Finance and deposit contribution

[SuperSpurs106]

Hi there

I have just bought my car. I was looking to pay cash but they said if I put some on finance they would give me a £600 ‘deposit contribution’ ie if you take out some finance we’ll knock £600 off.

I have the money to pay the finance off and if I do this within 14 days there will be no interest payable.

My question is…if I do this, can the dealer claw back my deposit contribution? I believe they can’t as my agreed purchase price is now separate to the finance agreement.

Has anyone else been in this position?

TIA

 

[st13phil]

if I do this, can the dealer claw back my deposit contribution?

No, they can't.

Has anyone else been in this position?

It's a very common practice, so you'll by no means be the first person to have done it.

The salesman may not be that pleased though because he'll lose his commission on the sale of the finance.

 

[SuperSpurs106]

No, they can't.

It's a very common practice, so you'll by no means be the first person to have done it.

The salesman may not be that pleased though because he'll lose his commission on the sale of the finance.

Thank you.

I asked the salesperson if there was any room for negotiating on price and she said no because of Treating Customers Fairly (people who buy online can’t negotiate on price so she wouldn’t let me). Lo and behold, two days later she called me and offered me £600 off if I was to take out finance. She also said ‘I’m not supposed to tell you this but you can pay it off after 6 months). In other words, her commission can’t be clawed back if the finance is in place for 6 months.

I don’t like being bullshi**ed!

 

[SamW]

As a consumer in a heavily regulated area (secured vehicle finance under FCA), you are very protected whichever way you turn, but play the game a little bit.

If everyone that is eligible took the finance just for the deposit contribution and then settled immediately, then then might no longer offer it.

And is a few quid on the dealers bottom line that big a deal if you settle after the debit back time?

Do as you see fit, it will not matter either way, but IMO I always try and finish my transactions as a win/win.

 

[SuperSpurs106]

As a consumer in a heavily regulated area (secured vehicle finance under FCA), you are very protected whichever way you turn, but play the game a little bit.

If everyone that is eligible took the finance just for the deposit contribution and then settled immediately, then then might no longer offer it.

And is a few quid on the dealers bottom line that big a deal if you settle after the debit back time?

Do as you see fit, it will not matter either way, but IMO I always try and finish my transactions as a win/win.

Thank you.

Can I check then that you are in agreement with the fact that I can pay off this finance immediately and there will not be an attempt to ‘claw back’ my deposit contribution from me?

 

[SamW]

Yes, you can settle straight away without penalty

 

[Wearsthefoxhat]

I took the MB finance on our new V class.. massive discount for taking it. Drove home and paid it off the next day. On the t and c’s it stated that I could do this within 14 days…
salesman also confirmed this when I asked, just incase I won the lottery that weekend..

 

[Cmonyoureds]

Kind of muddy’s the waters, but is it now not illegal for dealers to make commission from car finance? If so how can they then offer a discount if you take a car on finance compared to buying outright?

 

[Doodle]

Kind of muddy’s the waters, but is it now not illegal for dealers to make commission from car finance? If so how can they then offer a discount if you take a car on finance compared to buying outright?

Not at all, only when you're not made aware that it's happening. I'm pretty sure they don't even have to tell you how much unless you ask specifically.

 

[SuperSpurs106]

Kind of muddy’s the waters, but is it now not illegal for dealers to make commission from car finance? If so how can they then offer a discount if you take a car on finance compared to buying outright?

It’s a joke. I was paying cash and asked for a discount. She said no under ‘Treating Customers Fairly’. Then she said I’ll knock £600 off if you take out some finance. How is that fair to customers paying cash?

They just make it up as they go along.

 

[dismark]

In your case, as long as you agree to the purchase price and the dealer provides that contribution, it typically remains valid even if you pay off the finance within 14 days. The contribution should be considered part of the deal, separate from the financing. I faced a similar situation when I purchased my last car, and I did some research through robinhood financial services to understand how these contributions work.

 

[MikeInWimbledon]

It’s a joke. I was paying cash and asked for a discount. She said no under ‘Treating Customers Fairly’. Then she said I’ll knock £600 off if you take out some finance. How is that fair to customers paying cash?

They just make it up as they go along.

The joke is that people buying Finance don’t realise just how much they’re being ripped off by borrowing money to finance something that bit extra that they don’t really need.

And how much they’re being ripped off by “chip insurance” and “wheel insurance” and so on.

The sweetener is coming from the offshore finance company, not the dealer, so it’s not “his” to give.

But that said, in any market but especially this post- post-covid supply chain market, just ask / insist / shop around and you’ll get a deal. If you can be bothered. End of the month is good, as is post- British Summer Time