Paying PCP with bank loan

[ChrisR]

Has anyone ever paid off their PCP deal early with a bank loan so you'd effectively be paying the full settlement figure on the car and splitting that into X months so that there is no balloon payment? If basically be changing from PCP to a bank loan with the same monthly cost but with a longer period to pay it back.

I am considering doing this as I am not sure that I'll actually want to change my car at the end of my deal and I also don't want to be forced into changing or taking a higher interest loan to pay the balloon payment off so in the long term it will save money.

If I was to do this then decide to trade in the car, will the dealer still pay off the loan in the same way they would any remaining finance or will they not do this as the loan isn't secured against the car?

Any thoughts?

 

[gpaevo]

If it is a personal loan then I would find it highly unlikely that a dealer would take on the debt.

 

[KevM]

Yes, it's really simple. Request a settlement figure, get your loan in place, ring finance company with your debit card and pay the balance.

When you are ready to change, the value of your car is yours to do with what you like. If you need a cheque back to get the loan settled, the dealer will sort it, no bother!

 

[VEN©M]

If it is a personal loan then I would find it highly unlikely that a dealer would take on the debt.

You missed the point. He is talking about securing a loan through his own bank, then using the secured funds to pay the finance company off. The finance company assume no debt, they just get paid. There's nothing wrong with it at all.

As long as you're happy with the terms of the loan from your bank.

 

[gpaevo]

You missed the point. He is talking about securing a loan through his own bank, then using the secured funds to pay the finance company off. The finance company assume no debt, they just get paid.

I was referring to this statement.

If I was to do this then decide to trade in the car, will the dealer still pay off the loan in the same way they would any remaining finance or will they not do this as the loan isn't secured against the car?

 

[RoniN]

The dealer will only pay off finance secured against the car. It's in their own interest to do so.
They will not pay off a bank loan.

Cheers

 

[ChrisR]

The dealer will only pay off finance secured against the car. It's in their own interest to do so.
They will not pay off a bank loan.

Cheers

Ok so that was what I expected which is why I asked before making that move! May be better to wait until the time is up and then decide if I want to keep it or not.

 

[chris_b]

Running full term on a PCP Isn't that common. Most people change if they have equity or hand the car back half way through if they don't.
If you are considering keeping refinancing with a low or better yet 0% Apr loan will almost certainly leave you better off plus the car will no longer hold any interest with any finance company meaning it's your to do with as you please.

 

[gary87]

The dealer will only pay off finance secured against the car. It's in their own interest to do so.
They will not pay off a bank loan.

Cheers

I've had customers who have had a personal loan on their car and we have settled it for them; it's not really any different to settling finance from an alternative finance house.

 

[KevM]

The dealer will only pay off finance secured against the car. It's in their own interest to do so.
They will not pay off a bank loan.

Cheers

Incorrect

Cheers

 

[RoniN]

Incorrect

Cheers

What dealer do you work in then??

Cheers

 

[mmc01]

The dealer will only pay off finance secured against the car. It's in their own interest to do so.
They will not pay off a bank loan.

Cheers

Why would they not? No different than handing the customer a cheque for buying a car?
In fact if anything it's less risky than dealing with a finance company.

 

[RoniN]

A customer trading in a car with outstanding finance and then taking another car from the dealer.
The dealer will clear the outstanding finance on the trade-in so they are able to resell it on the forecourt.

If the customer took out a bank loan to purchase a car or clear the outstanding finance owed and then they trade it into a dealer for another car.
The trade-in has no outstanding finance owing and won't show on a hpi report so the dealer is free to resell it on the forecourt.

The bank loan it secured against the person not the car.
Perhaps where @KevM works may clear it to secure the business from the customer but I know a few dealers who will only clear finance secured on the trade-in.

Cheers

 

[KevM]

That's just stupid cheers.

Say a guy wants to trade a £10k car in that he owes the bank/CU £7k for. No dealer in the country would question giving him a cheque and taking his £3k equity into the new deal. His car, his equity, his right to choose!

To have to think twice about doing so, is just business suicide!

 

[RoniN]

That's just stupid cheers.

Say a guy wants to trade a £10k car in that he owes the bank/CU £7k for. No dealer in the country would question giving him a cheque and taking his £3k equity into the new deal. His car, his equity, his right to choose!

To have to think twice about doing so, is just business suicide!

We are on different pages here !!!

The OP asked "If I was to do this then decide to trade in the car, will the dealer still pay off the loan in the same way they would any remaining finance or will they not do this as the loan isn't secured against the car?"

My answer was correct the dealer will not pay off the loan the same as they would outstanding finance. The dealer will not send a cheque or transfer money to the bank to pay off the loan as they would the finance company.
If the dealer gives the customer a cheque its up to the customer to clear their loan with the bank.
I never mentioned equity in the deal as I have no way knowing if the OP will have positive or negative equity in any future deal.

Cheers

 

[chris_b]

Must say I'm pretty surprised and some of the responses on this. I'm with @RoniN and agree that very very few if any dealers are going to clear a 'personal loan'
A 'personal loan' has nothing whatsoever to do with any car.
Sure when arranging it you might have said I want it to buy a car but the debt is not attached to the vehicle, it's attached to you personally.
If you'd 20k left on your mortgage and threw that into the mix would a dealer clear it for you?
Finance is a product and one that dealers can make a lot of money from so they might happily sell you another loan enabling you to clear off an existing one and enabling a car purchase from them but they are NOT clearing a loan the same way when a car is on any form of HP.
They are two totally different things.

 

[ChrisR]

Ok so we have probably got to the conclusion of

Dealer will not pay the loan off BUT will give you a cheque to pay it yourself?

 

[Coog]

You could take out a loan and clear the finance, sell the car and do whatever you want with the proceeds. No-one cares.

 

[Dan.86]

Ok so we have probably got to the conclusion of

Dealer will not pay the loan off BUT will give you a cheque to pay it yourself?

Precisely.

 

[KevM]

the dealer will not pay off the loan the same as they would outstanding finance. The dealer will not send a cheque or transfer money to the bank to pay off the loan as they would the finance company.

Of course they would! All you have to do is ask them to!

Must say I'm pretty surprised and some of the responses on this. I'm with @RoniN and agree that very very few if any dealers are going to clear a 'personal loan'
A 'personal loan' has nothing whatsoever to do with any car.
Sure when arranging it you might have said I want it to buy a car but the debt is not attached to the vehicle, it's attached to you personally.
If you'd 20k left on your mortgage and threw that into the mix would a dealer clear it for you?
Finance is a product and one that dealers can make a lot of money from so they might happily sell you another loan enabling you to clear off an existing one and enabling a car purchase from them but they are NOT clearing a loan the same way when a car is on any form of HP.
They are two totally different things.

A loan is a loan, if it needs cleared to put someone in a position to be able to buy another car, then its only a click of a button for an accounts dept.

Customer service and Going the Extra mile and all that.... Couldnt be simpler!

 

[VEN©M]

I was referring to this statement.

If I was to do this then decide to trade in the car, will the dealer still pay off the loan in the same way they would any remaining finance or will they not do this as the loan isn't secured against the car?

Looks like i missed the point.