Buying on Finance

[kdsaunders]

So I've seen a couple of mentions on other threads about this but was just hoping for some clarity. Heading to a dealer at the weekend to buy a caravan. We are in a very fortunate position where we could, if we wished, pay cash; however I have noted comments on some threads that finance companies might be a better option and paying the deposit on credit card? Could we then just pay off the finance agreement say after a couple of months? Would there be any penalties for doing so? Would we continue to get the protection that buying through finance companies provides after we pay it off? All seems a bit of a minefield to me so any advice is appreciated.

Kind regards

 

[Dustydog]

So I've seen a couple of mentions on other threads about this but was just hoping for some clarity. Heading to a dealer at the weekend to buy a caravan. We are in a very fortunate position where we could, if we wished, pay cash; however I have noted comments on some threads that finance companies might be a better option and paying the deposit on credit card? Could we then just pay off the finance agreement say after a couple of months? Would there be any penalties for doing so? Would we continue to get the protection that buying through finance companies provides after we pay it off? All seems a bit of a minefield to me so any advice is appreciated.

Kind regards

Definitely pay part with your CC.

You don’t quote the value of your intended purchase?

In order to enjoy Section 75 protection of the Consumer Credit Act in the UK, your single purchase must cost more than £100 but not more than £30,000. All or part of the purchase must be made with your CC.
This means that even if you paid a deposit of £100 or less with your credit card, the entire purchase is protected if the total price falls within the £100 to £30,000 range.

Buying on a Finance loan you must study the small print . Some contain an early payment penalty clause which may cost more than you expected.
Your last point about continuing protection if the loan is paid off earlier needs a bit more checking. I see it will be the same as your CC. After all we do settle our CC each month!

Buckman on here will know😁

 

[Sam Vimes]

Clearing finance early has always been a concern of mine in respect of trying to get help with any potential claims on goods.

It seems to me that once the finance has been cleared then title of the goods is no longer with the finance company but yours.

Then again I've never been in the situation that's required any claim.

 

[ProfJohnL]

There are some advantages to use finance to buy caravans. The saddest reason is that UK caravans reliability record for all makes, is abysmal and having the support of a finance company to use their clout to get problems fixed can be much more effective than trying to get the job done as a fully paid up owner.

By using finance, you get additional legal protections, becasue the finance house effectively becomes your seller of the goods, and as such they have a legally vested interest in ensuring the goods retain as much value which is their collateral against you defaulting on the loan.

What I don't know is if the finances companies interest remain the same if you foreshorten the loan period. They may revert to just the legal requirements of the Consumer Rights Act, but even then it can be e better bet than a caravan dealer.

 

[Dustydog]

There are some advantages to use finance to buy caravans. The saddest reason is that UK caravans reliability record for all makes, is abysmal and having the support of a finance company to use their clout to get problems fixed can be much more effective than trying to get the job done as a fully paid up owner.

By using finance, you get additional legal protections, becasue the finance house effectively becomes your seller of the goods, and as such they have a legally vested interest in ensuring the goods retain as much value which is their collateral against you defaulting on the loan.

What I don't know is if the finances companies interest remain the same if you foreshorten the loan period. They may revert to just the legal requirements of the Consumer Rights Act, but even then it can be e better bet than a caravan dealer.

You say the same as me😎
Whilst I’m not 100% sure I don’t see why a CC should be any different to a finance loan.

Come on Buckman sort it for,us🤪

 

[RogerL]

You say the same as me😎
Whilst I’m not 100% sure I don’t see why a CC should be any different to a finance loan.

Come on Buckman sort it for,us🤪

The customer has more clout with the finance house / credit card company while there's a debt that's being repaid.

 

[otherclive]

Definitely pay part with your CC.

You don’t quote the value of your intended purchase?

In order to enjoy Section 75 protection of the Consumer Credit Act in the UK, your single purchase must cost more than £100 but not more than £30,000. All or part of the purchase must be made with your CC.
This means that even if you paid a deposit of £100 or less with your credit card, the entire purchase is protected if the total price falls within the £100 to £30,000 range.

Buying on a Finance loan you must study the small print . Some contain an early payment penalty clause which may cost more than you expected.
Your last point about continuing protection if the loan is paid off earlier needs a bit more checking. I see it will be the same as your CC. After all we do settle our CC each month!

Buckman on here will know😁

Should be £100 or more in the credit card not “less”.

 

[Dustydog]

Should be £100 or more in the credit card not “less”.

I disagree Clive. The amount paid by CC can be less than £100.
As I said the value of the goods must be greater than £100 but less than £30k

This piece from Money Maker will help

Section 75 protection if you pay a deposit by credit card​

You don’t need to pay the full price by credit card to get section 75 protection. It’s enough to just pay the deposit to get the legal protection.
For example, if you bought something costing £200 but paid a deposit of £20 on your credit card and the rest by other means (eg using a debit card or cash), you would still be covered and you would be able to claim the whole £200 (and not just the deposit) from your credit card company if the goods didn’t arrive or were faulty.
You can also make a claim for more than just the price of the items. For example, if you could claim from the supplier for additional expenses (such as postage) or consequential losses (such as damage caused by a faulty item), then you can also make a section 75 claim for these with your credit card company.

 

[otherclive]

I disagree Clive. The amount paid by CC can be less than £100.
As I said the value of the goods must be greater than £100 but less than £30k

This piece from Money Maker will help

Section 75 protection if you pay a deposit by credit card​

You don’t need to pay the full price by credit card to get section 75 protection. It’s enough to just pay the deposit to get the legal protection.
For example, if you bought something costing £200 but paid a deposit of £20 on your credit card and the rest by other means (eg using a debit card or cash), you would still be covered and you would be able to claim the whole £200 (and not just the deposit) from your credit card company if the goods didn’t arrive or were faulty.
You can also make a claim for more than just the price of the items. For example, if you could claim from the supplier for additional expenses (such as postage) or consequential losses (such as damage caused by a faulty item), then you can also make a section 75 claim for these with your credit card company.

Thank you I hadn’t appreciated that subtlety.

 

[kdsaunders]

Thanks all. Got a little longer to sort my head out now as won't be making the purchase this weekend... I don't think.

 

[Buckman]

Use the CC to pay a small deposit. Use finance for long term protection. Even if you. pay off the loan after 3 months, the finance house is still responsible for the goods as they are the supplier and not the dealership. We always had finance for at least 3 years on a brand new caravan. In my experience it is lot easier to deal with the finance company than the CC company.