PCP/HP, dealer contribution

mikrt

I have found a car I like, have saved enough to pay outright, £21.5k

Dealer site offers £500 contribution of taking their PCP or HP finance.

I'm thinking of taking one of these options for the £500 contribution, then paying it off straight away.

Would that be allowed, and would it work? 

Thank you

Ebe_Scrooge

In general yes, it's allowed - and is what quite a lot of people do to take advantage of the dealer contribution.

As always, read the T&Cs carefully before you start.  They are allowed to charge an early settlement penalty of up to 2 month's interest, but I suspect any early settlement penalty would still be less than the £500 you've saved - obviously, you'd need to do the maths

DrEskimo

Yea I did this through a main Renault dealer using their finance on a used car. I did not have any fees or early settlement penalty.

However, if the finance is direct with a lender (e.g. Santander) you may be subject to up to 2-months interest as an early settlement fee (as this member found out...).

As Scrooge says, read the fine print. Also don't take the dealers word, read the terms yourself!

Dave_5150

I don't believe there would be any fees if you cancel during the 14 day cooling off period