I have agreed a deal to swap my fabia tsi for a tdi fabia and was told they will clear the finance my my current car and put it's equity towards my new car. I was told there was a £160 acceptance fee for finance which I thought was fare enough.

I've just called them to see if I've been accepted for finance, which I have but he said there will also be £175 option to purchase fee which wasn't mentioned when I agreed the deal with the salesman. Does this extra fee seem fair or are they being very cheeky telling me this now, after finance has been arranged?

P.s I forgot to say, this is a genuine skoda dealer and I'm trading my 61 plate in for an 11 plate if that helps.

Thanks in advance.

I have heard of these fees before, but if they did not tell you when you did the deal then maybe they should write it off....

The bloke I spoke to on the phone said he would call the finance company to see if it can be waived. I bloody hope so cos it was a cheeky shock when he told me on the phone. He also suggested paying off the full amount a month early would mean I didn't have to pay this fee. Is there any truth in this statement?

I was made aware of fees like this, but they work them into your final finance payment.

I was told it is 24 monthly payments of xxx but nothing was mentioned about a fee at the end or the last payment being xxx + 175. Swines...

Always read the small print...

Conversely, if such fee doesn't figure in writing somewhere in your agreement then just laugh at them

The first fee is an acceptance fee. I was told this is for admin charges and credit searches. And the last one is for the same admin charges and to make the car legally yours.

I'd understand a fee at the end of a pcp because it isn't certain that you will keep the car. On a hp though, surely there shouldn't be an option to purchase fee because you aren't exercising an option to buy. The decision to keep the car was made upon taking out hp if you know what I mean. Anyway I'll call them tomorrow to see what they say. I have to sign the paperwork on Thursday so I hope it gets sorted...

I'd understand a fee at the end of a pcp because it isn't certain that you will keep the car. On a hp though, surely there shouldn't be an option to purchase fee because you aren't exercising an option to buy. The decision to keep the car was made upon taking out hp if you know what I mean. Anyway I'll call them tomorrow to see what they say. I have to sign the paperwork on Thursday so I hope it gets sorted...

The clue's in the name "hire purchase"...i.e you are hiring it and you don't have to buy it.By law all HP agreements have a hand back the car option and pay no more after so many of the payments have been made (can't remember,perhaps three quarters?)....that's why you have that final special payment I suppose.

I agree you should have been made aware of it,but also it's prominent on the agreement .If you've already signed the finance agreement it's a bit late,but if you haven't I'd say you still have some bargaining power with the dealership.

Seeing as you are not actually purchasing the tsi you shouldn't be paying that fee. You are trading it in for another car so the dealer should just ring the finance company for a 'settlement figure' and pay that to clear the finance. As above pcp finance often has a final admin purchase fee if the holder of the agreement wants to pay the mgfv and keep the car at the end of the agreement but I've never had to pay this when I've traded in any of my cars early. Never seen purchase fees attached to a hp deal tho as the whole point of those is that the finance is cleared and you own the car by the end of the agreement. Maybe there is a 175 fee for terminating the hp deal early? Best check the small print..... :-)

You pay the acceptance fee at the start, only if you decide to keep the car at the end of the agreement does the last fee become payable. So if you have the HP over 3 years, and you give the car back after 2 years you do not have to pay the option to purchase fee since you are not exercising your right to purchase.

HP is not a loan, people get confused. HP is where you are almost renting the car from the finance company who will own the car until the last payment is made. Until that last payment is made the HP company can take the car back off you, just the same as you can give it back to them. The last extra payment covers the cost of fully transferring it to you, and that will include updating HPI, credit reference agencies etc. to say they no longer hold a financial interest in the car.

HP should also not be confused with PCP which is a lease contract and again has different rules, and at the end of these agreements the car is handed back to the lease company, so there is no final option to purchase fee.

The option to purchase fee at the end of HP is typical in all scenarios and has been for many years.

Thank you very much for all of your replies. I am only signing the paperwork Thursday. Last Thursday I put a deposit down and there was no mention of this extra option to purchase fee. Fair enough if it is required but I think 175 is extortionate when you consider the otp fee on my pcp trade in was 60 quid.

http://www.briskoda.net/forums/topic/253244-car-pcps-anyone-on-one-or-having-used-one

jaxx007,

can you be clear about the finance type it is. What are they arranging?

Is the car you are returning the Deposit for a new loan/purchase?

Are you borrowing the money to pay the car outright & own it,

& hence it is a Car Loan. Personal Loan or as was known for years HP,

Hire Purchase.

With HP the lender was in effect the Owner, although you were the Registered Keeper.

(This did not mean you could return something early, the terms were you paid it till the end, the insurance settled if you lost it,

Crashed, stolen , gone, car less & still paying for years. (Why you need fully comp insurance)

why you now buy GAP insurance, incase the loan is greater than the settlement on the loss & the money you have still to pay.),

*Bought on the Drip.*

Its yours till its paid,

you stop paying they take it back, (repossess)

you are still due the original borrowings, and thy might sell it and still want the balance from you..

That is HP as it was & often still is.

If you buy from a Catalogue like Littlewoods, its a 'Credit Agreement'/HP, you can not return your old Work Boots you bought.

Other types of Lease or PCP is a very different matter.

george

I am trading in my car which was on a pcp contract. The dealer is settling the current pcp finance and the equity in the car is going Towards the deposit for my new car. THe new car is being bought on a hp arrangement over 24 months. I was told there would be an arrangement fee which I will pay when I sign the proper paperwork on Thursday. I. SPoke to the dealer yesterday and he said I have to pay an otp fee at the end too. There was no mention of an otp fee when I paid the deposit and signed the initial paperwork. Even still does 175 sound fair for an otp fee or is the dealership making a big profit on overcharging me?

OTP, 'Option to purchase fee'.

Is this on the car that you are Returning, you are paying it off by actually buying it & then trading it in?

(It is not anything to do with the new deal is it?)

?? Can i ask, are you sure you are getting a good deal here?, A good price on the car thats going back?

Seems like win win win all down the line to the dealer.

Looks like you are paying several times to get an easy and quick deal. which can be expensive.

all the best.

george

No the option to purchase fee of 175 is for my new car, not the one I'm trading in. The dealer is paying my settlement figure 8500 ish and effectively paying 8800 ish for it so the 300 equity goes towards my deposit on the new car. The 175 otp will be at the end of my hp term for the new car. Is this otp fee avoidable by settling the finance on the new car early (as in paying the full settlement figure for my new car in 6 months or a month before the end of the hp term)?

OH and is there scope to haggle this fee because 175 seems a lot compared to the 60 otp fee I would have paid on the car I'm trading in?

if the 175 is more than you pay a month then just pay the last 2 together thus eliminating that fee, failing that tell em to waive it or stuff it

Why don't you conclude your financing agreement and sell the car privately. You will get better money for it...

Also, I thought you only sign the financing agreement at the point of purchase. All that happens before is just the credit company vetting you?

I haven't signed the finance papers yet. just paid a deposit and they ran a check on me. There was a breakdown of costs etc on The paperwork I signed when paying the deposit so there was no mention of the otp fee on this or from the salesman's mouth. I paid a deposit on The car and then they throw in this extra charge which I thought was a bit naughty. I guess I'll have to pay the finance off early an avoid it.

Is this all happening at a Skoda Dealership or somewhere else?

What value was put on the Car you were returning

& what is the car thats going back?

george

All at a skoda dealership. IT's a fabia estate I'm returning for a different fabia estate. Basically giving back a 61 plate tsi 86 for 8800 ish and getting a 11 plate tdi 105 for 8500. PLus 160 acceptance fee and 349 for 2 services and an mot. All in all it's about 130 quid more to pay than I would've done for my tsi... Plus possibly 175 more for otp fee lol.

Just spoken to the dealer on The phone and they told me that the otp fee will be removed. I'll believe it when I see the paperwork though lol.

Result. Thanks for all the help guys n gals. :-)

Brilliant! Way to go mate!