PCP - when to cancel?

[FabFabFabia]

I pick up my new Karoq Edition tomorrow and I took out the PCP offer to benefit from the £1,500 Skoda contribution and the first two annual services for free.

 

To avoid paying interest, but to still keep the free services and £1,500 money-off, how soon after driving the car away can I pay off my PCP deal to own the car outright? I'd love to hear from other owners about how and when they did this (or why they haven't). Thanks!

[patrolman]

I thought it was two years befor you could do any thing with out encuring costs 

[FabFabFabia]

That's why I asked because I'm sure I read on a post here that someone cancelled after just 14 days while still keeping the benefits. And the dealer told me I could cancel after a month or two so I'd like to be sure.

[Auric Goldfinger]

You can pay the car off when ever you like. No penalties and you keep everything in the deal, ie:- Skoda contribution, free servicing, free extras.  Everything. Ring Skoda Finance for settlement figure and just pay it..........

 

 

 

 

Edited 24 May, 2018 by Auric Goldfinger

[Hitz]

I've just cancelled mine after the first 14 days. When you call to cancel they send through a settlement quote which is valid for 28days. I asked can I pay now and avoid the interest for 28 days, they said I can but would still have to pay the interest.

 

With respect to the regulation they are able to do this however couldn't find mention of it on their T&C's. I couldn't be bothered with the argument so just accepted it. Interest payment of around £200.

 

If you hear different please let me know.

[LemIsBack]

My wife did the same on a Fabia last month. Paid it off after a few weeks of ownership, kept all the benefits of the deal.

[OldKaroq]

49 minutes ago, Hitz said:

I've just cancelled mine after the first 14 days. When you call to cancel they send through a settlement quote which is valid for 28days. I asked can I pay now and avoid the interest for 28 days, they said I can but would still have to pay the interest.

 

With respect to the regulation they are able to do this however couldn't find mention of it on their T&C's. I couldn't be bothered with the argument so just accepted it. Interest payment of around £200.

 

If you hear different please let me know.

You have still made over £1,500 on the deal (taking into account the servicing aspect) so I wouldn't worry too much!

If this keeps happening I can see Skoda curtailing the deposit contribution.

[womanofkent]

we were initially told by the dealer we would have to keep the PCP for 6 months at the time we thought we were saving £1799 so worth it, however by chance rang Skoda to enquire and found we were in the 14 day cooling off period and that we could pay it off.  They sent us a letter and we were able to pay off, if however we had done it on the 15th day we were told we would have had to pay at least the first months full interest.  The service plan vouchers were printed out at the dealers the day we collected the car so we already had those in our hands.  Paid off and no problems

[FabFabFabia]

womanofkent - so when cancelling during the 14 day cooling off period did Skoda not ask for their financial contribution back or invalidate the two free service vouchers?

Edited 24 May, 2018 by FabFabFabia

[womanofkent]

No not at all.  We paid off the balance with some interest obviously but I can confirm we did not pay an extra £1500 which was our deposit contribution, our vouchers were printed off at the dealership.

 

I have just got out my paperwork to check everything.  Our PCP final payment was £47.60 more than we borrowed due to which was their admin fee and interest.

 

Looking at our notes we were told if we cancelled day 15 to 30 we would be charged a full month interest and 28 days interest.  You receive a statement that states how much you have to pay and are given 2 weeks to pay the amount, then receive a confirmation letter that states they no longer have an interest in your vehicle.

 

We still have the paperwork for the free services.

[FabFabFabia]

Thank you womanofkent, this has been very helpful to me. I'll post here how I get on when doing the same.

[womanofkent]

you are welcome, as I say we were confused because we were initially told to keep it 6 months but we couldn't find anything in the paperwork that referred to a clause that said you had to keep the PCP x months to qualify for the deposit or the services...when we told my brother in law about it he said "so the finance company got screwed" (he works for Barclays) well I have to say when your interest rate is 6.9% which seems high to me and there is nothing to stop the loophole then yes we took advantage of it, of course the dealer was very keen for us to take out the PCP too even though he knew we would pay it off as they had to pay money into our bank account because when we traded in our old car it was worth a lot more than the maximum deposit we could put down on the new car.

 

Hope it goes well

[Defenderben]

Pay it off immediately, you will incur daily interest from the day you sign the contract.

 

I paid mine off within 3 days and it cost £13 interest: still have my full service plan intact

[Bowdie]

We paid ours of within a couple of days and paid £3.90 a day interest. Once you confirm your wish to withdraw they send a settlement figure which you have 28 days to pay. I don't think you pay any additional interest during this 28 days, although we paid ours by Bank Transfer the same day. You do have to withdraw within 14 days not to incur any penalties. I don't understand why any dealer would say pay it off after 6 months, unless of course they don't get commission on the finance if it's paid off earlier.

[silver1011]

Ignore the dealers.

 

Request the settlement figure as soon as you get home after collecting the car and pay it off in full ASAP.

 

Minimal interest payments and no loss of financial contributions or incentives.

 

Its been this way for years. Duff information from dealers doesn't help.

[Tenchfisher]

I paid my PCP off on Monday, exactly 30 days after getting the car and it cost me just over £250 in interest charges. I should have done it within 14 days,  but the salesman was adamant that it should not be paid off before 30 days had elapsed. I have a strong suspicion that some commission might have played a part in his advice. Still, to get a £1500 discount, two free services and 3 year’s free breakdown cover, it was still a bargain.

[silver1011]

I'd be asking the dealer for a further discount off the car to the value of £250.

 

He's mislead you, intentionally or not. £250 is not an insignificant amount of money, regardless of the savings you'd already negotiated off the car.

[TonyTonic]

You should pay it off within the 14 days cooling off period, no interest due.

 

You keep all your incentives, once the deal is done and  the money is paid to the Skoda dealer from the VW finance company - you owe Skoda UK nothing but VW Finance owns the car and you deal with them directly. 

 

The only thing I'm not sure is whether the salesperson gets their comission (who cares). Do not believe a word the dealer says, ever. Period.

Edited 25 May, 2018 by TonyTonic

[FabFabFabia]

Just to update everyone here who offered me very helpful advice which I do appreciate. I collected my Karoq Elegance yesterday from the dealers. I love the car! The dealer advised me to wait a couple of months before I paid off the agreement but, as this was always my intention, I didn't want to pay two month's interest. So today I phoned up VW Finance offering to pay off the loan in full (I cashed in some old ISA's only paying a paltry 0.1% to pay for my Karoq and own it outright). They were very helpful over the phone and confirmed to me that the two free services will still apply even though I have cancelled the credit agreement. They said all I had to pay was one day's interest of £3.42 on top of the credit balance. They're writing to me to confirm this and giving me 28 days to pay the balance to own the car. I'm well chuffed so thanks again for your advice!

Edited 26 May, 2018 by FabFabFabia

[Defenderben]

It is just great, when people believe what others that have done before them, follow thier advice.

 

Well done and only 1 days interest

 

All this rubbish about 14 days with no interest and keep it a couple of months or the doubters thinking you will loose your incentives: have faith and know your rights.

[silver1011]

Now, to complete this saga, you need to make contact with the dealer and ask them why their employees are giving out incorrect or misleading information.

 

Had you taken their advice you'd have had a bill for hundreds of pounds instead of £4.

 

Very poor. I'd be asking the dealer for a third service as way of an apology and recommending they approach VWFS for some additional training.

 

[Driveucrazy]

You got a good deal, I cancelled mine after first payment and they applied the laid down formulae from the credit act. Worked out at about 3 months interest. You can google and various sites have an online calculator that applies the formulae if you want to check. 

[Tenchfisher]

Explains why I got clobbered for over £250 when I followed the salesman’s advice to not pay off my PCP until exactly 30 days had elapsed. I will be going in to see him next week to ask why he gave me wrong info.

[Driveucrazy]

Yup, it easy to be wise after the event. On the web someone  posted that the best thing to do is not actually pay it all off but to make an early payment ASAP that leaves about £100 outstanding. The interest on that over the life of the agreement is negligible. I could not be bothered as even paying the 3 months interest the deal wasn’t too sad! If you really want a hobby try applying the formulae yourself, but only advisable if Rachel Riley is your call a friend.

 

[albudu]

Just to add to the information already given on this post, i have just signed my agreement and it clearly states the following: 

 

"If the Amount of Credit does not exceed £60,260, you have the right to withdraw from this Agreement, without having to give any reason. Should you wish to exercise this right, you must notify us in writing or orally within the withdrawal period at our address. The withdrawal period is 14 days, beginning with the day after the day on which this agreement is made"