Taking out Skoda PCP for the benefits then cancelling
Discussion
I'm thinking of buying a nearly new Skoda Karoq and am tempted to take it on PCP with Skoda Finance because of the benefits, ( 2 x services, 2 year recovery etc) and then cancel within 14 days. This is a tactic I genuinely would usually avoid as unethical, but in this case I resent the fact that they push people into debt for the sake of some commission. Has anyone done this recently, and did they retain the benefits that came with it after cancellation?
Done it a few times with VWFS, although most recent was Nov 23.
Only one was approved used and that was a Skoda Karoq. The salesman told us to do it to get the service etc package.
On the last one VWFS even waived the daily interest charge. That made me slightly nervous, although I've never quite understood why there is that small daily charge when you Withdraw as it's supposed to be like the agreement never existed.
Only one was approved used and that was a Skoda Karoq. The salesman told us to do it to get the service etc package.
On the last one VWFS even waived the daily interest charge. That made me slightly nervous, although I've never quite understood why there is that small daily charge when you Withdraw as it's supposed to be like the agreement never existed.
CzechRS said:
Check T&Cs but usually pay first month and then pay off in full, no dramas. Did exactly the same on my Skoda - same finance.
If you do that you're Settling. It's more clear cut that you'll keep the incentives but it'll cost hundreds of pounds in interest as you can't just pay it off, you have to ask for a Settlement figure - that figure inlcudes 28 days notice and 30 days penalty.If you Withdraw, the interest charge will be a few pounds. It's a bit of a grey area about keeping the incentives but many people do it with VWFS and they don't take them away. As I said above, I'd done it a couple of times on a new VW and a new Skoda and then a Skoda salesman told me to do it on an Approved Used.
Here’s a real example, from https://forums.moneysavingexpert.com/discussion/61...
The amount charged is correct, by the way.
“I bought a car in March and borrowed £21500 on PCP via VW Financial Services with the intention of paying it off (almost) straight away.
The contract started on March 17th 2020, was set to run for 49 months, had a Rate of interest of 4.84% and had monthly instalments of £298.70.
The first instalment was paid on 15/4/20, £216.68 went towards capital, and £82.02 interest.
I decided to pay the PCP off early and received a settlement figure on 11/5/20 which was paid in full on 08/06/20 (the final day the figure was valid until).
The settlement Figure was £21514.55.
I was debited one further instalment on the 15/5/20 which was then refunded later on.
I have tried to contact VWFS asking to explain why my settlement figure (£21514.55.) was more than the original amount of credit (£21,500) , despite having already paid an instalment of £298.70. They have been very hard to get hold of (partially due to Covid) and have not replied to my messages or returned my calls but have only managed to send out a statement, which does not explain why the total cost of the credit was £313.25.
Is anybody able to explain why the cost of my credit was £313.25 for under 3 months, when it seems as though interest per month was £82.02 for the first monthly instalment?”
The amount charged is correct, by the way.
“I bought a car in March and borrowed £21500 on PCP via VW Financial Services with the intention of paying it off (almost) straight away.
The contract started on March 17th 2020, was set to run for 49 months, had a Rate of interest of 4.84% and had monthly instalments of £298.70.
The first instalment was paid on 15/4/20, £216.68 went towards capital, and £82.02 interest.
I decided to pay the PCP off early and received a settlement figure on 11/5/20 which was paid in full on 08/06/20 (the final day the figure was valid until).
The settlement Figure was £21514.55.
I was debited one further instalment on the 15/5/20 which was then refunded later on.
I have tried to contact VWFS asking to explain why my settlement figure (£21514.55.) was more than the original amount of credit (£21,500) , despite having already paid an instalment of £298.70. They have been very hard to get hold of (partially due to Covid) and have not replied to my messages or returned my calls but have only managed to send out a statement, which does not explain why the total cost of the credit was £313.25.
Is anybody able to explain why the cost of my credit was £313.25 for under 3 months, when it seems as though interest per month was £82.02 for the first monthly instalment?”
Whatever you do, don't cancel.
Instead, phone VW Finance and say you want to 'withdraw' from the contract, that way you keep any benefits.
I did this when buying a 4yr old Yeti from a Skoda dealer a few years ago. I bought the car on a Friday, did a bank transfer to the dealer but put £3k on VW Finance, then on the Monday I phoned VW Finance and withdrew. I had to pay about £3 in interest but then kept the 3yr warranty, free servicing and breakdown cover.
Withdraw, don't cancel or settle.
Instead, phone VW Finance and say you want to 'withdraw' from the contract, that way you keep any benefits.
I did this when buying a 4yr old Yeti from a Skoda dealer a few years ago. I bought the car on a Friday, did a bank transfer to the dealer but put £3k on VW Finance, then on the Monday I phoned VW Finance and withdrew. I had to pay about £3 in interest but then kept the 3yr warranty, free servicing and breakdown cover.
Withdraw, don't cancel or settle.
Edited by The Gauge on Friday 5th September 12:38
Done it with Volvo, VW and MG - withdrew from finance agreement within 14 days and kept whatever incentives they were offering - deposit contributions, free services etc - no comeback at all
Interestingly I was in BMW dealership with my daughter recently and the salesman implied that any benefits of extended warranty, deposit contributions etc would be clawed back unless the agreement was kept in place for at least 6 months 🤔🤔
Interestingly I was in BMW dealership with my daughter recently and the salesman implied that any benefits of extended warranty, deposit contributions etc would be clawed back unless the agreement was kept in place for at least 6 months 🤔🤔
lornemalvo said:
I'm thinking of buying a nearly new Skoda Karoq and am tempted to take it on PCP with Skoda Finance because of the benefits, ( 2 x services, 2 year recovery etc) and then cancel within 14 days. This is a tactic I genuinely would usually avoid as unethical, but in this case I resent the fact that they push people into debt for the sake of some commission. Has anyone done this recently, and did they retain the benefits that came with it after cancellation?
Right, because nothing says moral crisis quite like following the law and mildly inconveniencing a finance company?I do this EVERY time I buy a car on PCP.
CapScarlet said:
Right, because nothing says moral crisis quite like following the law and mildly inconveniencing a finance company?
I do this EVERY time I buy a car on PCP.
I think it's outrageous that car companies are allowed to have different incentives for cash or credit - I thought the law was there was supposed to be no difference.I do this EVERY time I buy a car on PCP.
Bit PH, but it makes it a right pain if you're buying a car for someone else.
Anyway, it seems totally legitimate to play the game. Years ago I was told to do it by a Toyota salesman although we didn't go through with that purchase, and, as I said earlier, the Skoda approved used salesguy told us to do it.
I did ask a sales manager about Withdrawing from finance and he said no-one is bothered, as many people say they're going to pay the finance off but then don't so they (ie the whole industry) aims to get as many people on finance as they can up front and then just accept that a few will drop out.
CapScarlet said:
lornemalvo said:
I'm thinking of buying a nearly new Skoda Karoq and am tempted to take it on PCP with Skoda Finance because of the benefits, ( 2 x services, 2 year recovery etc) and then cancel within 14 days. This is a tactic I genuinely would usually avoid as unethical, but in this case I resent the fact that they push people into debt for the sake of some commission. Has anyone done this recently, and did they retain the benefits that came with it after cancellation?
Right, because nothing says moral crisis quite like following the law and mildly inconveniencing a finance company?I do this EVERY time I buy a car on PCP.
They designed the game. They can’t complain if customers play it.
Sheepshanks said:
I think it's outrageous that car companies are allowed to have different incentives for cash or credit - I thought the law was there was supposed to be no difference.
The problem is that the FCA is spineless and its ‘guidelines’ are meaningless. The organisation doesn’t seem to have any comprehension of what consumers do and don’t understand and don’t seem to care about how accurately or clearly finance is sold.We've been trying to buy an AUC for Mrs Mark83 at a large dealership chain as a cash purchase and that's where the conversations or negotiations hit a wall, no more calls nor emails received or returned. Presumably cars are just a vehicle (pun intended) to sell a finance package now.
We're going to view a car at the weekend and will try a new approach - negotiate the monthlies to reduce the overall price then there's two options, at the 11th hour, get the debit card out, or sign up for the PCP and withdraw within 14 days, clearing the balance?
We're going to view a car at the weekend and will try a new approach - negotiate the monthlies to reduce the overall price then there's two options, at the 11th hour, get the debit card out, or sign up for the PCP and withdraw within 14 days, clearing the balance?
You're better off using the finance. With the Skoda PCP there was a 1750 deposit contribution which came off the purchase price, withdraw from the finance in the 14 day cooling off period, keep all the perks. It enabled me to buy an auc car, keep all the OEM warranty etc and pay the same as I would have at an independent dealer. But to answer your question, yes the whole system is set up for finance. Cash in this instance is no longer king.
Mark83 said:
Presumably cars are just a vehicle (pun intended) to sell a finance package now.
I've used that phrase before.Ask the sales person a question about the car and they probably won't know. Ask why you should use PCP rather than pay cash and they'll wax lyrical about the benefits of PCP.
I was late cottoning on to this, but buying wife's Tiguan about 10yrs ago I said I wanted the car on PCP (as there was a big deposit contribution) and there was a night and day difference in the salesman's attitude compared to what I'd experienced before. Everything I asked for he just said "yes".
In past encouters I've twice had sales managers storm off in a huff when I insisted on cash.
Just to weigh in, I did this on the purchase of a secondhand, 18 month old, Mark 8 GTI Clubsport from a VW main dealer and it was very easy.
The finance was agreed on the minimum term with corresponding maximum payments with a hefty deposit, but I actually really didn't care as I knew I'd be withdrawing after a few days. For my efforts they chucked in a £750 discount, extra year warranty and two years free servicing. For the sake of one 5 minute call to VWFS and £30 in daily interest it's an absolute no brainer. The warranty and servicing still show in the the VWFS portal.
The finance was agreed on the minimum term with corresponding maximum payments with a hefty deposit, but I actually really didn't care as I knew I'd be withdrawing after a few days. For my efforts they chucked in a £750 discount, extra year warranty and two years free servicing. For the sake of one 5 minute call to VWFS and £30 in daily interest it's an absolute no brainer. The warranty and servicing still show in the the VWFS portal.
downthepub said:
Just to weigh in, I did this on the purchase of a secondhand, 18 month old, Mark 8 GTI Clubsport from a VW main dealer and it was very easy.
The finance was agreed on the minimum term with corresponding maximum payments with a hefty deposit, but I actually really didn't care as I knew I'd be withdrawing after a few days. For my efforts they chucked in a £750 discount, extra year warranty and two years free servicing. For the sake of one 5 minute call to VWFS and £30 in daily interest it's an absolute no brainer. The warranty and servicing still show in the the VWFS portal.
Was this recent? Did you cancel/withdraw within 14 days or did you "settle" after the 14 days? Cancelling/withdrawing risks losing the perks?The finance was agreed on the minimum term with corresponding maximum payments with a hefty deposit, but I actually really didn't care as I knew I'd be withdrawing after a few days. For my efforts they chucked in a £750 discount, extra year warranty and two years free servicing. For the sake of one 5 minute call to VWFS and £30 in daily interest it's an absolute no brainer. The warranty and servicing still show in the the VWFS portal.
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