PCP-Can you beat the system?

[Camchan]

Car is on order.

Can pay cash or part cash plus loan. Could also do PCP and keep the capital on hand for other uses.

But question is can I play the system and take out the PCP with the merc contribution and then after three months say get a settlement value and settle. The aim to use the merc contribution as another discount? Anyone done this? Disadvantages? Presume the penalty will be two or three months interest- I haven'the seem the terms yet.

Will probably keep the car 6 years. PCP contribution around £2k

 

[SamW]

Due to FCA ruling, you cannot get more discount by funding a particular way.

Best thing you can do is a 36 month PCP, minimum mileage banding, with little or no deposit and let the payments tick along and then pay off come the end. If the cars upside down then hand back as you'll not exactly be playing the system by paying £18k for a car worth £17k for example.

The benefits of putting in a big deposit are minimal really and will allow you to invest more in art, or Christmas trees, or whatever for the next 3 yrs.

This is just my opinion of course and I'm sure others will disagree.

Also worth noting that if everyone played the system (cash buyers taking finance and settling to take advantage of deposit allowances on the used car scheme for example) then MB will just pull it so no one benefits.

 

[gIzzE]

Due to FCA ruling, you cannot get more discount by funding a particular way.

Yet it still happens.


If they offer you a £2000 kick back for taking finance that is not the same as getting another £2000 discount on the purchase price.

However, they can't penalise you if you pay it off after 8 weeks.

 

[markjay]

Others have asked this question before, and at least one member here said he did this with no issue.

From memory, he did not actually wait 3 months to settle, but used the 14 days cooling-off period to cancel the loan agreement (but not cancel the car purchase as such) and pay MB Finance back the full loan amount - which meant he kept the car and the dealer's contribution.

Nor sure if this is possible in all circumstances (and in fact I would have expected the dealer to retract their contribution once the loan was cancelled, but this is not what happened according to the account posted here).

 

[SamW]

The deposit contribution historically was only associated to finance agreement, now it's simply classed as a discount. Some may say it's still only available thru financing as they get a minimal kickback, but a kickback none the less.

You can settle at any time as it's your right, with no penalties etc. The dealer will suffer a debit back - ie, any commission earned gets pulled back on a pro rota basis starting from the 6 month mark, but don't think dealers make tonnes out of you. An average balance to finance is £25k, the dealer will only get maybe £300 max.

Dealers and manufacturers know what goes on, how you 'play the game' etc, but I feel a lot of it is engineered so the consumer feels happy, whilst driving their metal up the road.

 

[GP801]

My father aged 82 was looking at a new Fiesta. The dealer was openly encouraging him to take the finance option and deposit contribution then pay it all off within the first 2 weeks. All a bit of a game to entice you in.

 

[Rory]

The deposit contribution historically was only associated to finance agreement, now it's simply classed as a discount. Some may say it's still only available thru financing as they get a minimal kickback, but a kickback none the less.

I don't know how the car industry is allowed to get away with this, but it does.

I bought a new Honda a few months ago and there was a £500 incentive to take their 0% PCP. The point of that completely baffles me. The dealer said it's so Honda can keep in touch, but on a car sold with 5yr service and warranty package, they're going to keep in touch anyway.

Of course I can just settle it anytime.

I've seen conflicting stories about cancellation (within 14 days) though - I've seen suggestions that the incentives would be cancelled although on other forums people have reported doing it with no come-back, and they've kept the incentives, such as free servicing.

 

[Camchan]

Thanks everyone for your input. Will have a think about what to do later.
Car not due until June so plenty of time.

 

[m500dpp]

I spoke to MB Finance who told me I could cancel anytime in the first 14 days and under EU rules they cannot levy any charges. I went ahead, got the £1000 deposit contribution then settled without penalty. I phoned and cancelled on the 14th day and was given a further 30 days to settle the balance.

I posted this on detailing world thinking I had pulled off a fairly smart move only to find it is common practice, and many dealers encourage it!

Go ahead, it was the easiest £1000 I ever earned!

 

[m1br]

Yup, as M500dpp says,
It's easy.
And your legal right under the 14day cooling off period if you sing up in a dealership.
There can only be a claw-back of any deposit contribution if the CONTRACT you sign specifically allows for it.
I haven't seen one that does yet, and I have read a few this year for the same reason.

Hilarious nonsense from the White Dove SEAT dealer in Cardiff who said they would pull back the contribution
and cancel the maintenance package offered as an incentive.
But if I "let the PCP run for a few months" then it would be fine.
Utter ********. And I reminded them of the law. They don' half try it on!

Go ahead and make the deal, take the contributions and pay it off the next day.
Dealers are only out to screw as much as possible out of you, play their game against them, every time.

GLHF!
Steve

 

[Waling-C63]

Thanks for the info guys I have mine on PCP and planning on paying it off sooner rather than later.

 

[PenelopePitstop]

Some cars have huge retailer contributions and you can negotiate discount on top of it. I would definitely take it and then pay off straight away. SLK250CDI has around 7K contribution but I doubt it would be possible to get similar discount for paying cash.

 

[Camchan]

So just to close this. I cancelled the credit agreement earlier this week and the merc pcp contribution was not reclaimed. Just the amount of credit to be paid. The acceptance fee is also waived. I did this within the 14 day cooling off period.

 

[Rory]

Annoys the heck out me that cash buyers are "forced" to do this sort thing - to my mind it just shows how list prices are rigged.

This has happened on the last 2 new cars I've bought, a VW and a Honda. I was buying them for my kids and really didn't want them to be caught up in finance hassles.

I refused on the VW - the dealer sales manager started humming and harring about not selling me a car (it was in stock) if I didn't take it, but that daughter has moved around a lot and might have had credit approval issues.

The Honda one was fee free, 0% APR and they gave me £500 after all other discounts to take the PCP. I'm just letting that one run, but it was almost an issue when that daughter wanted to renew her mortgage deal as they check outgoings now.

 

[Bonecho]

So just to close this. I cancelled the credit agreement earlier this week and the merc pcp contribution was not reclaimed. Just the amount of credit to be paid. The acceptance fee is also waived. I did this within the 14 day cooling off period.

Interesting comment from Camchan regarding cancelling a PCP agreement within 14 days but keeping the discount that is only available via a PCP or HP deal. That is my intention but has anyone seen any terms and conditions regarding the incentive as I don't want any comeback from a grieved dealer?

Not sure what was meant by the following comment

Just the amount of credit to be paid

I am thinking that by cancelling you just pay what is owed without any interest paid.

 

[c250blu]

Im in a similar situation as the OP, I could buy a new car outright but something else is telling me I should take out a PCP deal and pay it off monthly.
My situation is I am thinking of buying from a car broker, like 'orangewheels' but would the dealer contribution offer apply if I arranged finance through the broker?

sorry, not want to high jack op thread.

 

[Bonecho]

You only get the discount with MB Finance. I bought my car via a broker and like you could pay cash but at a higher price. You can also get the contribution by buying the car on HP by just borrowing £3000 over 2 years. I was offered this £3000 HP option by two dealers including one via a broker to secure the contribution discount. The total interest is then around £165 which is better than a PCP where you borrow most of the cars value and pay interest over 3 or 4 years with a balloon payment at the end. Even on a cheap MB you will be paying at least £2000 in interest via a PCP.

 

[Rory]

I am thinking that by cancelling you just pay what is owed without any interest paid.

I just withdrew from a VW one on the Tiguan we bought - had to pay the amount borrowed plus a tiny amount of interest calculated on a per day basis (£2.38 per day). No fees to pay.

One thing I hadn't realised is the interest amount is frozen once you make the call and say you want to withdraw. I left it a week just to make sure there was nothing badly wrong with the car (although the emissions scandal hadn't hit then!). VW told me the letter they send will say the payment has to be made in 7 days but in practice (and they confirmed this by email) they allow up to 30 days.

 

[c250blu]

You only get the discount with MB Finance. I bought my car via a broker and like you could pay cash but at a higher price. You can also get the contribution by buying the car on HP by just borrowing £3000 over 2 years. I was offered this £3000 HP option by two dealers including one via a broker to secure the contribution discount. The total interest is then around £165 which is better than a PCP where you borrow most of the cars value and pay interest over 3 or 4 years with a balloon payment at the end. Even on a cheap MB you will be paying at least £2000 in interest via a PCP.

thats a smart move, I will look into this route.

thanks

 

[Camchan]

Interesting comment from Camchan regarding cancelling a PCP agreement within 14 days but keeping the discount that is only available via a PCP or HP deal. That is my intention but has anyone seen any terms and conditions regarding the incentive as I don't want any comeback from a grieved dealer?

Not sure what was meant by the following comment



I am thinking that by cancelling you just pay what is owed without any interest paid.

Sorry if not clear, you are correct the the amount initially agreed to be borrowed was repaid, no interest was paid. The additional contribution from merc was not reclaimed. The dealer has no interest in this, the finance is with merc finance rather than any local dealership. The final payment is with merc finance the dealership is not involved by this stage.