New car - PCP vs. Cash price

GrayHound200

Hi everyone,

I was talking to a dealer yesterday about buying a new car and the pricings he gave me were for PCP. Ideally, I want to sort out the financing of the car myself as I intend to keep the car for a long time and I want to minimise the length/interest of the loan, so I asked what the price would be for cash as some of the PCP deals have a manufacturer discount applied (£2500).

His answer/suggestion was to buy the car on PCP, and then simply ring the provider during the cool off period and cancel/pay it off.

Has anyone got any experience of doing this? Is it really that easy?


Thanks everyone

DrEskimo

Yea did it for a used car in Feb.

Haggled £300 off the list, but then used the PCP deal to get £1000 deposit contribution and 2 services.

I paid off most of it the next day, then let the remainder run for a couple of weeks before settling in full.

I'm sure you can probably settle the next day without issue, but dealers/finance company will tell you all sorts about having to let the finance run for 3/6 weeks/months etc. otherwise they claw back the contribution. I found nothing in my terms about this so ignored it, and haven't been chased...yet!

Paid about £19 in interest so not that fussed.

Night be worth looking into whether you need to settle, rather than cancel though.

sheslookinhot

Remember the dealer will be doing what's best for the dealer. A bank loan is likely your best option.

GrayHound200

He said it almost as if that’s what everyone does, but I’d never heard of it before. I suppose I just need to have a good read of the paperwork beforehand.

Thanks

DrEskimo

Yea check for optional purchase fees and early repayment fees.

What might make yours complicated is the need to have two loan applications for the same amount. I cleared mine just with cash, but you will have to get the PCP finance for the full amount (less any deposit) and then get a personal loan to settle the PCP loan....

Depending on your income and the price of the car, getting two loans may prove difficult. The lender of the personal loan won't know you are using one to consolidate the other just to haggle money off a car...

DUTR

GrayHound200 wrote: »

He said it almost as if that’s what everyone does, but I’d never heard of it before. I suppose I just need to have a good read of the paperwork beforehand.

Thanks

Not everyone but a large minority do, yes do read the paperwork, there maybe a minimum period but the settlement fee and interest may still equate to some sort of discount.

neilmcl

GrayHound200 wrote: »

He said it almost as if that’s what everyone does, but I’d never heard of it before. I suppose I just need to have a good read of the paperwork beforehand.

Thanks

It's a very common thing.

neilmcl

DrEskimo wrote: »

Yea check for optional purchase fees and early repayment fees.

Irrelevant if cancelling during the cooling period, no fees are applicable.

DrEskimo

neilmcl wrote: »

Irrelevant if cancelling during the cooling period, no fees are applicable.

Yea but the bit I have never had clarity on is whether finance companies are entitled to claw back the deposit contribution if the finance is cancelled as apposed to settled?

I read a few threads in the past that said it is settlement that needs to be done, not cancellation. It is only with cancellation during the 14 days where fees are non-applicable.

loskie

the finance co are not interested in either dealer or manufacturer contributions. They are just interested in the amount borrowed.

neilmcl

DrEskimo wrote: »

Yea but the bit I have never had clarity on is whether finance companies are entitled to claw back the deposit contribution if the finance is cancelled as apposed to settled?

I read a few threads in the past that said it is settlement that needs to be done, not cancellation. It is only with cancellation during the 14 days where fees are non-applicable.

I've never heard of a single incident where contributions have been clawed back following cancellation. I've even had a salesman confirm that this wouldn't happen, at least not with them.