Pushed towards Vehicle Finance

Lachlan

I’m looking to buy a new car and rocked up at my local dealership as a cash buyer. The dealership repeatedly pushed vehicle finance even though I don’t want or need it. I realise cash is no longer king! Obviously I don’t want to pay more for the vehicle by taking on the finance BUT is it possible for me to agree to the finance to appease the dealership (in the immediate term) and then cancel the finance agreement within 14 days without penalty?
I would want to keep the car so what would happen next? Would there be any form of financial penalty or will I just get an invoice for the original cost of the vehicle had I not taken out the finance?

Sanctioned_Parts_List

What sort of vehicle finance? Straight forward loan, buy now pay later, PCP, HP...?

Nearlyold

If you withdraw from the Finance Agreement within 14 days you pay back to the finance company what you borrowed plus interest accrued for the period the loan was outstanding. Lender can't charge any early settlement fee or arrangement or option to purchase fee.

martinthebandit

Last car I bought they offered £500 extra discount if I took out their finance and, after checking the early payment details carefully, I took out 5k of finance and paid the rest in cash.

I paid the finance off with no additional costs 3 days later.

sourcrates

Its simple, they are paid commision for each finance agreement they sign up, i hate the hard sell, and would go elsewere, but the choice is yours.

DCFC79

Lachlan wrote: »

I’m looking to buy a new car and rocked up at my local dealership as a cash buyer. The dealership repeatedly pushed vehicle finance even though I don’t want or need it. I realise cash is no longer king! Obviously I don’t want to pay more for the vehicle by taking on the finance BUT is it possible for me to agree to the finance to appease the dealership (in the immediate term) and then cancel the finance agreement within 14 days without penalty?
I would want to keep the car so what would happen next? Would there be any form of financial penalty or will I just get an invoice for the original cost of the vehicle had I not taken out the finance?

I would go elsewhere if it were me or just be more insistent you want to pay cash.

Don't feel pushed into getting finance if its not what you want.

System

Nearlyold wrote: »

If you withdraw from the Finance Agreement within 14 days you pay back to the finance company what you borrowed plus interest accrued for the period the loan was outstanding.

You don't pay interest if you cancel within the cooling off period.

DrEskimo

Be sure you are getting the best discount you can, using online brokers like CarWow, Broadspeed, OrangeWheels, Coast2Coast, etc.

Having said that, you may find that nearly new/used will save you a lot more still. There is very little additional value in new cars vs. used considering the cost increase. Extended warranties can be more than offset by the savings in upfront/depreciation costs.

However, you get the same hard sell for used as well with respect to finance. I bought a used car in Feb, and after only being able to negotiate £300 off the sticker price, I found that taking the finance option allowed me to get a further £1,000 deposit contribution and 2 free services, so in the end it did benefit me.

I chose to settle mine a few weeks later, as I was unsure whether a deposit contribution is recouped if you withdraw? In the end it only cost me £19 in interest so I wasn't too fussed!

Nearlyold

Tarambor wrote: »

You don't pay interest if you cancel within the cooling off period.

Sorry but that's completely wrong, where did you get that information from?

From the FCA Website

where the borrower exercises the right of withdrawal from a P2P agreement:
(a) the borrower must repay to the firm (on behalf of the lender) or the lender any credit provided and the interest accrued on it (at the rate provided for under the agreement); but
(b) the borrower is not liable to pay to the firm (on behalf of the lender) or the lender any compensation, fees or charges, except any non-returnable charges paid by the lender or by the firm (on behalf of the lender) to a public administrative body;

From VW Finance

Customers whose finance Agreements are covered by the Consumer Credit Directive have the right of withdraw from their finance Agreement. They have 14 days, starting from the day after they sign their finance Agreement to withdraw from the finance Agreement (but not the vehicle purchase). They simply inform their finance provider, who is entitled to charge a daily rate of interest as detailed on the finance Agreement until such time as the loan advanced has been settled. The customer must do this without undue delay and within 30 days of giving their notice of withdrawal.

From the Finance and Leasing Association "Specialist in Automotive Finance Qualification" course

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. In withdrawing from the finance agreement the customer does not, however, withdraw from the contract to acquire the vehicle, which must be paid for using other funds.

Gaz83

Tarambor wrote: »

You don't pay interest if you cancel within the cooling off period.

Er... yes you do

dealer_wins

Wow, dealerships no longer wanting "cash in the till", rather get a kickback for selling finance.

And we wonder why the UK has a personal debt problem!