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)?

I think you have confused everybody! I think most people thought you were being asked for the £175 fee now for your old car......

Assuming you keep the new car for the full term just 'settle' it a little early and you may avoid to £175

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. :-)

:dance:

They will not have told you the exact fee as it all depends on what finance company you were put through on. Some company's give better rates some will pay the dealer more.

Even though they said they have waivered the fee they actually haven't as the finance company's put these on not the dealer and no finance company say ok to taking them off. The dealer sees no profit from this. The dealer can ask the finance company to "spread" the fee. Effectively spreading that larger upfront or at the end payment over the full term. The monthly payment would increase slightly. Then the dealer would reduce the price of the car so the payment would equil to the payment you agreed on.

I know this as I sold cars for 6 years.

^

Again, do not take up dealership financing offers - everybody in he chain has to make their cut from you, no other way around it. So called 0% deals work the same way, costs are hidden elswhere between the parties on the other side of the table .

There are incentives in the system like free servicing etc. if you take up the finance proposed by the dealer.

What I do is to take such a financing offer with a bonus of 3 year servicing "for free" thrown in. Before hand I chack all the fees, early repayment penalties, do the calcs and if works out I take the finance up and pay it off almost immediately getting in this instance 3 years servicing for £275 .