Car PCP Newbie - Early Settlement?

SJMALBA

I've never used finance for a car purchase before, but the new car that I'm considering has a large deposit contribution on offer from the manufacturer (£4k), so I'm thinking of going down the PCP route, with the intention of making an early settlement in full at the earliest opportunity; searching around, some seem to suggest that you need to do this during the 14-day cooling-off period, while others state that you need to wait until after the cooling-off period has expired? Is there a definitive answer?

From what I can see, the most that I can be charged for early settlement is 56 (though I've also seen reference to 58?) days' interest - is that correct?

As this is all new to me, is there anything else that I should be aware of in respect of PCP and early settlement?

CliveOfIndia

You need to check the T&Cs of the contract. There may be a clause to state that if you end the contract within 14 days, any incentives (deposit contribution, free servicing, whatever it may be) would be forfeited.

If you can't withdraw within 14 days then you should be able to settle the finance early, at any point after that. Obviously you'll pay a small amount of interest. And any lender is permitted to charge an early settlement penalty for any type of loan, up to a maximum of two months' worth of interest (1 month if there's less than 12 months remaining). They may charge less than that, but they can't charge any more.