(2) Settling the finance post-14 days would mean the finance agreement was active and fees/interest would be payable.

"Risk" is probably the correct word; the individual contract documents would have to be checked to be sure that the discount (oops I mean deposit contribution) could not be clawed back. Even if such words exist, enforcement could be a problem and not worth chasing, unless everyone does it. You might be unwelcome at the dealer for some while if a commission is lost this way.

IANAL.

chiny

Hotspur mentions Carfile (thanks), so I took a look. Ah yes, a cash discount... but hello... plastered in a red box, I was presented with:

WE ADVERTISE CASH PRICES BELOW BUT PLEASE DEDUCT £650(ACTIVE MODELS EXCLUDED) IF YOU WISH TO TAKE OUT TOYOTA PCP FINANCE WITH OUR DEALER.

So, yes a cash discount but even keener with finance

Hotspur

That's correct chiny.

I kept it simple to show what cash discount is available on a Focus but manufacturer finance offers are often available on many (but not all) cars based on the discounted price.

Biketrials08

hollie.weimeraner wrote: »

It depends on the deal.

I bought a Focus and had a large discount with 12 months finance. I had to pay 6 months worth of payments before I could pay it off but it was well worth the finance package

You could have still paid it off right away, but you may have had to pay the equivalent of the six months payments (if this is what was written in the contract).