Buying out a PCP deal immediately

policewoman007

If you do an early settlement does it affect your credit score. I've read that your credit file will show a default?

born_again

policewoman007 said:

If you do an early settlement does it affect your credit score. I've read that your credit file will show a default?

Credit score is a meaning less figure peddled by CRA. Not seen by lenders.

If you pay it off early. How can it show as a default. Which relates to not making payments 🤷‍♀️🤦‍♀️

Herzlos

If you pay it off too early and the dealer/finance company lose out, they may keep an internal record to be wary about lending to you next time, but settling a finance early can't do anything to hurt your overall credit record. 

jimjames

Early_Retire_Free said:

On my last two vehicle purchases I withdrew from the finance agreement (one of which was with Audi) on the day the agreement was issued, paid nothing and kept the discount offered.  Not sure about retaining other benefits. Dealers know people do this but won't publicise.  So feel free to ask them.

Bought a VW on PCP a couple of months ago, withdrew from it a few days later and you then have 30 days to clear the balance. So waited the full 30 days, not sure why you'd want to pay off sooner when you could earn interest on that money. There is no additional interest due after the date that you request to withdraw even though you've not paid it back at that point.

The full benefits of the finance are still valid. Not sure asking the dealer will help. They're unlikely to know or say and might be less amiable if they know that they're losing their commission (probably around £1000 despite all their effort to setup the finance deal.

policewoman007 said:

If you do an early settlement does it affect your credit score. I've read that your credit file will show a default?

If you withdraw from the agreement then it won't show on your credit report at all. It's essentially as if the agreement never existed. When I took mine out it was initially there but once payment was made 30 days later it then disappeared.