New Car PCP - Agreed February, Car Delivered, Dealer now insisting on New % Rate Set at Huge Cost.

jumeriah64

Evening all. Not sure this in the right section but I could use some serious input to this situation we find ourselves in. I will explain the background and where we find ourselves today.

We committed to a new car, at significant cost from a major brand and from a large dealership via the brand's finance division. We signed, we were credit checked and approved, we put money down and we waited for our car on a long lead time.

The car arrived earlier than expected. We went to discuss handover only to be told that the deal we were offered had technically changed due to new increased rates. 

We were also told not to worry, it was an administrative process only to adjust the offer set in February back to that rate signed and agreed then, but that this could take a short while to arrange. We agreed to wait and trusted the advice given.

This week (a week later) we got word that the manufacturer's (a major one) finance arm would not make the admin change and was insisting on the new much higher rate being implemented.

The dealership seem genuinely shocked that a procedure they have done repeatedly and for years was refused. 

At no time in the last year had anyone at any time, directly, indirectly or even vaguely mentioned that this could be an issue. Indeed it was only flagged to us, a day after the agreed collection date. A total and utter surprise.

My question of course is where do we stand? Procedurally or practically? Is the agreement made many months back solid? Can the finance section insist on such a change? Did someone make an error that they now wish to bury at branch level? 

Could very much use some input on this bizarre and frustrating situation we find ourselves in. Many thanks in advance

DrEskimo

How much is the loan costing you in interest?

Are you getting any incentives for taking the dealer finance?

If not, you could explore an unsecured loan, which may save you substantial amounts in interest. 

Otherwise take a look at your contract. I suspect they are able to make changes like this, so you either call their bluff and say you are walking away unless they revert, or take the hit. 

SaverRate

You could ask the dealership to provide a contribution towards the car that covers the interest of the increased rate. 
When I have brought cars previously I always check what rates I can get elsewhere then ask the dealership I buy from if they can match it. On numerous occasions they couldn't alter the rate so just gave a contribution to cover the interest rate difference. 

jumeriah64

DrEskimo said:

How much is the loan costing you in interest?

Are you getting any incentives for taking the dealer finance?

If not, you could explore an unsecured loan, which may save you substantial amounts in interest. 

Otherwise take a look at your contract. I suspect they are able to make changes like this, so you either call their bluff and say you are walking away unless they revert, or take the hit. 

Not sure off the top but it makes over £200 a month difference apparently. Not aware of any incentives. Car is an in demand model and no discounts or arm twist was on the table.

Tend to agree, they will have a cleverly worded loop hole but we were categorically promised that it was a technicality they could adjust and had done so many times. Then a week later the bad news that they could not.

And we waited a year for this thing to land. Not a car guy but liked this particular option. It's far from cheap but ticked the right boxes.

jumeriah64

SaverRate said:

You could ask the dealership to provide a contribution towards the car that covers the interest of the increased rate. 
When I have brought cars previously I always check what rates I can get elsewhere then ask the dealership I buy from if they can match it. On numerous occasions they couldn't alter the rate so just gave a contribution to cover the interest rate difference. 

This is the current approach. I've not gone to war with them (yet) and would prefer not to.

The individuals at the dealership do seem genuinely shocked and I do tend to believe that they had it all in hand. I have encouraged that approach were someone pick up the tab and we walk away as 'relatively' happy customers. But no commitment yet. 

Buying a new flagship car from a so called premium marque has been truly woeful. I thought we were at last getting somewhere and then this debacle. 

Not once in the 10 month order cycle has anyone mentioned this could be an issue. Even last Friday when this 'admin' issue occurred, they still said 'it's not a problem, we can adjust it' .... then 7 days later ....

Grumpy_chap

£200 per month difference in payment is phenomenal.  Could get some cars for less than that monthly in total.

OP needs to say what type of car it is - there may be people with closer insight 

k3lvc

OP - more importantly what does your contract say in 2 aspects

1) that the interest rate can be varied - and if so under what circumstances ?

2) Are the purchase of the car and the finance separate contracts or a single contract ? If separate you still have an issue to resolve on how you're going to fund the car ?

jumeriah64

Grumpy_chap said:

£200 per month difference in payment is phenomenal.  Could get some cars for less than that monthly in total.

OP needs to say what type of car it is - there may be people with closer insight 

It is a lot. The car in question is a flagship Mercedes EQS. It is a lot of money. But the cost as such isn't really the issue, more the procedure and limitations of change legally.

As mentioned, the dealership considered it an admin change and that it was a well trod procedure. One which they described in some considerable detail. When they came to execute it, they were denied the option despite assuring us categorically that it was not a concern.

And from our chair we signed (months back) paid money required and were never at any time warned this could be an outcome. Not directly, indirectly or even hinted at. Moreover, given we are fairly diligent types, we even asked what they needed from us (the weeks and days) before, at the time the car was slated to land locally. 

I understand rates can change and that to buy one now would incur a different rate and cost. But to be told categorically that it's not an issue, we will sort it, then a week later it to become such an issue? 

k3lvc

jumeriah64 said:

I understand rates can change and that to buy one now would incur a different rate and cost. But to be told categorically that it's not an issue, we will sort it, then a week later it to become such an issue? 

As per my question - what did the order/contract you signed say ? Did it quote a rate and say that was fixed or did it give a get-out that the rate could change depending on the rate at time of delivery ?

jumeriah64

k3lvc said:

jumeriah64 said:

I understand rates can change and that to buy one now would incur a different rate and cost. But to be told categorically that it's not an issue, we will sort it, then a week later it to become such an issue? 

As per my question - what did the order/contract you signed say ? Did it quote a rate and say that was fixed or did it give a get-out that the rate could change depending on the rate at time of delivery ?

Is a solid point, I will dig that out and come back. Have to confess I had not reviewed the small print. That would be the sensible starting point

MrFrugalFever

Speaking from a dealer perspective, in my experience a finance campaign will often run 3 months at a time (quarter) and in most instances will be honoured for 2 quarters due to the extended period in which cars are taking to be built & delivered. However, this is often an agreement between the finance house and manufacturer.

The cost of money has significantly increased since February and it would be quite unusual for the finance company to go back to a campaign that was from 3 quarters ago. When campaigns are fully removed by the finance house there is generally no way of retrieving it back. An expired campaign such as one which was from the previous quarter is normally able to be manually retrieved (again, only talking from my own perspective).

A credit acceptance is generally 90 days, after which a further hard credit search will need to be carried out. The finance docs supplied (if supplied early) should provide you with a PCCI (pre-contract credit information) document and a SAA (Sales Agency Agreement). The SAA will outline if any change of rates/offers etc are variable at any point.The finance house CAN unwind the deal, reject the deal and refuse the deal even AFTER signing the documents. I have had a customer to all the way through proposal, acceptance, signing to be stopped at the funding payout stage as a refusal to fund because of a technicality, meaning a new car couldn’t be registered until that was resolved. It happens unfortunately.

Your supplying dealer will not want to lose the sale so I am sure they will be on YOUR side, however, it may require you to raise a complaint with the underwriting team of the finance house involved, CC’ying the supplying dealer and its finance manager in to the complaint.