Hello 

 

Currently own a citigo which has been a great car for 4 years 

 

Looking at buying a new fabia , currently there is a £500 dealer contribution on PCP 

 

I bought my citigo new on pcp to get a dealer contribution and then settled  off in full by using right to withdraw in 14 days 

 

This was back in 2019 , can I still use this with Skoda finance ?

 

Regards Steve 

I think you need to pay off the finance by asking for a settlement figure, but someone with better knowledge than me may correct that.

On 01/04/2023 at 19:48, steveeeg said:

I bought my citigo new on pcp to get a dealer contribution and then settled  off in full by using right to withdraw in 14 days 

 

This was back in 2019 , can I still use this with Skoda finance ?

 

Regards Steve 

 

The answer you're looking for is yes but your reasoning is wrong.

 

What you are doing is 'settling' the PCP.  The right to withdraw in 14days only applies to those 'cancelling' finance.

 

You can settle a PCP on the 13th day, the 14th day or the 15th day. Or even the 115th day - makes no difference.

 

If you're settling within 14days then there should be little or no interest accumulated. You'lll be charged something like £30 or thereabouts which includes an administration fee.

 

Not sure what the situation was like in 2019 but these days it's all done online. You can access your finance agreement - just request a settlement figure and that should be guaranteed ( i.e. no additional interest ) for the next 4weeks.

 

Hope that helps. 

The right to withdraw is for first 14 days (cooling off period)

 

After that you can still settle early, but would be subject to any early payment charges that are in the finance agreement.

 

The new PCP offer from 4th April has £750 contribution.  

new prices apply since 4th April, now £18,600 - 24, 700 (plus cost of options)

1 hour ago, SurreyJohn said:

The right to withdraw is for first 14 days (cooling off period)

 

After that you can still settle early, but would be subject to any early payment charges that are in the finance agreement.

 

Unless I'm mistaken, the implication of what you say is settlement of a PCP is free of charge anytime within the first 14 days, thereafter a charge is applied for settling the PCP.  Is that correct?

 

 

 

 

 

 

 

 

 

 

1 hour ago, kodiaqsportline said:

 

Unless I'm mistaken, the implication of what you say is settlement of a PCP is free of charge anytime within the first 14 days, thereafter a charge is applied for settling the PCP.  Is that correct?

 

You would still pay the interest for few days if under 14 days, but zero exit fee.

 

After that as an example could be hit with say an extra months interest to exit, or an admin fee etc, basically anything it says to settle early

1 hour ago, SurreyJohn said:

You would still pay the interest for few days if under 14 days, but zero exit fee.

 

After that as an example could be hit with say an extra months interest to exit, or an admin fee etc, basically anything it says to settle early

 

I thought that's what you were trying to say. 

 

Next question before I respond - have you ever settled a PCP yourself?  If you have then how long in to the PCP was it before you requested a settlement figure?

 

Edit:  another question I've just thought about. How much of an early settlement fee were you charged?

 

I seem to recall asking this question before to someone but here goes again. Can you or anyone reading this produce the wording on the PCP which talks about 14 day cooling off and/or exit fees.

Edited 9 April, 20233 yr by kodiaqsportline

Well it's been a week and no reply to the above. The questions were of course rhetorical because anyone who has settled a PCP agreement knows that's just not how it works. This same issue has come up time and time again so lets see if we can make it clearer for those wanting to know about 'early settlement'.

 

What is a PCP? A PCP is just a financial product.  Your not buying a car, it's more like renting or leasing a car.

 

Who is it aimed at? Predominantly it's designed for someone who can't afford to buy a new car.  We'll ignore those who can afford a car but never want to own it as the subject of 'settlement' never concerns them.

 

How does a PCP work? Think of it as only paying the depreciation on a car.

 

Most of us will have heard of the three options the finance company give us at the end of the agreed term:

 

1: You return their car and walk away. 

 

2: If the car has equity, that's to say, if the car is worth more than the pre-agreed value  ( Guaranteed future value or GFV ) which was determined at the start of the lease, then you can use that equity as a deposit on a PCP for a brand new car.

 

3: You can own the car yourself by buying it from the finance company. Give them the GFV and the car is yours. 

 

All three of the above options are 'settlements', in other words they're fulfilling the agreement.

 

That's what you're told when taking out a PCP and that's how PCP's are advertised, but it's not the full story.  What Option 3: actually says is  you can buy the car at anytime during the agreement.

 

That's what 'early settlement' refers to.

 

What's the difference between 'settling' and 'canceling' a PCP?

 

Settling a PCP is only done by someone who can afford to own the car. ( there are exceptions but that complicates matters ).

 

The only time I can think of anyone wanting to cancel a PCP is when, for whatever reason, they can no longer afford to pay back the loan. In other words, they don't want the car. What they're in fact doing is breaking or terminating the PCP agreement. Now if you cancel / terminate the PCP then that's when there will be penalties to pay. It may take the form of having to pay back any incentives that were originally provided by the PCP company. 

 

Put it this way, I have NEVER came across anyone who has cancelled a PCP. I don't personally know of anyone who's done this and in all the posrts I've read on Briskoda and elsewhere, I haven't come across anyone who's tried to cancel a PCP. 

 

 

So I'm not quite sure why people talk about having to pay penalties and an extra months payment if you want to settle a PCP?  You're not breaking any agreement rather you're fulfilling it.  All you're doing is exercising option 3: above - you're buying the car from the finance company. All this talk about having to pay back their incentives which may have taken the form of a depost contribution or free servicing or whatever else  - where has that come from? I suspect it's armchair experts doing what they do best.

 

Examples:  

 

Say a car costs £30,000 and the finance company have offered you £2000 deposit contribution if you take out their PCP.  The dealer will work out a whole number of figures with you - interest rates, mileages, the GFV, monthly payments etc.  Let's assume you've agree to pay back £400 a month over 3years.

 

If you want to own the car at antime before the agreement reaches maturtiy, all you're interested in is the cost of the car, the deposit and the monthly payments.

 

So if the car cost £30,000 and the garage has asked you for a £500 deposit to secure it, then within the days of signing the PCP the car will cost:

 

£30,000 less deposits ( £500 + £2000 ) = £27500.  If you request a settlement figure after 1 day, hand over £27500 to the finance company and the car is yours. ( + there will be a nominal admin fee which costs peanuts )

 

It's this that makes complete nonsence of anyone who talks about 14day 'cooling off' periods...   think about it...

 

If you said no I don't want to go ahead with the PCP, then the car will cost you £30,000 less £500 deposit - £29500

 

If you wanted to settle after you've made the first payment ( i.e. wait at least a month after taking delivery of the car ), the car will cost:

 

£30,000 less the deposit ( 2000 + 500 ) less your 1st payment ( 400 )  So that'll be £27100

 

Can you see what I'm saying?  It would be crazy to cancel a PCP within 14days if you wanted to own the car.   I'd love to know where that rumour started. People who say such things obviously haven't thought it thru. 

 

Where I believe people get so mixed up is they're confusing PCP to other financial products like HP or bank loans.  I'm no longer familiar with how those types of loans work today, but it was certainly the case in the past that if you wanted to 'settle' those products early, then they'd incur a heavy penalties. PCP does not work like that. You're not altering the agreement in anyway by settling early. 

 

So to summerise:  For people who're traditionally cash buyers i.e. want to own the car outright, then it's often if not always the case that it's cheaper to do so by taking out a PCP and then settling it.  As a rule of thumb people often wait a few weeks to let all the paperwork go thru before requesting the settlement figure but it's not necessary.

 

With VW Financial Services ( the finance company Skoda use ) there is no need to actually phone the finance company for a settlement as it's all done online. What I do is wait until such times as I can log in to their system ( usually a few days ) then request a settlement figure. You then have something like 4wks from the date of the request to pay VWFS and you can have the car without paying a penny in interest. As I say, all they ask for is around £30 as an admin fee. 

 

 

Sorry for the long post but hope that makes the term 'early settlement' when discussing PCP a little clearer to those who're interested.

 

Just adding to this as a customer that's just withdrawn from a PCP agreement, having signed up during the Skoda Plus Event (£750 dealer contribution plus two years' MOT, Servicing, Recovery and Warranty).

 

Picked up the car on a Saturday, phoned VWFS asking to withdraw on the Monday which froze the balance with just under £10 extra on top of the list price. Everything confirmed on the phone but waited for the 'Right to Withdraw' letter to arrive before paying off the balance (you get 30 days to do so from the moment you ask). Now just waiting for the clearance letter to come through saying the car is ours which should arrive within 10 days.

 

We didn't have to make up the balance for the dealer contribution and we've kept the servicing plan as it's not connected to the finance agreement.

 

Hopefully helpful for someone else that ends up searching and reading various threads as I did before purchasing!

I "cancelled" a PCP agreement some years ago as well, but in my case it was well into the agreement term. I handed the car back without penalty as I'd fulfilled the requirement in the terms to, if I remember, make at least 50% of the payments. I did a deal on a new car and even with handing the car back the figures stacked up. I had two near identical cars on the drive for a couple of days until the older one was collected. I liked my Passats and had a silver earlier version before those.

 

I've used PCP a lot to get good deals with manufacturer contributions and services included and as said you never hear of anyone being penalised for early settlements by having to repay for those contributions. The dealers aren't bothered and as said there is no link between them and the finance company, all they want is payment for what they are owed. Best is when you can get 0% (why use your own money!) as well. I got a cracking deal on my current Volvo XC40, strong residuals on my first one, way over the GFV (I'd paid off the balance near the end of the agreement as dealers think they are doing you a favour giving you the outstanding balance/GFV), loyalty bonus, free servicing and manufacturer discount and the 0%! It was a no brainer not to change! I'll never see a deal like that again!

 

I settled the balance on my Yeti as well to help with getting the best Px. I've been stung as well mind. Bought the TT from the show room and couldn't get any discount etc. and still wince at the figures. That was 10 years ago and I've still got that car so not too bad when spread over that many years!

 

 

Edited 5 December, 20241 yr by VAGCF

On 30/11/2024 at 20:05, nevermindthedanger said:

Just adding to this as a customer that's just withdrawn from a PCP agreement, having signed up during the Skoda Plus Event (£750 dealer contribution plus two years' MOT, Servicing, Recovery and Warranty).

 

Picked up the car on a Saturday, phoned VWFS asking to withdraw on the Monday which froze the balance with just under £10 extra on top of the list price. Everything confirmed on the phone but waited for the 'Right to Withdraw' letter to arrive before paying off the balance (you get 30 days to do so from the moment you ask). Now just waiting for the clearance letter to come through saying the car is ours which should arrive within 10 days.

 

We didn't have to make up the balance for the dealer contribution and we've kept the servicing plan as it's not connected to the finance agreement.

 

Hopefully helpful for someone else that ends up searching and reading various threads as I did before purchasing!

We withdrew from our PCP agreement within the 14 days last year but when trying to book one of the free MOTs at a different skoda dealer I was told I needed to provide evidence that we were entitled to this. Looking on myskodafinance.vwfs.co.uk only the service plan is listed.

Should the skoda dealer be able to find this info or would I be able to get something from vw finance?