Settling PCP early?

[Daglass]

I'm in the process of ordering up an A6 Avant and have been fortunate enough to sell my current car privately (and well above what the dealer was offering).
This has left me in the position that I was looking to do a cash deal for the new car.
However, the salesman...or should that be accounts manager...has advised that a much better deal can be got by taking out a PCP.

Granted the initial cost through the PCP is much lower but the overall cost is off putting.

Is it possible to settle the PCP early and avail of the lower price or do you have to settle the full amount that would be incurred through the monthly payments?
I've heard conflicting reports on this.

Can anyone help?
Thanks

[M1tchy]

Yes you can settle early - defiantly.

Take the deal out, give it a month or two until the paperwork has all turned up and then ring up for a settlement figure and pay it all off. Easy. You won't pay the interest in the outstanding balance either, only to the day you have the agreement out.


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[bingodingo]

You have the right to cancel within the first 14 days. I did this recently. Took out the car on finance due to the extra 4k off being offered by the dealer for taking finance. A couple of days after getting the car I called VWFS to cancel. They were very helpful and it was very straight forward.



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[robes401]

I did this after 1 week of ownership using the right to withdraw within 14 days. Very easy way to save £2250 and all done via emails as I initially emailed audi finance outside of phone opening hours. In my case I did have to take out a bank loan to help settle the amount at much better rate than the audi finance rate. As above only had to pay the 1 week of interest accrued. I was a bit worried about doing this, but would do the same again in the future.

[belly buster]

As above, yes you can definitely do this. Call Audi (VW) finance and ask for a settlement figure within 14 days (don't leave it too late). This is a legal right. You should have no problems.

[Whippy53]

Easy, 1 call. Saved thousands.

[Daglass]

Thanks for all the replies.
this is great news.
looks like i will be signing on the dotted line tomorrow.

[chesterfield]

I've been advised that if you settle the finance in the first 6 months, then the commission that the dealer would have earnt on the finance deal, will not be paid.

Therefore its great for the buyer as you get the deal and can settle finance. The dealer may lose out though, so wouldn't expect them to be too happy.

Though I don't know what penalties/charges are incurred if you leave it 6 months before settling the finance.

[newA6]

i did exactly that, took out pcp to get additional discount then within 14 days asked for a settlement figure to pay it off and it was finance amount plus a few days interest, so cost me just a few quid - well worth doing, I would say even if you needed a decent bank loan as amount payable would be less than pcp

[belly buster]

I've been advised that if you settle the finance in the first 6 months, then the commission that the dealer would have earnt on the finance deal, will not be paid.

Therefore its great for the buyer as you get the deal and can settle finance. The dealer may lose out though, so wouldn't expect them to be too happy.

Though I don't know what penalties/charges are incurred if you leave it 6 months before settling the finance.

You can always a debt early - again that is another legal right. There may be charges / levies after 14 days - this will depend on the small print of the contract.

Also don't ever feel bad for the dealer. For them it's just a numbers game; they know a % will settle early and they make hay on the rest.

[Moogie]

Definately withdraw within 14 days. Be careful of your wording to ensure you make it clear you are using your right to withdraw from the contract rather than paying the loan off early which are 2 different things. The latter incurrs an admin fee.

[Daglass]

Definately withdraw within 14 days. Be careful of your wording to ensure you make it clear you are using your right to withdraw from the contract rather than paying the loan off early which are 2 different things. The latter incurrs an admin fee.

That's very useful advice.
I will look online for an example of a letter

[Whippy53]

It's very simple, when your letter arrives it will have a phone number on it, this takes you to an automated service which tells you how much is outstanding. This automatically generates a second letter with this info and instructions on how to pay it off. No mention of charges, interest or otherwise. Write out a check, get to them and Bobs your fathers brother. Nothing is, or can be simpler.

[Daglass]

It's very simple, when your letter arrives it will have a phone number on it, this takes you to an automated service which tells you how much is outstanding. This automatically generates a second letter with this info and instructions on how to pay it off. No mention of charges, interest or otherwise. Write out a check, get to them and Bobs your fathers brother. Nothing is, or can be simpler.

Thanks for the update.
Just signed off on my order.
I assume the letter with the finance number etc doesn't arrive until I get the vehicle.

[Whippy53]

In my case about five days later.

[burningoil]

Hi, Thinking about 2nd hand golf on PCP. Dealer contribution £500 and 3 annual services. When do i withdraw from agreement ? - within 14 days or after. dont want to lose the right to get the 3 services. Any thoughts ? Thank you PS APR is approx 11% so not competitive

[Hellodave.]

Hi, Thinking about 2nd hand golf on PCP. Dealer contribution £500 and 3 annual services. When do i withdraw from agreement ? - within 14 days or after. dont want to lose the right to get the 3 services. Any thoughts ? Thank you PS APR is approx 11% so not competitive
Always within the 14 days; after that you'll be settling early instead of withdrawing from the agreement, which will cost you a lot more!

I'm assuming a VW would work the same as Audi (it's all done through VWFS) where the service agreement is tied to the car on purchase, not to the finance. Therefore cancelling the finance makes no difference - you keep the free servicing.
The dealer contribution is the same - that's between the dealer and VWFS so withdrawing makes no difference. Of course the dealer may try and convince you otherwise - when we bought ours they said "I think you can only withdraw after 3 months" - nice and vague (and knowing full well that was rubbish)! I suspect 3 months is when they get their commission!

[johnsimcox]

Always within the 14 days; after that you'll be settling early instead of withdrawing from the agreement, which will cost you a lot more!

I'm assuming a VW would work the same as Audi (it's all done through VWFS) where the service agreement is tied to the car on purchase, not to the finance. Therefore cancelling the finance makes no difference - you keep the free servicing.
The dealer contribution is the same - that's between the dealer and VWFS so withdrawing makes no difference. Of course the dealer may try and convince you otherwise - when we bought ours they said "I think you can only withdraw after 3 months" - nice and vague (and knowing full well that was rubbish)! I suspect 3 months is when they get their commission!
VWFS allows settlement at any tim during the agreement with no penalty, you just pay the interest owing up to the day you settle so should not cost you any extra whether you withdraw during the statutory 14 day cooling off period or settle later.

To burningoil is the PCP being done with a VWFS agreement or via the dealer's own financial services provider as if it is the latter then there may be penalties for settling after 14 days due to different Ts & Cs

[Whippy53]

Always use vwfs.

[Rorry]

...should not cost you any extra whether you withdraw during the statutory 14 day cooling off period or settle later.


Woulldn't there be the set-up, doc and final payment fees if you settle? If you withdraw, there should be none of those. They could be a few hundred pounds.

It baffles me why they don't ask for the deposit contribution back though (if you withdraw).

[burningoil]

its with vwfs - not the dealer. In fact the p/x deal is cr*p - its only the chance to bail out within 14 days that makes the whole thing attractive and get the £500 deposit contribution and three annual services. I am sure if I ask for an early termination after 14 days - they give me a quote to settle, I save some interest but there may be some fees - approx a couple of hundred £

[johnsimcox]

Woulldn't there be the set-up, doc and final payment fees if you settle? If you withdraw, there should be none of those. They could be a few hundred pounds.

It baffles me why they don't ask for the deposit contribution back though (if you withdraw).

yes, but there would be no penalties, such as requiring you to pay all of the interest that would have been due had the deal gone full term. Agree with you that they do not try to claw back any of the incentives they offer if you cancel during the 14 day period. But I guess if they did then all that would happen is that people would simply settle on the 15th day to avoid it

[Whippy53]

I had no fees, just the interest on the sum for the first month, I settled after four weeks.

[Rorry]

I had no fees, just the interest on the sum for the first month, I settled after four weeks.

The Acceptance Fee and Option to purchase fee might have just been built into the total. Perhaps you avoid them if you never make any monthly payments. :shrug:

[burningoil]

Will try to do it within 14 days. Could be a challenge as signed docs yesterday and need to get the cashback from them. not getting car until next week

[johnsimcox]

Will try to do it within 14 days. Could be a challenge as signed docs yesterday and need to get the cashback from them. not getting car until next week
Date clock does not start until you take delivery of the car. Also Audi is pretty good about processing the documents so you may find that even if you have not received the paperwork you can still cancel the finance. All you need is the agreement number and details of the car

[colinstone]

Resurrected this thread as I am interested in a Solutions PCP for a VW Golf, and then withdraw. I am however trying to read a typical VWFS PCP contract. Grateful if someone who has one can help me, redacted as required. I just want to read the Terms and Conditions in the contract for anything on returning dealer contribution or servicing plan. More up to date the better.
Thanks.

[johnsimcox]

Resurrected this thread as I am interested in a Solutions PCP for a VW Golf, and then withdraw. I am however trying to read a typical VWFS PCP contract. Grateful if someone who has one can help me, redacted as required. I just want to read the Terms and Conditions in the contract for anything on returning dealer contribution or servicing plan. More up to date the better.
Thanks.
I have just looked at the agreement for my wife's Golf, bought in March this year. As far as I can see if you settle the deal early, even the day you get the car, there is no requirement to return any f the incentives. VWFS seem to use the term "withdrawal" to mean cancel the deal before you take delivery as opposed to settlement which is after the car is delivered. If you plan to settle quickly I would suggest you go down the early settlement route to avoid any issues rather than cancel the deal under your statuary rights. I know son have commented that their Audi dealers have asked them to not settle for 6 months as they will lose the payment from Audi but there is no obligation on you to do this.

[Holymoly]

Yes you can settle early - defiantly.

Take the deal out, give it a month or two until the paperwork has all turned up and then ring up for a settlement figure and pay it all off. Easy. You won't pay the interest in the outstanding balance either, only to the day you have the agreement out.


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You're only giving it a month or two in order for the garage to get their commission. Any earlier and a cancellation would mean they don't get it paid over. You can cancel it the next day. Personally I abhor this trend of dealers almost forcing people to take out these deals.

[colinstone]

I have just looked at the agreement for my wife's Golf, bought in March this year. As far as I can see if you settle the deal early, even the day you get the car, there is no requirement to return any f the incentives. VWFS seem to use the term "withdrawal" to mean cancel the deal before you take delivery as opposed to settlement which is after the car is delivered. If you plan to settle quickly I would suggest you go down the early settlement route to avoid any issues rather than cancel the deal under your statuary rights. I know son have commented that their Audi dealers have asked them to not settle for 6 months as they will lose the payment from Audi but there is no obligation on you to do this.

Thanks. I understand that there is a "Right of Withdrawal" in the first 14 days, with no fees, and then an"early settlement" which will have some fees inc the initial arrangement fee of £125. I was just wondering whether RoW or ES was preferable? With ES one has used the PCP, albeit very briefly, and it will cost a little more, but not so significant in the overall scheme.

[wildbore]

Thanks. I understand that there is a "Right of Withdrawal" in the first 14 days, with no fees, and then an"early settlement" which will have some fees inc the initial arrangement fee of £125. I was just wondering whether RoW or ES was preferable? With ES one has used the PCP, albeit very briefly, and it will cost a little more, but not so significant in the overall scheme.

I suggest RoW: I think I paid about £30 in total when I withdrew from my contract. There was no arrangement fee costs or anything else held back, only the interest on the 5 days or so that I had the loan. It is also better for the dealer if you pull out on RoW - there is no comeback on them that way (don't ask me why, that is just what my dealer told me when I asked which method I should use to cancel the contract).

[Aero97]

We did this with my wife's Golf - bought it on PCP and exercised the right of withdrawal 48 hours later by paying off the finance. We weren't required to give up the 3 years free servicing or the dealer contribution and there were no extra costs.

[kennyh]

I too have just cancelled my PCP within the 14 days under the Right to Withdraw.

One of the dealers sales guys said that my Servicing (2 free services for A7) would lapse - but sounds like that was mis-information.

Can anyone confirm that the free servicing still stands? Have they had confirmation from Audi Financial Services of that fact?

[Aero97]

We still got our 3 years free servicing on the Golf which was on a VWFS PCP deal, so I don't see why it should be different for Audi as its the same finance provider?

[kennyh]

After speaking to Audi Finance today I can confirm that the free servicing still stands after the PCP contract is terminated (under Right of Withdrawl).

So all is good!