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

superbigal

Our situation (Much lower cost) on a car ordered in February and eventually delivered in September worked out perfectly.
New price honoured (Although has rocketed), Finance honoured (although has rocketed).
It got even better.  Part of this was a trade in that itself had increased in value in those 7 months by circa £1500.  The extra value rather than confusing the Finance agreement was simply refunded by the main dealer.
Winner, Winner, Winner.

jumeriah64

That's a nice result superbigal. Well done with that. I didn't do too bad either but different. And regarding the dealer, finance group & company, they have proven to be very accommodating after a few rough days.

So to answer questions asked a few days back, the finance company interest was originally 5.9 %. It is now 9.9% Not a small increment I think you will agree. I imagine there might be ways beat that 5.9% but I would have to confess to not having looked at any.

The monthly amount increased by well over £200 pcm, nearer £250. Or an even more eye watering £11k+ over 4 years. Not a sum anyone can afford to ignore.

It took some days but the finance group has agreed to adjust back to the 5.9%.

Quite some escalation was required and the dealer and dealer group senior folks did invest time and effort into pulling the result. I do believe that none of the parties were under any 'technical' obligation to do anything best I understand. I was pleased with the persons involved and the efforts they went to to repair the situation. I do believe that they felt that we had a genuine set of circumstances and that we were 100% simply caught between the various parties. 

And the conclusion that I envisaged previously and shared with the thread turned out to be the 95% of the problem. I.e. that because rates had not significantly changed for so long and that informal campaigns were being requested by dealership and that finance group had been saying 'yes why not' for so long, that when this crazy increase did (legitimately) occur, the same informal request went in (as had become standard practice) and the answer was 'errr, no!' 

I got the impression at the time and even more so at the conclusion, that this shocked everyone at local level. Confidence was high in the often made request and suddenly the answer was no. First time ever. I'm not sure what the stance will be going forward for others that may find themselves in this position .... which someone surely will somewhere.

I saw significant and genuine efforts to fix this. What threatened to become a cancellation or a legal way forward has become very amicable indeed. At local level, they offered to absorb all maintenance, service and running costs for the 4 years by way of a recognition that the ball had been dropped. Including tyres. Needless to say, they have more than recovered me as a customer and my confidence in them. It turns out that customer service in this particular instance is alive and well after a pretty miserable few days. 

I have to confess that this is the first time since being a lot younger and paying multiple mortgages (in the good old days) to ever measure the impact of interest rates and understand the horror of such rises. Indeed I've not needed to have any access to PCP's, loans or the like for many years. It makes you feel for folks who have been used to cheap money and have no real concept of interest rises such as those that we used to occur in the 80's and 90's. Those of us low on the ladder in that era, used to look and cringe each month when they went up or down and the impact on mortgage. They simply have had no real experience of such rises or the magnitude that used to be as well. Makes you think.

k3lvc

jumeriah64 said:

That's a nice result superbigal. Well done with that. I didn't do too bad either but different. And regarding the dealer, finance group & company, they have proven to be very accommodating after a few rough days.

So to answer questions asked a few days back, the finance company interest was originally 5.9 %. It is now 9.9% Not a small increment I think you will agree. I imagine there might be ways beat that 5.9% but I would have to confess to not having looked at any.

The monthly amount increased by well over £200 pcm, nearer £250. Or an even more eye watering £11k+ over 4 years. Not a sum anyone can afford to ignore.

It took some days but the finance group has agreed to adjust back to the 5.9%.

Quite some escalation was required and the dealer and dealer group senior folks did invest time and effort into pulling the result. I do believe that none of the parties were under any 'technical' obligation to do anything best I understand. I was pleased with the persons involved and the efforts they went to to repair the situation. I do believe that they felt that we had a genuine set of circumstances and that we were 100% simply caught between the various parties. 

And the conclusion that I envisaged previously and shared with the thread turned out to be the 95% of the problem. I.e. that because rates had not significantly changed for so long and that informal campaigns were being requested by dealership and that finance group had been saying 'yes why not' for so long, that when this crazy increase did (legitimately) occur, the same informal request went in (as had become standard practice) and the answer was 'errr, no!' 

I got the impression at the time and even more so at the conclusion, that this shocked everyone at local level. Confidence was high in the often made request and suddenly the answer was no. First time ever. I'm not sure what the stance will be going forward for others that may find themselves in this position .... which someone surely will somewhere.

I saw significant and genuine efforts to fix this. What threatened to become a cancellation or a legal way forward has become very amicable indeed. At local level, they offered to absorb all maintenance, service and running costs for the 4 years by way of a recognition that the ball had been dropped. Including tyres. Needless to say, they have more than recovered me as a customer and my confidence in them. It turns out that customer service in this particular instance is alive and well after a pretty miserable few days. 

I have to confess that this is the first time since being a lot younger and paying multiple mortgages (in the good old days) to ever measure the impact of interest rates and understand the horror of such rises. Indeed I've not needed to have any access to PCP's, loans or the like for many years. It makes you feel for folks who have been used to cheap money and have no real concept of interest rises such as those that we used to occur in the 80's and 90's. Those of us low on the ladder in that era, used to look and cringe each month when they went up or down and the impact on mortgage. They simply have had no real experience of such rises or the magnitude that used to be as well. Makes you think.

All the above is great and you have an acceptable outcome but without answering whether you entered into a contract that allowed this to happen ? This is probably the most important aspect that could impact on others in a similar position moving forwards 

jumeriah64

k3lvc said:

jumeriah64 said:

That's a nice result superbigal. Well done with that. I didn't do too bad either but different. And regarding the dealer, finance group & company, they have proven to be very accommodating after a few rough days.

So to answer questions asked a few days back, the finance company interest was originally 5.9 %. It is now 9.9% Not a small increment I think you will agree. I imagine there might be ways beat that 5.9% but I would have to confess to not having looked at any.

The monthly amount increased by well over £200 pcm, nearer £250. Or an even more eye watering £11k+ over 4 years. Not a sum anyone can afford to ignore.

It took some days but the finance group has agreed to adjust back to the 5.9%.

Quite some escalation was required and the dealer and dealer group senior folks did invest time and effort into pulling the result. I do believe that none of the parties were under any 'technical' obligation to do anything best I understand. I was pleased with the persons involved and the efforts they went to to repair the situation. I do believe that they felt that we had a genuine set of circumstances and that we were 100% simply caught between the various parties. 

And the conclusion that I envisaged previously and shared with the thread turned out to be the 95% of the problem. I.e. that because rates had not significantly changed for so long and that informal campaigns were being requested by dealership and that finance group had been saying 'yes why not' for so long, that when this crazy increase did (legitimately) occur, the same informal request went in (as had become standard practice) and the answer was 'errr, no!' 

I got the impression at the time and even more so at the conclusion, that this shocked everyone at local level. Confidence was high in the often made request and suddenly the answer was no. First time ever. I'm not sure what the stance will be going forward for others that may find themselves in this position .... which someone surely will somewhere.

I saw significant and genuine efforts to fix this. What threatened to become a cancellation or a legal way forward has become very amicable indeed. At local level, they offered to absorb all maintenance, service and running costs for the 4 years by way of a recognition that the ball had been dropped. Including tyres. Needless to say, they have more than recovered me as a customer and my confidence in them. It turns out that customer service in this particular instance is alive and well after a pretty miserable few days. 

I have to confess that this is the first time since being a lot younger and paying multiple mortgages (in the good old days) to ever measure the impact of interest rates and understand the horror of such rises. Indeed I've not needed to have any access to PCP's, loans or the like for many years. It makes you feel for folks who have been used to cheap money and have no real concept of interest rises such as those that we used to occur in the 80's and 90's. Those of us low on the ladder in that era, used to look and cringe each month when they went up or down and the impact on mortgage. They simply have had no real experience of such rises or the magnitude that used to be as well. Makes you think.

All the above is great and you have an acceptable outcome but without answering whether you entered into a contract that allowed this to happen ? This is probably the most important aspect that could impact on others in a similar position moving forwards 

Ah ok, see your point. Well answer is yes. But as those involved explained, PCP's and I believe car financing in general can be revoked and changed at pretty much any time. If I got it right, the offer is for 90 days. Then it's reviewed / renewed. 

I believe that's pretty much the case for any manufacturer. FrugalFever can probably confirm that. But I will check the paperwork. The dealership gave me a copy and indeed I did eventually (accidently) fine the original :-)

So a car with a lead time like mine has had could be looked at and potentially changed 3-4 times. And this is were part of the problem lies ... lead times on new product is long. Stuff that's standing on the forecourt I guess is less likely to be impacted.

In short, the paper you sign on the day you decide is not meaning you can guarantee that will be what you pay when the metal lands.

Also (just remembered) it does not guarantee to cover price increases. Apparently mine had two (fairly modest) price rises during the purchase / order lead time. They did not apply this but again, they could of done.

And yes, I think I have a more than acceptable outcome ... it's a great one. Tyres for this thing cost over £400 a corner. So painful as it's been, it's quite the outcome. I'm surprised but impressed with their turn around. Credit where it's due.

macman

Please can you post the relevant terms of the finance contract that allows the lender to arbitrarily revise the APR after signature? Which is what we've been asking you to do since day one.

jumeriah64

macman said:

Please can you post the relevant terms of the finance contract that allows the lender to arbitrarily revise the APR after signature? Which is what we've been asking you to do since day one.

Maybe some of you are more familiar and spending more time on such detail. But yes will paste that up later day.

I do very much think this is the norm having spent over a week on this. The terminology may be inaccurate but the summary is correct. They are not committed to a specific rate or indeed price outside of a fixed window which I'm fairly sure was 90 days.

But yes will find this in the docs and post it.

Clive_Woody

jumeriah64 said:

At local level, they offered to absorb all maintenance, service and running costs for the 4 years by way of a recognition that the ball had been dropped. Including tyres. Needless to say, they have more than recovered me as a customer and my confidence in them.

That's quite the result then, with a nice sweetener from your local dealer to make up for the anxiety. Hope you enjoy your new car.

jumeriah64

I got the complete paperwork but there is not so much that indicates the limits of the offer from the manufacturer finance division. Many pages, most specific to my car and numbers.

I did however reconfirm the terms with the dealership just. They mention specifically ....

"To confirm, nothing will change once the agreement is activated with xxx. The reason they can change before and unfortunately having now experienced is because of campaigns changing during the period form order to delivery."

This is precisely as I mentioned a couple of times and that process was also confirmed by folks knowing about this from within, on MSE.

The name of the document we signed at the outset is a "Pre contract credit information" .... essentially it's not a contract until the car exists and is scheduled to arrive. It reads like one, but is clearly headed as not being. Think this is key point. This was signed many months ago. We incorrectly thought that was it. 

The finance agreement (I imagine this to be the 'contract') is not signed until the car becomes a material item and pre delivery.  This has just been signed. And as it says below, it's binding once signed. The below is an extract from said document.

Again as mentioned before, this issue (that absolutely will be impacting others) is due to a long standing time period of near zero interest movement in reality, and informal request and adjustment between dealer and manufacturer finance division ... working for many years. And then, a near 4% increase in interest rate. Boom. A clear no to the previously easy informal adjustment.

So that document signed at the beginning (pre contract credit information) is essentially worthless bar to get an outline credit check and kick start the order. The actual contract is not till pre-delivery.

jumeriah64

Clive_Woody said:

jumeriah64 said:

At local level, they offered to absorb all maintenance, service and running costs for the 4 years by way of a recognition that the ball had been dropped. Including tyres. Needless to say, they have more than recovered me as a customer and my confidence in them.

That's quite the result then, with a nice sweetener from your local dealer to make up for the anxiety. Hope you enjoy your new car.

They very much did Clive yes. And I'm very pleased that they did. I have to say I didn't expect that and it was very nice to be 100% wrong. And at this point, I do indeed (for the first time) think we will indeed enjoy the car. Many thanks

macman

So it appears that they allowed you to order a car without any finance agreement being in place whatsoever.  Did you pay a deposit?
Without it, it could be argued that no contract to purchase even exists.