pcp benefits - warranty/service plan/breakdown cover

boj27

Hi all,

My girlfriend is taking out a VW pcp contract for a new car next week. if the car is bought on pcp it nets you 2 years warranty, 2 free services and 2 years free breakdown cover. The issue is the APR is high because it is on a used car, so she has applied for a loan @ 3.5% APR through Lloyds bank and been accepted and has the money in her account, so her plan was to cancel the deal within the 14 day cool off period. does anyone know if they can revoke the warranty and other benefits?

In my experience, last time i bought a brand new car through VWFS I was able to cancel my PCP deal and keep the £2000 deposit contribution I got for doing PCP last time, and they didn't try to take it back or anything - I am just hoping they can't do the same in this case?

Aran76

Best bet is to ring VW and ask them whilst everything is still in the cooling off period. Does the loan cover the whole cost of the vehicle? As a PCP will only be for part of the cost.

DrEskimo

Aran76 said:

Best bet is to ring VW and ask them whilst everything is still in the cooling off period. Does the loan cover the whole cost of the vehicle? As a PCP will only be for part of the cost.

PCP is for the whole cost. You just defer a large portion to the final payment. You're still borrowing the entire cost.

If you ask VW they will say it needs to run for [insert random number of months] otherwise they are revoked. For deposit contributions and servicing I doubt there is any mechanism for withdrawing it. I did hear of one poster who said they needed to let the contract run for an extended warranty though.

I would read the terms and conditions.

Grumpy_chap

It is also possible to try to negotiate the APR down to a lower number.  May be too late now.  What do the T's&C's say about early redemption?

GolfR

Hi all, I’m the one buying the car. I can’t find any t&c’s online and there weren’t any included in the PCP quote email apart from a bare summary of the main t&c’s. I’ll ring them tomorrow to find out but if I was to go down this route would there be any penalty I have to pay if I did cancel in the 14 day cooling off period or if I was to pay it off after, for example, two months? I’ve got the loan already so I don’t need to take the pcp but the two years warranty and two free services is very appealing as opposed to one years warranty with buying it outright. Thanks.

DrEskimo

GolfR said:

Hi all, I’m the one buying the car. I can’t find any t&c’s online and there weren’t any included in the PCP quote email apart from a bare summary of the main t&c’s. I’ll ring them tomorrow to find out but if I was to go down this route would there be any penalty I have to pay if I did cancel in the 14 day cooling off period or if I was to pay it off after, for example, two months? I’ve got the loan already so I don’t need to take the pcp but the two years warranty and two free services is very appealing as opposed to one years warranty with buying it outright. Thanks.

I've never seen early settlement fees so the only difference between settling it early or later would be the interest cost to borrow the money for however long you keep the agreement running.

Rather than ask whether whether you still get the benefits of you settle early (you will likely get told you have to have it open for X months) you could ask what the procedure is for getting confirmation of the benefits. The deposit contribution is obvious and immediate (the amount you borrow on the PCP will just be lower) and the free services are usually indicated on their systems. It's the warranty bit that I am not sure on.

GolfR

DrEskimo said:

GolfR said:

Hi all, I’m the one buying the car. I can’t find any t&c’s online and there weren’t any included in the PCP quote email apart from a bare summary of the main t&c’s. I’ll ring them tomorrow to find out but if I was to go down this route would there be any penalty I have to pay if I did cancel in the 14 day cooling off period or if I was to pay it off after, for example, two months? I’ve got the loan already so I don’t need to take the pcp but the two years warranty and two free services is very appealing as opposed to one years warranty with buying it outright. Thanks.

I've never seen early settlement fees so the only difference between settling it early or later would be the interest cost to borrow the money for however long you keep the agreement running.

Rather than ask whether whether you still get the benefits of you settle early (you will likely get told you have to have it open for X months) you could ask what the procedure is for getting confirmation of the benefits. The deposit contribution is obvious and immediate (the amount you borrow on the PCP will just be lower) and the free services are usually indicated on their systems. It's the warranty bit that I am not sure on.

I asked the salesman that I’m dealing with if I would lose the benefits if I was to pay it off early and his reply was ‘no but as a dealership we prefer you to keep it open for at least six months’. So I know I can pay it off early and I could manage paying the extra for a few months so I may go down this route. Thanks for your help!

Grumpy_chap

OP may be interested in this thread
https://forums.moneysavingexpert.com/discussion/6174071/pcp-vw-financial-services-early-repayment-have-i-been-overcharged