We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
We're aware that dates on the Forum are not currently showing correctly. Please bear with us while we get this fixed, and see Site feedback for updates.

Change/cancel car finance loan

Hi, I purchased a used car (approx £12,000) and will be collecting it shortly, the dealership applied for finance (also putting down a £3500 deposit) and its come back with a fixed sum loan agreement at 10.9%apr. I’ve since done a personal comparison on here and have 95% chance of a personal loan for the same amount for 2.8%.

 I’m still within the 14 day cooling off period, would it be advisable to either talk to the dealership to see if they will negotiate, cancel the existing fixed sum loan (within or after 14 days) or take out a new personal loan to pay off the existing fixed sum loan? (again within or after the cooling off period?)

I can’t see any penalties/fees in my paperwork and as mentioned above, I’m still within the 14 day cooling off period. 

Many thanks

Comments

  • Is the 2.8% guaranteed or representative? you most likely will need to do a full application to confirm the APR
    FTB - April 2020 
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 31 January 2022 pm31 2:54PM
    You'd also need decent affordability to be able to carry both lots of finance at once.

    If you're currently being accepted at 10.9%, further borrowing, especially at a decent rate could be something of a stretch for you.
  • DrEskimo
    DrEskimo Posts: 2,384 Forumite
    Seventh Anniversary 1,000 Posts Name Dropper
    95% chance is the chance of being accepted for a loan, not of being accepted for a loan at specifically 2.8%.

    There is rarely a way to negotiate the secured HP finance on the car, so either you cancel and gamble on getting approved for a lower rate through unsecured borrowing, or try and get a better unsecured rate and keep the car finance and hope you can still get a competitive rate with the additional borrowing still on file.
  • MalMonroe
    MalMonroe Posts: 5,783 Forumite
    Ninth Anniversary 1,000 Posts Name Dropper Photogenic
    You would lose nothing by having a discussion with the dealership. See what they say. I took out a PCP agreement with my nearest Toyota dealership three years ago, was given 0% finance for two years and then saw a car on their website that was exactly the same price with fewer miles on the clock and it was two years younger than the one I'd signed up for.

    I went down (but now I'd phone, given that coronavirus is still with us in spite of government urges for us to get on with life as normal) to the dealership and had a discussion with the salesperson and the accountant and my wish was granted. All done within the 14 day period. 

    I know it's a different scenario to yours but the point is if you try to negotiate with them within the cooling off period they may be willing to do as you ask. In my case they didn't make anything out of me financially with either deal because the interest rate was zero so they neither gained nor lost but they did retain what they now call 'a loyal customer'. 
    Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.
  • Thanks for the advice, I decided to keep the fixed sum loan agreement however after some negotiation I managed to get £450 knocked off the price by showing them some other competitive rates that other dealers were offering. With the fixed sum loan agreement it states I own the car straight away, compared to a HP agreement, which is initially what I expected to have, so I guess the fixed sum loan is better.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.4K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 241K Work, Benefits & Business
  • 617.4K Mortgages, Homes & Bills
  • 175.7K Life & Family
  • 254.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.