PCP contribution

jacobi1

I've read on the forum various (mainly negative) views on PCP deals, but have an interesting option.

I'm buying a new car, and the manufacturer will make a significant contribution to the sale price if a PCP is taken out.

The PCP contract allows for cancellation within 14 days.

Assuming the 'advance payment' is the sum of my cash payment + the manufacturer contribution, and the 'Amount of credit' is the balance to make up the 'Cash price', then if I cancel, surely I jst have tto pay off the 'Amount of Credit' and can therefore pocket the manufacturers contribution and then own the car outright.

Or am I missing somethiing?

motorguy

jacobi1 wrote: »

I've read on the forum various (mainly negative) views on PCP deals, but have an interesting option.

I'm buying a new car, and the manufacturer will make a significant contribution to the sale price if a PCP is taken out.

The PCP contract allows for cancellation within 14 days.

Assuming the 'advance payment' is the sum of my cash payment + the manufacturer contribution, and the 'Amount of credit' is the balance to make up the 'Cash price', then if I cancel, surely I jst have tto pay off the 'Amount of Credit' and can therefore pocket the manufacturers contribution and then own the car outright.

Or am I missing somethiing?

Yup. That's perfectly fine to do that.

jimmy_cricket

I have just done this very thing. Took the manufacturer contribution and credit, paid credit off within the 14 days and kept the discount.

The dealer told me that if I paid it off within the first 14 days, I would have to pay the contribution back, but did not believe this (third lie I caught them out on) so phoned the manufacturer finance people who confirmed that the contribution did not have to be paid back

marlot

You're not missing a thing - I've done this a couple of times.

You may have to pay a small amount of interest for the few days you've had their money - I did the last time.

daveyjp

Don’t forget also to also check out brokers for discounts on the car you are looking at and negotiate accordingly.

loskie

the dealer will try to put you off doing this as they will likely lose a chunk of commission however do not believe a word they say. Audi's PCP also comes with a service package included, despite what the dealer said settling the PCP immediately does not void that.

One of the benefits of PCP to the dealer is that in some ways you are trapped into the brand. As a consumer they are a bad choice unless managed very carefully and with full understanding.

neilmcl

jimmy_cricket wrote: »

I have just done this very thing. Took the manufacturer contribution and credit, paid credit off within the 14 days and kept the discount.

The dealer told me that if I paid it off within the first 14 days, I would have to pay the contribution back, but did not believe this (third lie I caught them out on) so phoned the manufacturer finance people who confirmed that the contribution did not have to be paid back

TBH, that's the first time I've heard a dealer come out with that one, in fact I've had dealers admit the exact opposite. It never happens.

Also, one point to make is there's a difference between exercising your right to cancel the finance within 14 days or simply settling the finance. In theory dealer finance contributions could be asked to be repaid if cancelling, but in reality I've never heard it happening. There is no risk of this if settling the finance however interest will be payable, but this will be a tiny amount at this stage.

jacobi1

Many thanks all. Good to know others have done this.

Also interesting about the service package

It was the question of whether the manufactrer could/would claim back their contribution in some way - though reading the contract I couldn't see how. So nice to hear it works. But if "In theory dealer finance contributions could be asked to be repaid if cancelling," is it better to wait till day 15 and then settle the finance?

One further question - when you take out PCP finance, who is registered as the owner? Me or the finance company? By doing this, would I become the 2nd owner?

LandyAndy

jacobi1 wrote: »

Many thanks all. Good to know others have done this.

Also interesting about the service package

It was the question of whether the manufactrer could/would claim back their contribution in some way - though reading the contract I couldn't see how. So nice to hear it works. But if "In theory dealer finance contributions could be asked to be repaid if cancelling," is it better to wait till day 15 and then settle the finance?

One further question - when you take out PCP finance, who is registered as the owner? Me or the finance company? By doing this, would I become the 2nd owner?

Owners aren't registered, keeper's are. You would be the first keeper.

neilmcl

jacobi1 wrote: »

One further question - when you take out PCP finance, who is registered as the owner? Me or the finance company? By doing this, would I become the 2nd owner?

For insurance purposes you are not the owner, the finance co. is, until the finance is settled. However you will be the 1st registered keeper and this will remain so until you sell on the car. As stated, there's no such thing as a registered owner.

jacobi1

neilmcl wrote: »

For insurance purposes you are not the owner, the finance co. is, until the finance is settled. However you will be the 1st registered keeper and this will remain so until you sell on the car. As stated, there's no such thing as a registered owner.

Thats what I thought. However, the insurance policy I'm looking out says:

4. New car cover
If your car is less than one year old and you are the first and only registered owner, we will replace it with one of the same make and model if it has:
•
been stolen and not found; or
•
suffered damage covered by thepolicy and the cost of repairing is more than 60% of the last United Kingdom list price, (including taxes)

Is this jst a badly drafted insurance policy, or should I consider Gap insurance.....:huh: