PCP - when to cancel?

[Tom34]

Just got in and had a letter from VWFS saying they've still not received my payment. The letter is dated 25th but I paid the remaining balance on the 23rd which should show up on the same day. Can't phone them now til Monday so posting this for a bit of reassurance really. I'm sure there's nothing to worry about as I've got proof of it leaving my account but annoying all the same.  

[Bowdie]

I've just bought a new Octavia Scout on PCP. Picked it up on 26th June, phoned Skoda to withdraw on 27th.  Cost me £3.90 for the days interest. You get 28 days to pay the balance, but you don't pay any more interest.  If you wait till near the 28 days before you pay, they'll take the first payment on your PCP deal, but will refund it as long as they get the settlement money within  the  28 days. Did exactly the same with our Karoq.  Kept £2000 deposit contribution + 2 services for the Karoq (back in January ) and £3000 + 2 services for the Scout. Any sales guy that tells you to wait a month is being naughty. They get something like £150 for setting up a PCP deal, but if it's settled within a month, they have to pay it back!!

[womanofkent]

2 hours ago, Tom34 said:

Just got in and had a letter from VWFS saying they've still not received my payment. The letter is dated 25th but I paid the remaining balance on the 23rd which should show up on the same day. Can't phone them now til Monday so posting this for a bit of reassurance really. I'm sure there's nothing to worry about as I've got proof of it leaving my account but annoying all the same.  

We found letters from the Skoda finance were somewhat delayed, although we asked for the sum owed and bank details to pay off it took a week to get the info in writing, I wouldn't worry as we also found it took several days for the Finance Cashiers office to show our payment against our debt even though it had been received by them via BACS on the day we paid.  Very frustrating took several phonecalls to them to make sure our account had been credited then you will get a letter confirming end of PCP.

[MJ1]

Thanks for all the information my sales chap said pay it off after a couple of months.

 

I will now be ignoring that if I can plan the cash flow correctly.....

 

Of course still waiting for  Karoq to be moved from Grimsby but hope that will happen next week...

[Lady Elanore]

Quite often a dealer does the deal incorporating the back-end money from the PCP. If you settle too quickly (usually within the first 3 months) the finance company invoke their right to 'claw-back' the bonus from the dealership. So you might save yourself a bit of money, but you won't do the dealer any favours most likely and don't forget that the dealer has to make a profit - before people say they are all robbing barstewards, just remember dealerships are going bust all the time and it's not always because of poor management. Margins are often tight among the mainstream manufacturers.

 

Don't get me wrong, you have to do whats best for you, but it's worth remembering that you may not be helping your local dealership.  

[ronniebarker]

Is PCP only avalable on certain versions of the Karoq?

I ask because i have found a dealer with a new unregistetef 1.5TSI Edition that i really like. Nothing was mentioned about PCP finance or the £2000 off and two free services when discussing  a purchase yestetday. When i look on the finance calculator, the Edition is not listed.

[Defenderben]

9 hours ago, Lady Elanore said:

Quite often a dealer does the deal incorporating the back-end money from the PCP. If you settle too quickly (usually within the first 3 months) the finance company invoke their right to 'claw-back' the bonus from the dealership. So you might save yourself a bit of money, but you won't do the dealer any favours most likely and don't forget that the dealer has to make a profit - before people say they are all robbing barstewards, just remember dealerships are going bust all the time and it's not always because of poor management. Margins are often tight among the mainstream manufacturers.

 

Don't get me wrong, you have to do whats best for you, but it's worth remembering that you may not be helping your local dealership.  

I told the dealership upfront, that I was only taking the PCP to get the service package, which is an incentive from VW finance and costs the dealership nothing. I said it would be paid off in full within a couple of days.

The salesman and head sales guys said; do what you like, as soon as this finance form is signed and submitted, we get All our money and it's up to you what you do. In all fairness, they did say they do not encourage it but as I clearly knew my rights with respect to the finance, fill my boots.

 

I asked about the finance incentives they get and he said, me settling early would not effect it.

 

The screen price was £19,995 and I paid a total of £19,995 plus £13 interest for the 3 days before I spoke to VWFS and invoked my right to settle the finance and  obtained the resettlement figure.

 

I assume that with the amount of cars they sell on some form of finance, the odd customer per month knowing thier rights to pay early etc, might not effect the overall finance targets, they may have in place with VWFS within that dealerships group.

Edited 29 July, 2018 by Defenderben

[Ootohere]

Let us shed a tear for Dealership Owners, Employees and Customers that might lose dealerships.

 

Maybe if they sort out Customer Services, Communications, training, openness and honesty with customers and potential customers they will do just fine.

Maybe if the Brand Director in the UK Rod McLeod was to tell his bosses at VW to stop taking the pith then it will all be good in the end.

[Lady Elanore]

6 hours ago, Defenderben said:

I told the dealership upfront, that I was only taking the PCP to get the service package, which is an incentive from VW finance and costs the dealership nothing. I said it would be paid off in full within a couple of days.

The salesman and head sales guys said; do what you like, as soon as this finance form is signed and submitted, we get All our money and it's up to you what you do. In all fairness, they did say they do not encourage it but as I clearly knew my rights with respect to the finance, fill my boots.

 

I asked about the finance incentives they get and he said, me settling early would not effect it.

 

The screen price was £19,995 and I paid a total of £19,995 plus £13 interest for the 3 days before I spoke to VWFS and invoked my right to settle the finance and  obtained the resettlement figure.

 

I assume that with the amount of cars they sell on some form of finance, the odd customer per month knowing thier rights to pay early etc, might not effect the overall finance targets, they may have in place with VWFS within that dealerships group.

 

 

It's good if Skoda don't use 'clawback' against their dealerships. Some manufacturers definitely still do though. Probably the best weapon for the manufacturer's finance division to prevent this would be to offer 0% finance. They take some of the profit/discount on a car and wrap it up in a 0% finance package. Few people would settle a 0% deal, even though the profit margins remain the same for the dealership, it discourages early settlement. For instance, BMW do massive discount but regular finance for a quarter, then alternate with medium discount coupled with 0% discount. The car costs the customer the same (after haggle) but the finance dept expect to get their interest/profit. I still think people overestimate how much profit a dealership makes on an average new car. 

[Livrishind]

Paid mine off 5 days after completing the online documents. Interest was about £15.00 no problems. Retained the two years service offer and £1500.00 discount.  

Edited 29 July, 2018 by Livrishind

[TonyTonic]

17 minutes ago, Lady Elanore said:

 

 

It's good if Skoda don't use 'clawback' against their dealerships. Some manufacturers definitely still do though. Probably the best weapon for the manufacturer's finance division to prevent this would be to offer 0% finance. They take some of the profit/discount on a car and wrap it up in a 0% finance package. Few people would settle a 0% deal, even though the profit margins remain the same for the dealership, it discourages early settlement. For instance, BMW do massive discount but regular finance for a quarter, then alternate with medium discount coupled with 0% discount. The car costs the customer the same (after haggle) but the finance dept expect to get their interest/profit. I still think people overestimate how much profit a dealership makes on an average new car. 

The dealers buy the car from Skoda as they are only franchises and not 'owned' by Skoda, once sold Skoda don't care (kind of) what the car sells for. The finance company pays the dealer and thereafter it has nothing to do with the dealer anymore, you can settle or not settle. Skoda only dictate the margins between RRP and what the dealer pays Skoda, the difference being substantial. This is how I understand it.

Here is an example from Hyundai

On The Road £    P11D Values £    Total Retail £    VAT £    Basic Retail £    Dealer Price £    Dealer Margin £    Dealer Margin %    Delivery £    Marketing £    Vehicle Preparation £    Tot. Dealer Price £
                                            
27,745.00    26,860.00    26,276.00    4,379.33    21,896.67    19,925.97    1,970.70    9.0    343.11    52.00    20.00    20,341.08
 

[Bowdie]

10 hours ago, ronniebarker said:

Is PCP only avalable on certain versions of the Karoq?

I ask because i have found a dealer with a new unregistetef 1.5TSI Edition that i really like. Nothing was mentioned about PCP finance or the £2000 off and two free services when discussing  a purchase yestetday. When i look on the finance calculator, the Edition is not listed.

It may be because with factory build now, the Edition seems to be available  with 1.6 or 2.0 diesel, but no petrol option. Skoda FS obviously haven't taken account of any dealer stock.

[Lady Elanore]

3 hours ago, TonyTonic said:

The dealers buy the car from Skoda as they are only franchises and not 'owned' by Skoda, once sold Skoda don't care (kind of) what the car sells for. The finance company pays the dealer and thereafter it has nothing to do with the dealer anymore, you can settle or not settle. Skoda only dictate the margins between RRP and what the dealer pays Skoda, the difference being substantial. This is how I understand it.

Here is an example from Hyundai

On The Road £    P11D Values £    Total Retail £    VAT £    Basic Retail £    Dealer Price £    Dealer Margin £    Dealer Margin %    Delivery £    Marketing £    Vehicle Preparation £    Tot. Dealer Price £
                                            
27,745.00    26,860.00    26,276.00    4,379.33    21,896.67    19,925.97    1,970.70    9.0    343.11    52.00    20.00    20,341.08
 

In my day (I'm so old) we used to have a minimum 3 month window if selling any finance product that would incur claw back. Certainly franchise dealers I worked at suffered from this regardless if it was the manufacturers finance arm or the usual other option of Black Horse. You can understand an external finance company wanting their 'incentive' to sell their product back, though. 

[Freefall]

I have just put a deposit down on a preregistered SEL and when I asked about the PCP deal the dealer said the Skoda contribution was already included in the price I have paid ( fair enough, got a good price) and if I wanted the two services I could have them for £159 if I took out the PCP. Does this sound right?

[Tom34]

Tried ringing VWFS a number of times today, after pressing option 2 it just says 'technical difficulties please hold' then cuts off. Not great. 

[ronniebarker]

4 hours ago, Freefall said:

I have just put a deposit down on a preregistered SEL and when I asked about the PCP deal the dealer said the Skoda contribution was already included in the price I have paid ( fair enough, got a good price) and if I wanted the two services I could have them for £159 if I took out the PCP. Does this sound right?

The PCP deal of money off and 2 free services applies to new cars only, not used/pre-registered vehicles

[Freefall]

So i wonder where he's getting £159 for 2 services unless it is his own garage deal and he is hoping to make commission of the PCP

[Grumpy Geaser]

We did ours within the 14 day cooling off period - nominal interest only and the rest of the deal stands no problem. VW finance were helpful and efficient (once managed to get through on phone).

[Lady Elanore]

I should make it clear that 'claw back' only affected the dealership, not the customer  

[silver1011]

Little sympathy for the dealer here, the potential for clawback needs to be baked into their margins. It if isn't then more fool them.

 

I too made it clear before ordering my Kodiaq that I'd be exercising my right of withdrawal, the salesman didn't bat an eyelid.

[silver1011]

On 30/07/2018 at 15:04, Freefall said:

So i wonder where he's getting £159 for 2 services unless it is his own garage deal and he is hoping to make commission of the PCP

 

£159 sounds like a good deal...

 

[Driveucrazy]

I paid more in interest than members who have shared their experiences on when to settle so I wrote to VW finance to enquire why I paid much more. 

the answer is as follows and I quote VW;

 

"During the first 14 days of an agreement, you have what is called a Right Of Withdrawal (ROW), where the amount due is the amount of credit plus a daily interest charge. After the 14 days , paying off your agreement is an early settlement.

 

All (early) settlement figures must be calculated in line with the Consumer Credit ( Early Settlement) Regulations 2004

Section 5 of the regulations states that the settlement date is deferred by 28 days, and section 6 states that for all agreements originally lasting more than one year the settlement figure may be deferred

by another 30 days.

 

To treat our customers fairly, all settlement figures are calculated using the 58 days deferment ( unless the agreement lasts less than one year) which is in line with the regulations."

 

So the moral of the story is do not believe dealers who recommend you leave a few months before you cancel. Make sure you cancel within 14 days using the Right of Withdrawal.

 

On the bright side despite paying a few hundred pounds more than I needed, I have now completed 1500 miles and am totally satisfied with my car, a pleasure to drive.

[BlockABoots]

So i did the deal on my 2016 Octavia vRS today, the sales person was trying to convince me to take the fiance out even though i have the funds to pay the car outright, as i was not interested in the finance option they'd only knock £100 of the display price but if i took the fiance they'd knock £250 and give 2 free services.

 

I just want to confirm that if i phoned them back up tomorrow and say ive had a change of heart and would like to take the finance option would i only end up paying the £15750 as long as i contacted finance within a few days to use my Right of Withdrawal and pay the full balance off?, i under stand there could be like £10 of interest fees for the few days but there are no other penalty charges on top of this for me ending the finance agreement early?

[SurreyJohn]

5 hours ago, BlockABoots said:

So i did the deal on my 2016 Octavia vRS today, the sales person was trying to convince me to take the fiance out even though i have the funds to pay the car outright, as i was not interested in the finance option they'd only knock £100 of the display price but if i took the fiance they'd knock £250 and give 2 free services.

 

I just want to confirm that if i phoned them back up tomorrow and say ive had a change of heart and would like to take the finance option would i only end up paying the £15750 as long as i contacted finance within a few days to use my Right of Withdrawal and pay the full balance off?, i under stand there could be like £10 of interest fees for the few days but there are no other penalty charges on top of this for me ending the finance agreement early?

 

Yes correct, if you take the finance you get and keep any incentives with it.  

 

You then phone up and repay by debit card.  Must be within 14 days to only pay token amount of interest.  If you miss repaying within 14 days then loan moves to early repayment terms.  

 

If it sounds too good to be true, it is basically because those that don’t repay effectively subsidise the gifts/incentives of the small number who repay within 14 days

 

 

[MJ1]

Slight clarification, the 14 Days is to tell them you want to settle. You have 30 days to pay that amount. I.e you don't have to pay back money in 14 days. Just inform them that you want to settle.

 

We have done that and we will pay them back before 30 days up. Phone them and they clearly explained it (to me anyway).