'Free services' with VW finance...

[Wdw92]

Hi all

Picked up my MK7.5 GTD in tornado red with the dsg box today and have to say it looks great, especially with the Bressica alloys!

There was one question that the dealer could not give me a definitive answer on however...

So I have taken the finance package, with which comes two 'free' services. I did the same back in 2014 with another Golf, where the next day I paid off the finance balance and bagged the services. I posed this same scenario to the salesperson today - 'if I pay the finance off tomorrow, do I still get the services?'.

His reply was mixed, initially telling me that the finance would need to run for a minimum of 7 payments (essentially 7 months) then I could pay it all off and keep the services. There is no documentation anywhere that says a minimum amount of payments are required to secure the services, only that the early settlement of finance incurrs a standard £10 fee. He then said that a 'few people' had settled their finance before this 7 month period, only for the finance company to 'claw back' those two free services...

So what do you guys think the crack is? Is there some unspoken 7 month rule these days that I don't know about? Or can I just tootle off down to the bank, settle my finance next week and bag those two services?

Also, apologies for the somewhat boring first post!

Cheers

 

[the]

My guess would be the "free" services that come with leaving your financing through VW probably are not worth the money you're going to lose in interest. The only goal of the dealer is to keep your financing as long as possible to make money. Most salesmen get bonuses for financing, and potentially lose that bonus if you don't keep your financing with VW for X period of time. Personally, I would forget about the free services and focus on getting the lowest interest rate possible with my credit union.

However, it you should wait on someone more experienced with VW financing to confirm or correct me.

 

[golfdave]

Although in the UK I have no idea on car financing. I have always paid cash.....well Debit card or cheque!

 

[SRGTD]

@Wdw92; Under UK Consumer Credit legislation, finance contracts have to include 14 day cooling off period from the start date of the contract to give you time to consider whether you want to change your mind and withdraw from the contract without any penalty to you.

Your VWFS PCP contact will include a clause to cover this 14 day cooling off provision, so there should be no requirement to make 7 payments before you can pay off the finance. I dare say the salesperson has told you there is this requirement because if you withdraw from the contract within the cooling off period, they probably don’t get their commission payment on your finance agreement. Also, if you withdraw from the finance agreement within the cooling off period, you get to keep any finance deposit contribution from VWFS that might have been on offer when you ordered your car.

As for the fee servicing - normally, the agreement covering the services is completely separate from the PCP and you should get a separate contract agreement document covering the services. If so, then withdrawing from the PCP within the cooling off period shouldn’t have any impact on the agreement with VWFS covering the services.

From my own personal experience, when I bought my new car last year, I took VW’s PCP finance to get the benefit of their finance deposit contribution - I didn’t want the finance (I exercised my right to withdraw three days into the 14 day cooling off period and settled the finance in full), but taking it was a no brainer as you get to keep the finance deposit contribution - so effectively the deposit contribution is free money.

I also bought a cheap service plan when I ordered my car that covered the first two services; VW weren’t offering free servicing at the time - it cost me £199 for two years servicing. When I got the documentation from VWFS, the service plan agreement was completely separate from the PCP so exercising the right to withdraw from the PCP didn’t affect the service plan in any way.

Bear in mind that if you exercise your right to withdraw from the PCP finance contract under the 14 day cooling off period, you need to tell VWFS that you are exercising your right to withdraw and not that you want to terminate or cancel. VWFS will give you a settlement figure, including daily interest due from the start date of the agreement up to the day you tell them you want to withdraw (I think the daily interest charge was £2.07 a day last year, so I paid just £6.21 interest). You then have 30 days to settle the finance. Roughly three weeks after making the payment, I received a letter from VWFS advising they no longer had any financial interest in my car.

I did ask VWFS at the time I exercised the right of withdrawal under the PCP to confirm my service plan was unaffected by this action, and they confirmed this to be the case.

 

[Wdw92]

Many thanks for the thoughts, I agree with your points @SRGTD.

I rang VW financial services today, on hold for 30 mins (they do warn you that call volumes are very high in fairness). Anyway, I managed to get confirmation in an email that the services will remain in place, and not be 'withdrawn' if I exercise my right to withdraw within 14 days.

I can only presume the dealer just didn't know this... Or was being intentionally vague in order to secure a comission. I couldn't possibly say which.

Now to get on with many more years of Golf ownership! This will be my third... (2000 MK4 TDI followed by a 2013 2.0 TDI and now the 2019 GTD)

Cheers!

 

[the]

Or was being intentionally vague in order to secure a commission.

Since this is far from the first time I have heard a story like this, I'll assume this.

 

[cb1111]

Many thanks for the thoughts, I agree with your points @SRGTD.

I rang VW financial services today, on hold for 30 mins (they do warn you that call volumes are very high in fairness). Anyway, I managed to get confirmation in an email that the services will remain in place, and not be 'withdrawn' if I exercise my right to withdraw within 14 days.

I can only presume the dealer just didn't know this... Or was being intentionally vague in order to secure a comission. I couldn't possibly say which.

Now to get on with many more years of Golf ownership! This will be my third... (2000 MK4 TDI followed by a 2013 2.0 TDI and now the 2019 GTD)

Cheers!

Dealers know, but they've been trained to act stupid and ignorant. You catch them in a flat out lie and they say "I didn't know that. Thanks for pointing it out." - ten minutes later, you hear the same guy saying the same thing to another customer.