PCP Withdraw vs settlement after a few months

[Mehdime]

Just want to check my understanding of something. I've read this thread and others but was told something by a main dealer (and a well-known one at that!) at odds with what's reported here, so I'm wondering if anything has changed.

I'm buying a California for ca. £65k. I need to complete before funds arrive from overseas, so was thinking of just putting £10k down and signing up for a PCP deal (have automatically qualified). The dealer said I could pay off the PCP at any point - one week, one month, three months, etc., and only pay pro-rata interest. I specifically queried this, saying I had a vague memory with PCP there was a penalty. Nope, they insisted it was pro rata interest only.

After the phone call, looking at this thread and others, it sounds like if I withdraw within 14 days, I will pay pro rata daily interest. But after 14 days if I pay off the PCP I'll have to pay 2 months interest as a penalty.

Can anyone clarify? (Yes, I should read the fine print when it comes through, but I have to base some decisions about moving money around whether to go with this PCP deal or not, so hoping for a quick answer here.) Thanks.

Took a PCP in Ireland. The contract clearly stated that I could pay it off at any time. But if I paid off after the initial cooling period, the full interest for the whole 3 years of the contract were due. So there isn’t any financial benefit to settle it early.

Sounds like the contracts in the U.K. are a bit different though. I’d ring VW financial services, not the dealer, and ask them about early settlement and what interest / penalties would be due.

 

[J............]

Hi, I can’t really help sadly, in the end went down the route of withdrawing within the cooling off period. Thought I’d mention just to say that this was a simple process and no charges applied, just paid off the total amount of the vehicle less the deposit we’d already paid. Calling VW finance and discussing was straightforward.


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[pjm-84]

I took out finance on a s/h JCW with BMW UK for the £500 contribution and paid it off within the 14 day cooling off period at an interest cost of £8ish. (Dealer drew down the loan 4 days before I collected the car) . After 14days they can probably claim loss and expense associated with the loan and your bound by the T&Cs

Business HP / PCP - no 14day cooling off period. Found this out when I bought the company ID3 for the 3k contribution and then couldn't find the 14 day option.....drat.... we did obtain a settlement figure but its wasn't worth paying it off

 

[Andy C Berks.]

I took out a 2 year HP contract with VWFS in June 2023 on a new Ocean. Repaid it mid-term with no penalties, which was in line with what the dealer had said at the outset. i.e. we had no Early Repayment Charges, and interest was only calculated up to the day prior to when we repaid it. I guess the one variation may be that at the time we purchased we had missed out on the 0% finance deals, so maybe they have different early repayment conditions (albeit it wouldn’t make much sense as encouraging early repayment of 0% deals is in VW’s favour). So maybe HP is a better option rather than a PCP deal if you intend to repay early ?