Right to withdraw Car Finance

Instability

Cornucopia wrote: »

What kind of car/dealer are you dealing with?

We've just been looking around the local dealerships near us. Not got any specific one in mind at present.

DrEskimo wrote: »

If you settle within the 14days then you don't incur any interest. If you feel inclined to help the dealer, then you could always let it run a couple of months then clear it. It will mean paying a bit of interest, but the commission for the dealer would be safe. Worth checking with them.

Usually you can get some sort of deposit contribution and servicing by taking out finance with them, so I agree it's worth doing. Funnily enough I have just bought a car and it was actually cheaper to pay with cash than get it on PCP. Only about £100, but still odd....!

I guess I'm describing withdrawing rather than settling? I gather if I don't withdraw under the Right to Withdraw & decide to settle/pay early it incurs fees & may have a minimum period of interest charged, whereas if I withdraw from the finance we'd pay interest only for the few days it took between signing the agreement & the processing of the withdrawal - so would work out much cheaper.

Nearlyold wrote: »

Just to clarify the process and the fact that interest is usually charged :- 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.

For there to be no commission clawback for the dealer it'll be more like 6 months the customer would have to keep the finance in place. As an aside Finance companies also monitor the number of early settlements by dealer and where they suspect collusion between the dealer and the customer on the "I'll give you £X off if you take finance and keep it going for X months" basis its not unknown for them to start threatening legal action against the dealer.

That's what I was under the impression was the case. And with the interest only being for a maximum of 14 days worth, it wouldn't be significant amount, hence cheaper than settling the finance with early repayment, or buying with cash for a higher start price.

Nearlyold

Yes, you need to "withdraw" (within the 14 day window) not "settle"

YorkshireBoy

DrEskimo wrote: »

I see, so it's just that no fees or charges can be applied within the first 14days if the finance is withdrawn, but if settling withdrawing interest will still be payable based on a daily amount?

Yes. Mine was just over £3 per day on circa £12K (10.9% APR PCP).

I get different answers regarding the 'grace period' before their commission is 'safe'. Some dealers I spoke to recently suggested it was just 2-months, but I guess it may vary?

That was my problem too. The same dealership mentioned (at different times) figures of 2, 4, 6 (and to be absolutely sure, 7) months.

I was prepared to allow them their commission (salesman was a nice fella!), but the obfuscation the senior sales guys were employing got my back up. This, and the thought of up to £700 of my £1,500 contribution being lost, drove me into paying it off a couple of days after delivery.

They knew exactly what I was planning, because I was asking for sight of the finance agreement T&Cs before I'd leave a deposit, but probably took the view that any commission was better than no commission (mid-plate year, half-year end, and month end).

I was a little concerned about ongoing customer service and warranty work, but the car's been back twice for little things and I've been treated well. So much so that I've taken out a (heavily discounted) service plan with them.

DrEskimo

YorkshireBoy wrote: »

Yes. Mine was just over £3 per day on circa £12K (10.9% APR PCP).That was my problem too. The same dealership mentioned (at different times) figures of 2, 4, 6 (and to be absolutely sure, 7) months.

I was prepared to allow them their commission (salesman was a nice fella!), but the obfuscation the senior sales guys were employing got my back up. This, and the thought of up to £700 of my £1,500 contribution being lost, drove me into paying it off a couple of days after delivery.

They knew exactly what I was planning, because I was asking for sight of the finance agreement T&Cs before I'd leave a deposit, but probably took the view that any commission was better than no commission (mid-plate year, half-year end, and month end).

I was a little concerned about ongoing customer service and warranty work, but the car's been back twice for little things and I've been treated well. So much so that I've taken out a (heavily discounted) service plan with them.

Yea don't blame you...there is little love lost between me and franchised dealers...

My experience is that sales and service are so distinct that you can be forgiven for thinking they a completely separate companies. I got a better salesman from one dealer, but there servicing was atrocious, whereas it was the other way round at another dealer. I just use which ever one suits my needs....or increasingly, avoid them as much as humanly possible altogether....!

alk29

I'm pretty sure we had to agree to keep the finance for a minimum number of months to get the deal price (which was about 10% less than the cash price). However as it was also a 0% interest deal on the finance for 2 years it didn't really matter.

DrEskimo

alk29 wrote: »

I'm pretty sure we had to agree to keep the finance for a minimum number of months to get the deal price (which was about 10% less than the cash price). However as it was also a 0% interest deal on the finance for 2 years it didn't really matter.

I got offered a 0% HP deal....however was told they couldn't do the 0% finance at the discounted price I could get if I bought cash. The price they would have to sell it to me to get the 0% HP deal was some £4,500 more!

Most expensive 'free' thing I have ever been offered....

iolanthe07

I saved nearly £3k last November by taking out PCP. The dealer asked me to let it run for four months before paying it off which I was happy to do. I did incur a little bit of interest, but the dealer was so helpful (and stunningly pretty!) that I was happy for her to have her commission.