Anybody experienced difficulties with MB Finance?

[biffothebear]

I recently decided that I didn't want to wait for the facelift C63, I also wanted to take advantage of the soon to expire finance offer, and also look for a good deal on what is soon to be an 'old' shape car. With this in mind I approached a few dealerships to see what they could do, but it seems there are only 4 or 5 brand new existing shape C63's in the country.
To cut a long story short I reached agreement with a dealership which involved trading my car in (with lots of negative equity), a reasonable deposit from me, dealership contribution and a monthly payment that I was more than happy with. I put a £1k holding deposit down and waited for everything to be finalised and was looking forward to signing on the dotted line and taking delivery of my brand new C63. Imagine my disappointment when the dealership rang me up to tell me that MB finance had decided that they were not happy with my deposit and wanted me to put in more than twice what I had agreed with the dealership! I told them to sling their hook and pulled out of the deal. The dealership have come back to me with an improved offer involving a smaller deposit, but still more than I originally agreed, so I've rejected that as well and will await any further offer.
I was just wondering if anybody else had experienced this kind of interference in a deal from MB finance? Just to clarify, I have no credit problems, and obviously as I am able to afford to pay for an run a C63, I have the necessary income to do this.

Biffo

 

[Smiley]

Probably just an indication of how tight credit is today.

 

[Fizzer]

Yes. When I wanted to take the CLS on a PCP the advertised deal included an (approximately) £5000 deposit. Mercedes finance thought i might be a bad risk (I have no income as such just a big bank balance) so they insisted that I put down £20,000 as a deposit (it actually only leaves about £4000 to finance on the PCP) before they would process it. Although its a bit "swings and roundabouts" as it only leaves me with just over £100 pounds a month to pay. Still the same total after 3 years.

 

[A-AvantGarde]

Probably just an indication of how tight credit is today.

+1

It's a shame as you say but unfortunately this is typical of what many people have experienced post credit crunch...

 

[davidjpowell]

I would also imagine that the negative equity might have an effect. MB finance (which is unlikely to be MB - probably resold by a finance house), are presumably uncomfortable at the level of debt owed on the car.

I am quite impressed to be honest. Many of these are decided by the computer on a yes or no basis. Your dealer has clearly put some extra effort in in getting a person to review it.

 

[Palfrem]

The tightness of credit may explain why there seem to be very few brand new cars about or is it just me?

 

[s88]

The finance offer does not normally apply to that model does it?

Which may explain the reluctance.

 

[hawk20]

Guaranteeing the residual on a 6 litre petrol engine, with todays fuel prices, is enough to make anyone wary, I imagine. And doing so for an old model even more so.

I have not heard of anyone having similar problems on more popular models and the MB website is full of PCP deals on these at sensible deposits and lower interest rates than most charge.

 

[Dieselman]

I don't think it's just the low residual bothering MB finance.
The O/p wants to put down a low deposit and has just walked out of a lease ending it early and the car value being negative compared to the outstanding finance.
I suspect they can see the same situation happening again and don't want that level of exposure.

 

[st13phil]

The O/p wants to put down a low deposit and has just walked out of a lease ending it early and the car value being negative compared to the outstanding finance.
I suspect they can see the same situation happening again and don't want that level of exposure.

That's my guess, too. PCP's are fixed-term commitments and someone who wants out of one early is unlikely to be viewed favourably when they ask for another one.

 

[Dieselman]

That's my guess, too. PCP's are fixed-term commitments and someone who wants out of one early is unlikely to be viewed favourably when they ask for another one.

That's a method used when people want to run a car they can't really afford. Run the deal for just over 50% of it's term then stop the deal.

Nothing the finance Co can do but take the hit.

 

[gIzzE]

That's my guess, too. PCP's are fixed-term commitments and someone who wants out of one early is unlikely to be viewed favourably when they ask for another one.

Someone who wants out early is fine, if they settle the amount outstanding, it is someone who uses the 'half way through' rule that is an issue, and although they say you can do it, it does effect your credit history, it will show on file that you have handed something back with negative equity.

 

[A210AMG]

I'm not up to speed with the prices of new C63's but second hand they do seem great value?

I guess if your almost leasing it then it doesn't matter what its worth as long as your happy with the figures and GFV?

Just so happened walked round the block yesterday and spotted this, now ok its second hand but probably can be had for £35k from a dealer with a warranty?

Your search results - Used Car Search - Inchcape Mercedes-Benz

Give there was a Cat D one on here for £27K it sounded pretty good to me. I don't understand these days spending £60K on a car and it losing 10K plus a year.

Leasing of these 'finance' deals do seem to sound good, athough in my mind you never own the car until the final payment or balloon figure. That I would not like.

The above second hand car at £35k I would think in another 2 years would still be worth in the 20K's ? assuming normal millage?

Seems a fair deal? and a much better loss.

 

[davidjpowell]

That's a method used when people want to run a car they can't really afford. Run the deal for just over 50% of it's term then stop the deal.

Nothing the finance Co can do but take the hit.

Not quite. It's 50% of the amount borrowed.

In the case of PCP deals this includes the balloon or GFV and consequently it's not unusual to see the 50% occuring much later in the loan term.

 

[biffothebear]

I would also imagine that the negative equity might have an effect. MB finance (which is unlikely to be MB - probably resold by a finance house), are presumably uncomfortable at the level of debt owed on the car.

I am quite impressed to be honest. Many of these are decided by the computer on a yes or no basis. Your dealer has clearly put some extra effort in in getting a person to review it.

The negative equity aspect was effectively being written off by my deposit, and the deal included a dealer deposit contribution of over £6k, I was more than happy to pay the increased monthly payment, and provided plenty of evidence that my income was more than sufficient to handle the increase.
I suppose - as some posters have mentioned - it could be something to do with the economy at the moment, but I've been buying cars for years and during previous recessions, and I've traded cars in with negative equity, but I've never had these conditions imposed before. It does seem to make a bit of a mockery of actually agreeing a deal with the dealership, you might as well walk into the dealership and ask them to contact the finance company first to see what they will allow.

 

[Dieselman]

It does seem to make a bit of a mockery of actually agreeing a deal with the dealership, you might as well walk into the dealership and ask them to contact the finance company first to see what they will allow.

The finance deal isn't agreed by the Dealer salesman, it's the finance company agree that. Salesmen will agree to anything as long as they get paid.

 

[biffothebear]

The finance deal isn't agreed by the Dealer salesman, it's the finance company agree that. Salesmen will agree to anything as long as they get paid.

Obviously I'm aware of that, what I'm getting at is that with every other car I've bought, I've agreed a deal in the dealership and the finance has followed without the finance company making amendments. What's the point in me spending possibly hours at a dealership and/or on the phone thrashing out a deal I'm happy with only for somebody not party to the negotiations putting their oar in and effectively wasting the time and effort I've put in? Of course they are the ones who are lending the money and can do as they please, but it's never happened before.

 

[davidjpowell]

Obviously I'm aware of that, what I'm getting at is that with every other car I've bought, I've agreed a deal in the dealership and the finance has followed without the finance company making amendments. What's the point in me spending possibly hours at a dealership and/or on the phone thrashing out a deal I'm happy with only for somebody not party to the negotiations putting their oar in and effectively wasting the time and effort I've put in? Of course they are the ones who are lending the money and can do as they please, but it's never happened before.

It's the modern way. Finance Companies, some more than others, have had their fingers burnt. Some have had enough of the market and either stepped out of it, or reduced the business that they do.

My largest client is a major car finance provider, and it's interesting seeing the background from their side.

As an aside my brother in his younger and less prudent days had to fast talk with BMW finance. They said that they did not know how, but there had to be a con, as no-one changed their car as often as he did.... I suspect that in the current climate he would have failed outright though.

 

[hash]

I am about to take a another pcp for a non merc, over 4 years on a 10k pa mileage limit. I will be doing a voluntary termination at 3 years. this way i save the excess mileage charge. Note this has no negative effect on a credit history per se BUT any future car finance company will see it and act accordingly.

The way around this is to secure your new car finance before you do the VT, and then make sure you see that agreement through. Serial VT will result in no finance in these tough times

thanks

 

[hawk20]

The negative equity aspect was effectively being written off by my deposit, and the deal included a dealer deposit contribution of over £6k, I was more than happy to pay the increased monthly payment, and provided plenty of evidence that my income was more than sufficient to handle the increase.
I suppose - as some posters have mentioned - it could be something to do with the economy at the moment, but I've been buying cars for years and during previous recessions, and I've traded cars in with negative equity, but I've never had these conditions imposed before. It does seem to make a bit of a mockery of actually agreeing a deal with the dealership, you might as well walk into the dealership and ask them to contact the finance company first to see what they will allow.

As far as I know you cannot agree a finance deal with an MB dealership. That is a misunderstanding. All finance deals are subject to MB Finance approval and that is usually clearly stated on the documents.

Were you going to pay off all that was owed on your existing finance deal? Or were you using the 50% rule to give the car back and not pay the remaining amounts? This info would help us all understand why you have had problems.