PCP and the £2000 incentive - early repayment

[zamitaka]

There is a good finance offer for the Kodiaq - £2000 contribution if you take the Skoda finance. I, like many, have taken this offer to reduce the price of the car, with the only thought of repaying the loan in full after car delivery to avoid paying the interest. My only concern is are there any penalties for that, which may be equal to the whole interest for the loan period. I have heard that there are no such penalties, but would rather hear from someone who has actually done it? New Kodiaqs are delivered daily, anyone has done that? Did you take the £2000 finance contribution, took the car and repaid the loan in full with no penaltiy? And that with keeping the £2000 contribution and the two free services

Edited 31 March, 2018 by zamitaka

[Defenderben]

To get no penalties or avoid any interest, pay it off within the cooling off period is what I was told.

 

Just paid mine off in last 10mins and it is the daily interest...so the quicker you pay it after taking it out the less interest you will pay..simples. 

 

Oh and no you do not lose any incentives

Edited 31 March, 2018 by Defenderben

[zamitaka]

Good news Defenderben, but again, I have heard and been told things too, let's hear from someone who has actually done it

[Defenderben]

See..... My edited version above..I have just paid mine off 10 mins ago!

 

I took it on Tuesday this week and had a very small amount of daily interest to pay on top of the agreed figure

 

My incentives were a free servicing plan, which is still effective.

Edited 31 March, 2018 by Defenderben

[silver1011]

I've done it before, as have lots of others.

 

It's covered in several threads. If you want to be completely content I'd advise ringing Skoda Finance and asking them.

 

They'll confirm the same.

 

https://www.skodafinance.co.uk/en/private_customers/manage_your_agreement/contact_us.html

 

Being able to settle a finance agreement early, penalty free is regulated via the FCA...

 

https://www.fca.org.uk/about/protecting-consumers

 

Edited 31 March, 2018 by silver1011

[Yogi-Bear]

First 14 days - no penalty and no interest to pay (just pay the 'amount borrowed')

14-90 days - interest to date + 3 months interest + £10 purchase fee

90+ days - interest to date + £10 purchase fee

[silver1011]

Nice one Wiggo 

[zamitaka]

29 minutes ago, WiggosSideburns said:

First 14 days - no penalty and no interest to pay (just pay the 'amount borrowed')

14-90 days - interest to date + 3 months interest + £10 purchase fee

90+ days - interest to date + £10 purchase fee

Yes WiggosSideburns, i found that information about the loan, i was more interested do you keep the £2k, and if anyone had actually done it with the Kodiaq

[Yogi-Bear]

The loan is for the amount borrowed, which is cost of car less deposit (sum of discounts, contributions and amount you put in up front) - at the point you pick up the car and the finance starts, who paid the deposit (you, the dealer, Skoda Finance, or most likely a combination of al 3) is irrelevant. They can only base their early redemption policy based on that amount borrowed and the rules regulating personal finance, which means interest owed (plus a bit more if they choose) and fees proportionate to the actual costs of closing the account (the £10 purchase fee in this case).

Edited 31 March, 2018 by WiggosSideburns

[zamitaka]

That's exactly my thinking, i just wanted for someone who has done it with the Kodiaq to confirm for real. You've got two free services as well as part of the taking the finance, what happens with them if you apply for the finance, but after delivery of the car you decided you actually won't use the skoda finance.  It's good to hear from someone with the actual experience ...

[Yogi-Bear]

I'm not sure what your fixation with actual experience is - the way that personal finance works is tightly regulated. They cannot reclaim / withdraw any contributions or incentives offered to entice you to take out the finance if you then decide to pay off that finance early.

 

Therefore, there is no danger whatsoever of them trying to claim you owe them £2000, or that you cannot have your two free services.

[zamitaka]

Fixation, haha, I loved that   Good to know they can't reclaim any contributions/incentive, didn't know that (and that was my main concern BTW)

 

Well, hear from someone with actual experience ... why not. You never know what "hidden extras" may come to surface or you hear about from any such people. Like the widely advertised £1000 free fuel if you order car until 31 March for example ....  You had to dig deeper, or hear from someone else it is true, BUT ... only if you register car until end of June.

 

No harm to ask these people, if it is all as you say - great, but if it's not exactly like that, well, it's good we asked

[Yogi-Bear]

2 hours ago, zamitaka said:

Like the widely advertised £1000 free fuel if you order car until 31 March for example ....  You had to dig deeper, or hear from someone else it is true, BUT ... only if you register car until end of June.

 

That is nothing to do with the finance though - that is an offer from Skoda UK and applies to cash purchases as well as those taken on finance. Same for the £1000 test drive offer from Q4/17 (and possibly Q2/18 as well). So that may be open to a little more interpretation / conditions / at the whim of Skoda UK.

 

Any offers tied to the finance, however, have to be clearly explained and there cannot be any "hidden extras".

[Defenderben]

8 hours ago, WiggosSideburns said:

First 14 days - no penalty and no interest to pay (just pay the 'amount borrowed')

14-90 days - interest to date + 3 months interest + £10 purchase fee

90+ days - interest to date + £10 purchase fee

I had £13 in interest to pay on mine when I sorted it out today with VWFS?

 

That was since 27th March until today, are you saying I should not have the daily interest added?

 

This is VWFS extract:

What is a ‘Right of Withdrawal’?

Customers whose finance Agreements are covered by the Consumer Credit Directive have the right of withdraw from their finance Agreement. They have 14 days, starting from the day after they sign their finance Agreement to withdraw from the finance Agreement (but not the vehicle purchase). They simply inform their finance provider, who is entitled to charge a daily rate of interest as detailed on the finance Agreement until such time as the loan advanced has been settled. The customer must do this without undue delay and within 30 days of giving their notice of withdrawal.

 

And as for the OP, it is nothing to do with a particular model it is VWFS that pay the dealer the outstanding amount which is less your deposit and any other deposit contribution, so all incentives are yours to keep...end of

 

This is my second PCP agreement I have paid off in full early.

Edited 31 March, 2018 by Defenderben

[silver1011]

I don't believe you should have been charged any interest before the 14 days cooling off period.

 

See here...

 

https://www.handbook.fca.org.uk/handbook/CONC/11.pdf

 

Unless your contract states that they can charge interest then I'd suggest giving them a call and enquiring.

[Yogi-Bear]

8 minutes ago, Defenderben said:

are you saying I should not have the daily interest added?

 

I was mistaken - just checked my contract and you do still have to pay interest even if you withdraw in the 'cooling off' period (i.e. first 14 days).

[zamitaka]

See, you learn something everyday

 

The £1000 free fuel was just an example where they only say half of it as a bait, but not the other as it may discourage you to buy

 

Huge thank you to Defenderben!!

Edited 31 March, 2018 by zamitaka
missing word

[silver1011]

So, the incentive there is to get it cleared ASAP, ideally as soon as you get home!!

[DaveMiller]

To answer zamitaka's question:  you take out the finance and get the £2k discount; collect the car; pay off the outstanding loan (which will cost a bit of interest, as above), but YES, you still keep the £2k discount.  And yes, I did it. 

[mantrahalos]

Not seen this answered anywhere here, so -

 

Is there a difference between

 

.Paying the loan off in a couple of days as described above.

. Cancelling the loan.  ( Obviously still paying back the orignal loan amount) 

 

Thanks - 

 

 

[silver1011]

I'm not sure of the difference,

 

You're paying off the balance in both scenario's?

[mantrahalos]

Just did a little research.  Looks to be the same thing - other than if you settle - you pay a little interest, if yo uexcercise your right to cancel you don't.

 

I reckon better off paying the £20/£30 interest so there is no argument from anyone if you took out the credit (and qualify for the benefits)

 

 

[Yogi-Bear]

3 minutes ago, charlie71 said:

 

Just did a little research.  Looks to be the same thing - other than if you settle - you pay a little interest, if yo uexcercise your right to cancel you don't.

 

 

There is no such thing as cancelling the finance as far as I can see. My contract certainly makes no mention of anything like that. You have the 14 day right to withdraw, but you still get charged daily interest if you go down that route.

[mantrahalos]

OK - Thanks WS.  I'll be cancelling as soon as I get it home.  

[Karman]

I have done it with my Seat through VAG finance, I paid 2months payments to make sure I got the (at the time) 3 free services, I just phoned then and got a settlement figure which if I remember was a bit more than I was expecting, anyway I have done the same with my Karoq, to get get the money off and the first 2 services.