PCP financing

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Folkramfer
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Post by Folkramfer »

scott28tt wrote: Sun Apr 18, 2021 8:58 am I got a service plan for 2 services with my 1st Edition, didn’t pay any extra for it, car on PCP with VWFS.
Looks like some do, some don't. Or it's a limited time offer. Was your service plan through vw finance or vw dealership?

Deleted User 192

Post by Deleted User 192 »

Folkramfer wrote: Sun Apr 18, 2021 9:06 am
scott28tt wrote: Sun Apr 18, 2021 8:58 am I got a service plan for 2 services with my 1st Edition, didn’t pay any extra for it, car on PCP with VWFS.
Looks like some do, some don't. Or it's a limited time offer. Was your service plan through vw finance or vw dealership?

VWFS.
monkeyhanger
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Post by monkeyhanger »

It was probably limited offer applicable to the 1st edition only. Can't find any service information, let alone a service pack you can buy or get free on the VW website currently. Regardless, a free service pack comes under the same principle as deposit contribution. I bought a 10 month old Audi A4 that came with free service pack (2 services) last June (the ID3 is replacing it). I settled finance 2 days after I got the car, and I used the first free service 6 weeks ago.

They can't take a finance incentivised gift from you, whether it be deposit contribution, service pack or anything else. My A4 came with a service agreement contract that didn't disappear when I backed from the finance.
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Folkramfer
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Post by Folkramfer »

Thanks all. Looks like we're going ahead.
HeidiFlowerpt Driver
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Post by HeidiFlowerpt Driver »

I bought mine with a deposit contribution from VW Financial Services. I checked before signing up that I would be able to settle the finance early and it's no problem and fully legit. The dealership asked me as a courtesy to them not to settle within the first six months, though. So my six months are almost up, and I'll be settling the finance next month, and saving about £3,700 in interest charges by doing so.

I imagine the dealership lose out if you settle too early.
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Folkramfer
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Post by Folkramfer »

HeidiFlowerpt Driver wrote: Tue Apr 20, 2021 5:25 pm I bought mine with a deposit contribution from VW Financial Services. I checked before signing up that I would be able to settle the finance early and it's no problem and fully legit. The dealership asked me as a courtesy to them not to settle within the first six months, though. So my six months are almost up, and I'll be settling the finance next month, and saving about £3,700 in interest charges by doing so.

I imagine the dealership lose out if you settle too early.
I'm not too sure but it sounds like it would cost you 6 months interest, which could well be about £1500.

My dealer has been good to me so I want to be fair, but not that much.
Anybody put me right on this?
HeidiFlowerpt Driver
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Post by HeidiFlowerpt Driver »

Folkramfer wrote: Tue Apr 20, 2021 6:26 pm I'm not too sure but it sounds like it would cost you 6 months interest, which could well be about £1500.
Yes I've paid interest, but I've done the sums and it amounts to £810. I knew I would pay some interest, but as it happens it suited me to effectively delay buying the car outright by six months.
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Folkramfer
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Post by Folkramfer »

Wish you all the best. Enjoy your purchase.
monkeyhanger
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Post by monkeyhanger »

Folkramfer wrote: Tue Apr 20, 2021 6:26 pm
HeidiFlowerpt Driver wrote: Tue Apr 20, 2021 5:25 pm I bought mine with a deposit contribution from VW Financial Services. I checked before signing up that I would be able to settle the finance early and it's no problem and fully legit. The dealership asked me as a courtesy to them not to settle within the first six months, though. So my six months are almost up, and I'll be settling the finance next month, and saving about £3,700 in interest charges by doing so.

I imagine the dealership lose out if you settle too early.
I'm not too sure but it sounds like it would cost you 6 months interest, which could well be about £1500.

My dealer has been good to me so I want to be fair, but not that much.
Anybody put me right on this?
The dealership get a payment from VWFS (about £750, I believe) if you take out finance and keep it beyond the cooling off period.

If you weren't taking out finance anyway, it's a payment the dealership wouldn't get. It's just icing on the cake for them. If you wait 6 months, you'll be paying 8 months interest because whatever point you call time on your loan, there's an extra 2 months "notice" interest to pay. I personally wouldn't sacrifice more than half of my £1750 bung to give the dealership a bigger slice. I've got my money in the bank and I'll be withdrawing from my finance the day after I get the car to pocket the lot. If you're going to do this, don't tell the salesperson and get their back up!

£810 seems cheap for 8 months interest especially 8 months at the start of the period where you've cleared less capital and have a larger amount of monthly interest in those early months. I'd estimate £1200-1300.interest paid to grab £1750, not much an incentive left if you didn't need to defer.

Have you just taken the total amount of interest, divided it by the number of months in your term and multiplied it by 6? If so, you're way off with your estimate and you'll have benefitted very little from that deposit contribution.
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Folkramfer
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Post by Folkramfer »

Thanks Hartlepooler. Although I don't wish to deprive the dealer, I suppose I'll be settling up as early as is possible. After all the hassle we've had being without a car for 4 months, we deserve every penny.
monkeyhanger
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Post by monkeyhanger »

Folkramfer wrote: Thu Apr 22, 2021 9:27 am Thanks Hartlepooler. Although I don't wish to deprive the dealer, I suppose I'll be settling up as early as is possible. After all the hassle we've had being without a car for 4 months, we deserve every penny.
Me too! I'm not going to deprive myself of the full £1750 to put 2/3 of it back in the dealership's pocket. If you feel that strongly about your salesperson and know them personally, you could drop a nice bite of whisky round their house!

They only get about £55 commission per car sold, plus a out another £50ish each in overpriced GAP.and Lifeshine/Supagard (which is why they push them so vigorously!).

I dare say if the dealership were told you wanted to pay cash, but that sale hinges on bagging that £1750 and withdrawing, most would be reluctantly fine with that to get the sale, but why make them aware when you can avoid that awkward conversation?
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Kelloggs
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Post by Kelloggs »

I took the pcp deal and asked for a settlement figure in writing when I picked up the car. Paid it off in full before the first month payment. Saved me £2k 👍
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Folkramfer
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Post by Folkramfer »

👍
HeidiFlowerpt Driver
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Post by HeidiFlowerpt Driver »

I borrowed £28500 from VWFS on 28th November over 4 years. I have paid £386.13 per month four times so far. So I have paid them £1544.52. I have a settlement quote of £27766.22 which indicates I have paid off £733.78 of the capital, and paid £810.74 interest.
I didn't have the money to buy the car outright last November, but I do now. I consider it a good result, since I got a very generous deposit contribution from VWFS.
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monkeyhanger
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Post by monkeyhanger »

HeidiFlowerpt Driver wrote: Fri Apr 23, 2021 9:12 am I borrowed £28500 from VWFS on 28th November over 4 years. I have paid £386.13 per month four times so far. So I have paid them £1544.52. I have a settlement quote of £27766.22 which indicates I have paid off £733.78 of the capital, and paid £810.74 interest.
I didn't have the money to buy the car outright last November, but I do now. I consider it a good result, since I got a very generous deposit contribution from VWFS.
Makes more sense when only 4 months have been paid so far. Just goes to show though - interest early on is a killer, when you're paying more interest than capital off (part of that will be that you're paying 6 month interest (4 months elapsed + 2 month "notice").

Fair do's that you weren't in a position to settle when you bought the car, but if you were, I'd not cop for unnecessary interest just to ensure the dealership gets their commission from VWFS.
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Folkramfer
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Post by Folkramfer »

So is their a definitive or legal time within which you can pay off pcp without incurring interest or penalty? I've seen one month, 14 days and before first payment quoted.
monkeyhanger
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Post by monkeyhanger »

Folkramfer wrote: Fri Apr 23, 2021 4:40 pm So is their a definitive or legal time within which you can pay off pcp without incurring interest or penalty? I've seen one month, 14 days and before first payment quoted.
It is 14 days to inform VWFS that you want to withdraw from your finance plan. Once they accept your withdrawal (and tell you it's a non-reversible decision) they allow you 30 days to settle up.

Every day you're into your finance (I.e. days since you picked the car up) before you call within your 14 days, you'll accrue a day's interest to pay on your settlement (around £3 a day). As soon as you call to withdraw, no more interest will be added.
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Folkramfer
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Post by Folkramfer »

monkeyhanger wrote: Fri Apr 23, 2021 6:16 pm
Folkramfer wrote: Fri Apr 23, 2021 4:40 pm So is their a definitive or legal time within which you can pay off pcp without incurring interest or penalty? I've seen one month, 14 days and before first payment quoted.
It is 14 days to inform VWFS that you want to withdraw from your finance plan. Once they accept your withdrawal (and tell you it's a non-reversible decision) they allow you 30 days to settle up.

Every day you're into your finance (I.e. days since you picked the car up) before you call within your 14 days, you'll accrue a day's interest to pay on your settlement (around £3 a day). As soon as you call to withdraw, no more interest will be added.
thanks
Folkramfer
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Post by Folkramfer »

Thanks for all the replies. One more question
What's the best way to tell them that you're withdrawing from the finance agreement?
Their website says phone or write.
I'm looking for the quickest way that is most certain. I'm sure I've seen someone mention triggering this on their website but cant remember where or what.
monkeyhanger
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Post by monkeyhanger »

Folkramfer wrote: Sun May 02, 2021 11:53 am Thanks for all the replies. One more question
What's the best way to tell them that you're withdrawing from the finance agreement?
Their website says phone or write.
I'm looking for the quickest way that is most certain. I'm sure I've seen someone mention triggering this on their website but cant remember where or what.
Collect the car from the dealership with your finance in place, call VWFS within a day or 2 of collecting your car and say you want to withdraw from your finance agreement. They will provide a settlement figure.
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