PCP-Can you beat the system?

[Camchan]

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.

I have bought two cars via orange wheels including the merc. They don't organise the finance they introduce you to a dealer at the agreed price and then you do the deal if it suits. No other merc dealer could match the price I paid. However make sure you are clear what the price includes in terms of any contribution as on some brokers the pcp contribution is included in the ticket price on the website.

What will happen is that the merc contribution will be less than advertised on the main merc website, not sure why but that is what happened to me. The pcp contribution ws around 2k rather than 4.5k but was still better than any other offer I had.

 

[uumode]

I have bought two cars via orange wheels including the merc. They don't organise the finance they introduce you to a dealer at the agreed price and then you do the deal if it suits. No other merc dealer could match the price I paid. However make sure you are clear what the price includes in terms of any contribution as on some brokers the pcp contribution is included in the ticket price on the website.

What will happen is that the merc contribution will be less than advertised on the main merc website, not sure why but that is what happened to me. The pcp contribution ws around 2k rather than 4.5k but was still better than any other offer I had.

I believe the £4.5k contribution is the Mercedes contribution
Of which £2k is MB finance
£2.5k is the MB dealer which is factored into the car price as a discount

Since your car is heavily discounted by the dealer, the £2.5k is combined into your overall discount, rather than attributed to the PCP contribution.

 

[Rory]

However make sure you are clear what the price includes in terms of any contribution as on some brokers the pcp contribution is included in the ticket price on the website.

I found this with our recent VW purchase. Broadspeed I felt was confusing to the point of almost being deceptive. DriveTheDeal was very clear.

I mainly used CarWow - they don't give you a price, they let dealers bid. The VW PCP offer was £2750 off, but all of the dealer quotes (think there was 5 of them bidding) had the VW contribution at £1750 - apparently the other £1000 is covered by the dealer and the dealers rolled that up into their total discount.

 

[Carrsey]

Is MB finance actually MB or is it unwritten by a bank like Santander.. Just I know Ford and Volvo are Santander.

 

[uumode]

BMW is sightly more complex. They have 3 contributors to the deposit

1. BMW finance
2. BMW UK
3. Dealer

 

[Rory]

These things are right pain in some circumstances. Without meaning to be all billy big potatoes, I'd rather just buy cars outright, and it's been very annoying when I've bought cars for my kids - one was a VW and the dealer nearly exploded when I refused the PCP (which would have meant a discounted servicing package) but I'm not sure that daughter would have got through the credit checks. She has an OK job, but moves around a lot. At one point I didn't think the dealer was going to let me buy the car (which was in stock)!

I got the other daughter to take the PCP on her car, but it was 0% with no fees so I pay her the money and have let it run. However it nearly caused a problem when her mortgage deal ran out and in the checks they do now they picked up she was paying out for it.

 

[uumode]

I agree, would prefer to buy the car outright with no interest charges. But can't afford £35k cash in one go.

 

[Bonecho]

Well I have had my car 11 days now bought with a £3000 HP loan to secure the MB discount. On Monday I will be phoning MB Finance to cancel within the 14 days. Has anyone seen or signed anything that states the discount has to be paid back if finance is cancelled within 14 days?

I know by reading the posts here that no one seems to be paying it back but I would just like to know that there is nothing in writing that I have missed.

 

[Camchan]

As you have signed the finance this should have been discussed and explained at sign up? When I picked up mine we went through the contract in detail and everything was explained and all queries answered.the chap was very thorough.

Page 2 of the agreement, withdrawal section starts the rules on cancelling.

That said mine was a pcp yours was a HP, not sure if that means there is a difference.

 

[Camchan]

Is MB finance actually MB or is it unwritten by a bank like Santander.. Just I know Ford and Volvo are Santander.

Can't say for sure, nothing in the documentation. Perhaps they self fund. JBD would know?

 

[Bonecho]

Well I phoned MB finance up today and said I wanted to settle the balance as I was within the 14 day cooling off period. It took all of 2 minutes with me paying £3000 by debit card.

The lady did ask why I was settling so I gave her an honest answer and said I only borrowed £3000 on an HP agreement to get the MB discount. No problem was the reply. Now I will wait to see if the dealer kicks up a fuss as he said wait 6 months but with total interest of only £155 over 2 years no one was going to make much money out of me.

I was not aware of signing any paperwork that said the discount had to be paid back and I could not find any T&C on the MB website that referred to paying it back if the finance was cancelled due to early settlement.

 

[Rory]

The lady did ask why I was settling..

That's interesting - on the VW I'd read elsewhere that finance companies are not allowed to ask the reason, and the lady I spoke to certainly didn't, and couldn't have been more friendly (pity the rest of VW's staff aren't like that).

 

[Bonecho]

Well two weeks have now passed since I paid the loan back within the 14 day cooling off period that was taken out just so I could pick up the MB discount for taking out finance.

I thought the dealer might have wrote to me about their displeasure but I haven't heard a thing, which I am please about to say the least.

 

[uumode]

Does anyone have the terms and conditions for MB finance for the section specifically around cancellation of the PCP agreement>

 

[Bonecho]

After I signed the papers I was sent an agreement through the post entitled Adequate Explanations but mine was a HP agreement. As it was still a loan I can't see it would be any different.

Right to Withdraw

You have a right to withdraw from this agreement within 14 days starting with the day you signed the contract. You will then be liable to repay the amount of credit to us without delay within 30 calendar days together with interest from the date you signed the agreement until the date you repay the credit. Further details are are set out in the pre-contract information.

I cancelled on day 13 and payed by debit card over the phone with no interest taken. This is all part of the Consumer Credit Regulations which they quoted at the top of the page.

 

[Rory]

After I signed the papers I was sent an agreement through the post entitled Adequate Explanations but mine was a HP agreement. As it was still a loan I can't see it would be any different.

Right to Withdraw

You have a right to withdraw from this agreement within 14 days starting with the day you signed the contract. You will then be liable to repay the amount of credit to us without delay within 30 calendar days together with interest from the date you signed the agreement until the date you repay the credit. Further details are are set out in the pre-contract information.

I cancelled on day 13 and payed by debit card over the phone with no interest taken. This is all part of the Consumer Credit Regulations which they quoted at the top of the page.

My bold.

I just did this with VW and as you quoted above you would have had to pay interest from the start until you withdraw. It's then frozen and you have 30 days to make the payment - in my case it was £20 odd pounds on £24K.

Also, I wouldn't leave it as tight as you did! Unless you just suddenly decided, there's a big difference going from withdrawing to settling which kicks in after 14 days. And note it's the date you signed the agreement - I was giving conficting information about whether it is strictly that date, or the date you collect the car as they may not be the same.