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

jumeriah64

k3lvc said:

Dave_5150 said:

When I ordered my car last October we agreed a discounted price for the new car, an amount of equity in my p/x vehicle over the settlement figure and I signed the finance contract at 3.9% APR that day. 

I took delivery this March and everything went as expected despite the new car increasing in price, and their published finance rate increasing. If they'd tried to change the deal I'd have walked away. (Mazda BTW).

And this is exactly how I'd expect it to be - but then in the last 20-30yrs of car buying maybe we've never had such situations of inflation/interest rate changes and have become complacent about our 'expectations' becoming 'norms'

Will be interesting to see what @jumeriah64 order/contract says and whether MB have pre-empted changes and updated their order form allowing changes to be made (and if so under what circumstances)
 

Is an interesting point ... we have had times of mad IR rises etc (mid 90's) but not in this new world were people stopped buying cars in favour of PCP's. This is actually quite new in reality I guess.

martinbainbridge1975

If you have an order form with figures on signed at the time of paying the deposit, I would be telling them the deal is honoured, or you walk away.  I have a Mercedes myself and speaking from experience they have 0 concept for customer satisfaction, profit comes before everything 

macman

It's not a case of a finance offer being withdrawn. My understanding is that the OP has a signed, binding finance agreement at x%. Either there is a get-out clause in that contract, or there isn't. 
Checking that contract should take 10 minutes, so why all the speculation and discussion of unprecedented economic circumstances etc?
If it's watertight, the finance company has to take the hit. In the meantime, the car is reg'd in the OP's name and sits depreciating and losing warranty in storage.

jumeriah64

martinbainbridge1975 said:

If you have an order form with figures on signed at the time of paying the deposit, I would be telling them the deal is honoured, or you walk away.  I have a Mercedes myself and speaking from experience they have 0 concept for customer satisfaction, profit comes before everything 

The walk away is of course easy. But I happen to like the car. it makes it a worse decision. Wish I could say there was something that caught my eye more. 

Certainly there is zero to date to identify Mercedes as an uplifting experience or elevated CS. Very disappointing. Very surprising.

DrEskimo

What is the rate? How much are you needing to finance and how much is the original and now new terms of the finance agreement going to cost you in interest in absolute terms?

It might be a blessing, as getting an unsecured loan for the same amount might be considerably cheaper.

The monthly cost will undoubtedly be higher, but if that is a considerable issue then perhaps it's an indication you are spending well beyond your means on this car and make you reconsider your options.

jumeriah64

DrEskimo said:

What is the rate? How much are you needing to finance and how much is the original and now new terms of the finance agreement going to cost you in interest in absolute terms?

It might be a blessing, as getting an unsecured loan for the same amount might be considerably cheaper.

The monthly cost will undoubtedly be higher, but if that is a considerable issue then perhaps it's an indication you are spending well beyond your means on this car and make you reconsider your options.

Apologies show my ignorance but when you say unsecured loan ...  what exactly do you mean? Interested to learn.

The appeal of the PCP was of course the throw away for 4 years. A lowest monthly rate was not the driver of the decision to follow this route

As regards my means/resources, without sounding crass or rude, I can afford it several times over and to buy outright in the same manner thanks. But my liquidity or otherwise is not the point or the question. How to fund is a debate worth having. And I have with my FA who was somewhat clear on the situation.

This is about the process, the change of outcome, the limitations of the arrangement and the obligations of the parties involved.

k3lvc

jumeriah64 said:

DrEskimo said:

What is the rate? How much are you needing to finance and how much is the original and now new terms of the finance agreement going to cost you in interest in absolute terms?

It might be a blessing, as getting an unsecured loan for the same amount might be considerably cheaper.

The monthly cost will undoubtedly be higher, but if that is a considerable issue then perhaps it's an indication you are spending well beyond your means on this car and make you reconsider your options.

Apologies show my ignorance but when you say unsecured loan ...  what exactly do you mean? Interested to learn.

The appeal of the PCP was of course the throw away for 4 years. A lowest monthly rate was not the driver of the decision to follow this route

As regards my means/resources, without sounding crass or rude, I can afford it several times over and to buy outright in the same manner thanks. But my liquidity or otherwise is not the point or the question. How to fund is a debate worth having. And I have with my FA who was somewhat clear on the situation.

This is about the process, the change of outcome, the limitations of the arrangement and the obligations of the parties involved.

As has already been asked no-one can help further until we know what the order form says - you've got us hooked as it might have significant implications for others

DrEskimo

jumeriah64 said:

DrEskimo said:

What is the rate? How much are you needing to finance and how much is the original and now new terms of the finance agreement going to cost you in interest in absolute terms?

It might be a blessing, as getting an unsecured loan for the same amount might be considerably cheaper.

The monthly cost will undoubtedly be higher, but if that is a considerable issue then perhaps it's an indication you are spending well beyond your means on this car and make you reconsider your options.

Apologies show my ignorance but when you say unsecured loan ...  what exactly do you mean? Interested to learn.

The appeal of the PCP was of course the throw away for 4 years. A lowest monthly rate was not the driver of the decision to follow this route

As regards my means/resources, without sounding crass or rude, I can afford it several times over and to buy outright in the same manner thanks. But my liquidity or otherwise is not the point or the question. How to fund is a debate worth having. And I have with my FA who was somewhat clear on the situation.

This is about the process, the change of outcome, the limitations of the arrangement and the obligations of the parties involved.

I understand and fully expected you were in a sound financial position to purchase. As above, we are in no position to help unless we know what was in the contract. My point was trying to provide you a more left field solution to avoid the need for finance from the dealership and get a cheaper alternative, that will save you from this hassle and save you money in the long term.

So by unsecured loan I simply mean a personal loan i.e. not a loan secured to the car. I posit to you that you would be far far better off simply paying cash for the car and avoiding any finance at all, but if finance was desired, an unsecured loan would likely be a cheaper way. Simply compare the overall interest costs of a personal loan with that from the PCP.

The notion that PCP lets you change cars more easily is a misnomer. In all likelihood you will trade the car in just the same as if you had bought it outright, whether thats after 4-days, 4-months or 4-years. The only exception is if the car is worth substantially less than the predicted GFV, which then means you can hand back to the finance company. But this is both unlikely, and more importantly, I predict that the extra cost in interest relative to an unsecured loan (or better still, no loan at all) means you will still not be better off (e.g. the car may depreciate £5k more than the GFV, but it will cost you £8k more in interest charges, so you are still -£3k worse off).

Basically I am suggesting you re-evaluate your entire need for PCP to begin with.

MrFrugalFever

DrEskimo said:

jumeriah64 said:

DrEskimo said:

What is the rate? How much are you needing to finance and how much is the original and now new terms of the finance agreement going to cost you in interest in absolute terms?

It might be a blessing, as getting an unsecured loan for the same amount might be considerably cheaper.

The monthly cost will undoubtedly be higher, but if that is a considerable issue then perhaps it's an indication you are spending well beyond your means on this car and make you reconsider your options.

Apologies show my ignorance but when you say unsecured loan ...  what exactly do you mean? Interested to learn.

The appeal of the PCP was of course the throw away for 4 years. A lowest monthly rate was not the driver of the decision to follow this route

As regards my means/resources, without sounding crass or rude, I can afford it several times over and to buy outright in the same manner thanks. But my liquidity or otherwise is not the point or the question. How to fund is a debate worth having. And I have with my FA who was somewhat clear on the situation.

This is about the process, the change of outcome, the limitations of the arrangement and the obligations of the parties involved.

I understand and fully expected you were in a sound financial position to purchase. As above, we are in no position to help unless we know what was in the contract. My point was trying to provide you a more left field solution to avoid the need for finance from the dealership and get a cheaper alternative, that will save you from this hassle and save you money in the long term.

So by unsecured loan I simply mean a personal loan i.e. not a loan secured to the car. I posit to you that you would be far far better off simply paying cash for the car and avoiding any finance at all, but if finance was desired, an unsecured loan would likely be a cheaper way. Simply compare the overall interest costs of a personal loan with that from the PCP.

The notion that PCP lets you change cars more easily is a misnomer. In all likelihood you will trade the car in just the same as if you had bought it outright, whether thats after 4-days, 4-months or 4-years. The only exception is if the car is worth substantially less than the predicted GFV, which then means you can hand back to the finance company. But this is both unlikely, and more importantly, I predict that the extra cost in interest relative to an unsecured loan (or better still, no loan at all) means you will still not be better off (e.g. the car may depreciate £5k more than the GFV, but it will cost you £8k more in interest charges, so you are still -£3k worse off).

Basically I am suggesting you re-evaluate your entire need for PCP to begin with.

Are personal loans available for £100,000?

MrFrugalFever

macman said:

It's not a case of a finance offer being withdrawn. My understanding is that the OP has a signed, binding finance agreement at x%. Either there is a get-out clause in that contract, or there isn't. 
Checking that contract should take 10 minutes, so why all the speculation and discussion of unprecedented economic circumstances etc?
If it's watertight, the finance company has to take the hit. In the meantime, the car is reg'd in the OP's name and sits depreciating and losing warranty in storage.

I would be very surprised if the car has been registered, or indeed the original finance documents signed.