Car Dealer Increased APR!

BigMac79

Recently went along to a Citroen dealer with my ex wife as she wanted a C4 Grand Picasso. We had found a nice looking and reasonably priced used one online at this particular dealer. After negotiation dealer quoted £350 deposit, £231pm on 4 year pcp at 8.9% apr.

Today they say Citroen finance have maxed the advance and so the deposit needs to be £2995 total. That’s fine she will do that. But the payment only dropped by £31pm. When I questioned it I got a lot of bluster about the finance company increasing the rate to 13.1% apr something about the dealer paying a subsidy at 8.9% which they were no longer willing to pay and no real answer.

Can they do this? Surely lending less money based on affordability but then increasing the rate would be counter intuitive. They could have kept the rate the same and asked for an extra £1300 or so to achieve the same payment. Is the dealer pulling a fast one? It seems to me that they have re-proposed it with the higher deposit but increased the rate so that they get more commission from the finance company. Particularly in light of the waffle about "subsidies".

daveyjp

Probably a fast one, hoping you won't notice.  You have noticed and I'd walk away.  Playing with all the figures in a PCP to confuse buyers is a well known tactic.

I'd also advise not to buy a used on PCP, especially over 4 years.

The warranty will be long gone and you will potentially be left with paying for expensive repairs and a monthly payment on a car you are renting.

DrEskimo

As above. Getting a low rate personal loan with a slightly higher deposit would probably amount to a similar monthly payment, and will save you a considerable amount in interest to boot.

Not that I would buy from the same dealer....

Grumpy_chap

This is the dealer trying to inflate the cost of the car after an attractive windscreen price to get you, or whoever, through the door.  Rather underhand.

Navigator123

Report to Trading Standards and walk away.
If they do this before you purchase the car just think what they will be like if you have a problem after purchase.

kangoora

When I last logged on to my TSB account they were offering personal loans starting at 2.8%. This is a mile away from 8.9% and 13.1% is just ludicrous.

Whether you could get the headline rate depends on a number of things but I suggest you take a look around before committing to any dealer finance, especially on a second hand car.

Markneath

I agree report to trading standards and walk away, you know the garage or salesman cant be trusted so a good time to walk away.