Car PCP Finance Early Repayment

[TheyCannotBeNamed]

About 10wks ago I bought a used car on PCP from a local dealership. I’ve now received a small inheritance which could just about pay the car off and save me the interest. Is anyone aware of any industry standard (or dealer specific) timeframe for commission clawback? I’m not comfortable asking the salesperson incase it’s months away, but wouldn’t want her to lose her commission for the sake of a few weeks. If it were clawed back would she know it was my sale?

Contact the loan company and ask for a settlement amount.

Thank you. I’m able to get a settlement amount online and it will save me a lot in interest if I pay it off. I just wondered if the salesperson will lose their commission and if there’s a time after which it’s “safe” and they don’t have to pay it back. It’s a no brainer for me to settle, but if waiting a few weeks means she gets to keep her commission too I would be ok with that.

I don’t think it works like that as they get commission once the first payment is taken out of your account. After that the agreement has nothing to do with the salesperson.

Oh really? That’s brilliant. I had a little google and found references to 30, 60, 90 & 120 days, but all seemed to be guesstimated. If you’re right that’s perfect

Don't worry about the sales commission. They don't worry about what add ons cost you.

True. Thank you. I’m probably overthinking it and should just save myself some money 😂

I can answer this, it's 6 months unfortunately for early settlements. I work at a motor trader. I'm not 100% certain but we use Motonovo, DSG, Black Horse and Car Finance 247 and for us with these companies it is. Having said that we are a small independent family run garage. The big guys may have more favourable deals they have negotiated with the finance companies, so for example it may be a clawback on a sliding scale of percentages over several months rather than a single cut off point. Claw backs are disappointing as there's no way to budget for them and no warning and they hit your bottom line months later unexpectedly. But they are part of being a motor dealer. I don't know of any dealers that would take the comms back off a sales person though. If you cancelled before the end of the following month I suppose it's a possibility as they may not have been paid the commission yet so it could count as 'cancelled' but after that it shouldn't affect the sales person.

you may not know this but if a customer voluntarily terminates or defaults (doesn't pay) at ANY time during the period of the finance they claw back 100% of the finance commission, or they do from us little fish anyway. We had one month recently where £3000 was taken from us and it was for 2 deals, one in early 2022 and one early 2023. That stings as a business owner.

And I actually think it's nice you thought about the sales person, and also heartening to hear there's other dealers trying to do a good job and treat customers fairly. The motor trade has a bad rep and I think it's mostly justified. That's why me and DH decided to give it a go with our experience, we knew it shouldn't be like that.

Sorry my answer wasn't clear, yes they WILL definitely claw back the commission from the dealer but I don't think the dealer will take the commission back from the sales person after 10 weeks.

Thank you so much for all of your answers. I was really hoping I’d get some answers from people in the trade. I bought from one of the big dealerships, so as you say they may have preferential agreements, or be in a better position to absorb any clawback without the sales commission being impacted. It sounds like an incredibly challenging industry, especially if you can be hit by clawbacks so many years later. Especially when people are feeling the pinch so much so defaults are more likely. Kudos to you for setting up a business.