Paying off VW finance?

[DougL]

If you take finance with a VW contribution and cheap service pack, when do you pay off the finance? Just signed an agreement and pick up the car tomorrow.

There is some suggestion that you can pay it off before 14 days, but I was considering paying off the bulk of the agreement (£20k of £22k) then settling the last bit in a couple of months. I pick up the car tomorrow and go off on holiday next weekend so need to do any business next Friday.

Benefits I have got are the £1k dealer contribution and the cheap (£149 two year servicing pack), so don't want to forfeit anything.

[monkeyhanger]

If you take finance with a VW contribution and cheap service pack, when do you pay off the finance? Just signed an agreement and pick up the car tomorrow.

There is some suggestion that you can pay it off before 14 days, but I was considering paying off the bulk of the agreement (£20k of £22k) then settling the last bit in a couple of months. I pick up the car tomorrow and go off on holiday next weekend so need to do any business next Friday.

Benefits I have got are the £1k dealer contribution and the cheap (£149 two year servicing pack), so don't want to forfeit anything.

VW won't let you finance less than 70% of the RRP of the car (discounts achieved will be considered as deposit paid), If you want to pay it off, you'll have to pay it all off, not most of it.

Your deposit contribution won't be grabbed back if you settle in full within the 14 day cooling off period, you will pay daily interest on the interim (£5-6 a day until you tell them you're settling).

If you settle after the 14 day period, there'll be a penalty payment of 2 months interest - your intentions of not settling it all immediately will cost you somewhere between £300 and £400 on a performance Golf in the early days when the interest portion of your monthly payment is at its highest.

[DougL]

Thanks monkeyhanger - much appreciated. I was hoping you would answer as I know you are the finance guru. Finance starts tomorrow so I will call and withdraw next Friday.  The GTI has been replaced with a new model Tiguan, so this is what has been financed...

[saigonmark]

I recently bought an Audi A1 (financed via PCP using Solutions VW Finance) taking advantage of the dealer and manufacturers deposit contribution. I called them up to withdraw from the agreement two days after taking delivery of the car. They give you a settlement figure there and then and follow it up with a letter stating the time period you have to settle in full. Those two days cost me about £5 in interest charges. I transferred the money online and a few weeks later received a letter from VW Finance stating they no longer held any interest in the car. I wouldn't wait a week if I was you, call them straight away to withdraw and the interest charge will be fixed on that day.

[monkeyhanger]

^I did the exact same thing for the wife's A1  almost a year ago. It was only a £500 contribution up for grabs, but £500 is still £500.

[kitbag1984]

What a good idea. So if I were to cancel the day after receiving the car. Apply for a cheap loan. Then pay vw off with that loan I could save myself some serious interest whilst getting the dealer contribution. Nice.

[monkeyhanger]

What a good idea. So if I were to cancel the day after receiving the car. Apply for a cheap loan. Then pay vw off with that loan I could save myself some serious interest whilst getting the dealer contribution. Nice.

Yes you could, i'd get the new loan arranged first though as the money could take a week to cone through following approval, and you may get refused as just taking on a sizeable car loan could see the loan assessors of the cheap loan decide you can't afford both (even if they know the intent is to pay off yhe VW finance with the new loan).

[cosmos]

I'm surprised it's possible but when I bought mine I told them I was going to be paying cash and was very upfront about it. The dealer insisted I take a PCP deal with the service plan and then just pay it off straight away - though I think they hoped I'd pay it off after about 3 months as that way the dealership gets a better rate of commission.

When I signed up the deposit contribution was £1250 but by the time my car arrived VW had increased that to £2000 which I got along with the service plan. I paid it off a week later and it cost me something like £18 interest so it was basically an extra discount of £1982.

It doesn't seem to make any sense but it's all there in black and white in the terms and conditions. It seems to be happening quite frequently though so maybe VW will start looking at their deposit contribution, I wonder if they could insert a clause that allows them to claw this back if the finance plan is paid off within a certain time?

[monkeyhanger]

^ I'm sure it's a matter of law, they'd need the laws regarding credit changed to claw back the deposit. If they could do it then i'm sure they would be doing it already.

[DougL]

Car finance arranged. Car paid for less the £1k deposit contribution. I had the correct full amount for the car in one of my online accounts and paid the deposit from that account. Car was picked up on Saturday and I called today to cancel the agreement and paid the amount via bank transfer and faster payments. Bizarrely they added no interest, but just charged me the loan amount, although they did say that the daily interest was £3 per day. Funnily enough once I subtracted the 2 year service agreement from the figure, I seem to have managed to be £1004 better off. (I have the service pack at £149 which still stands according to VWFS and another £855 in my account). Bonus.