Currently there is a £3500 deposit contribution offer from VW Skoda Finance if you take out a PCP. Am I right in thinking that if I were to take this offer but them settle the PCP then Skoda Finance would take back £3500 deposit contribution ?

I believe you can settle the PCP at any time. Paying the settlement in the first month would mean minimal interest charge and yes you keep any incentives, contributions, etc.

Plenty of posts on here on the subject.

Many thanks for the response. I am totally confused. I have spoken to two Skoda dealers today, one said I wouldn’t have to pay it back and one said I would. Not sure what I do from here.  This makes a difference to whether I buy the car or not. I am wondering if to phone VW Finance. 

I bought a new Octavia last year. The salesman himself advised me to go for a credit agreement to get a £2000 deposit contribution and told me correctly that I wouldn't have to pay it back. I cancelled the deal the day after collecting the car, and was only charged £7 interest. So I'm now £1993 better off than if I'd just paid in full initially.

You do not need to pay it back.

 

The concept is that all the big car manufacturers own or have tie ups with finance divisions.  Usually the deal is deposit + x months at £Y + final payment of £Z.  If you add up the payments they are often few thousand more than cash price.   So basically they make more if you take the deal and pay it to the end.

 

The finance and credit laws in UK give you a 14 day cooling off period (from date of signing which is usually just before car pick up).  They take risk only a small percentage will pay it off quickly (and the discount you get is effectively subsidised by the majority who don't settle in full).  It's not advertised as such but your discount you keep is a subsidy from the poorer who can't afford to buy the car in one go.

Thanks Octy. I wonder if the rules are different for credit agreement compared to a PCP. The deposit contribution from Skoda for a PCP is £3500 but I think it is less for a credit agreement. 

Thanks Surrey. I am concerned as to why a dealer told me he stopped offering these deals because so many people had told him they had to repay the contribution. The contribution is not part of the finance contract and as such the terms are not coveted by law. I may be being pedantic but I can’t risk losing the £3500. I think I will talk to VW Finance to see if I can get something in writing. 

2 hours ago, Shetlandtim said:

Thanks Octy. I wonder if the rules are different for credit agreement compared to a PCP. The deposit contribution from Skoda for a PCP is £3500 but I think it is less for a credit agreement. 

Answers to questions like that are tied up in contract law, and you're the only person who actually has your contract. Anything anyone else says is a generalisation.

Edited 15 February, 20251 yr by Paws4Thot

@Shetlandtim  Was that a car sales person or the dealer principle telling you?

You know when they lie, their lips move. 

 

 

Edited 15 February, 20251 yr by Ootohere

2 hours ago, Paws4Thot said:

Answers to questions like that are tied up in contract law, and you're the only person who actually has your contract. Anything anyone else says is a generalisation.

unfortunately the dealer couldn’t or  wouldn’t give a copy of a contract until I was going to sign. I think I will have to speak to VW Finance

7 hours ago, Shetlandtim said:

Thanks Surrey. I am concerned as to why a dealer told me he stopped offering these deals because so many people had told him they had to repay the contribution. The contribution is not part of the finance contract and as such the terms are not coveted by law. I may be being pedantic but I can’t risk losing the £3500. I think I will talk to VW Finance to see if I can get something in writing. 

I don't know what the dealer is talking about.  The deposit contribution comes from the manufacturer (who presumably reduces the price to dealer by same amount).   You will need to look at the breakdown on the sales invoice to see exactly how they record it, but there will be a reduction in amount due by the value of the contribution (and as long as it is not part of the total due, you should be ok)

 

What might happen (and it is not your concern) is that the dealer gets a commission from finance Co, but if it is cancelled within cooling off period, the commission is voided too.  I suggest you don't tell the dealer you intend to pay it off, just tell the finance company 
 

When i bought my Karoq just over a year ago, I asked the dealer about how long I would have to keep up the HP (which I didn't really want) payments to get 2 free services (which I did want).  They told me a minimum of 6 months but I knew they were lying.  I phoned Skoda Financial Services who told me I could cancel the agreement within a day or two of taking it out and could keep the free services.  This is what I did and I paid a couple of pounds in interest.  I appreciate your circumstances are different but the lesson is ask the people who know and not your dealer.  They obviously will be worse off in some way so have no incentive to give you correct financial information. 

I got a £1500 deposit contribution for buying my 4 year old Karoq from a large retail group. As soon as I picked the car up and got it home I payed it off. The dealer would not take a penny off the price, which was already good so I effectively got a £1500 discount. I do not know or even care who lost the £1500, I gained it lol

It was the Sales Manager who originally told me this.

 

I have just spoken to Skoda Finance and asked them.  I was told that the £3500 contribution was not connected to the PCP agreement but was something to be agreed with the dealer.

 

Not sure what to do next

I hope someone knows the truth because i do not believe what you were told about the 'Skoda Finance Deposit Contribution'. 

Edited 17 February, 20251 yr by Ootohere

thanks Octo

 

Where to I go to find out the truth ?

 

I would go back to Skoda Financial Services and ask them again.  You'll probably speak to someone else in there anyway.  Ask for a clear yes or no answer to your question and get the name of the person you spoke to.  It worked for me..

My understanding is that if you cancel within 14 days you only pay a token interest fee. You do not lose any of the package deal parts ie service package, warranty or dealer contributions. Have done it 3 times now. No issues at all I think this is a general financial service rule across all finance deals. It was our local dealership who confirmed/ suggested this.

Picked up my new car last Friday. Rang VW Finance to cancel the credit on Monday. Within 2 minutes I was told how much I had to repay (the borrowed amount plus less than £12 interest), and within 5 minutes a confirmation email arrived with their bank details to make the repayment. So easy.