Sounds a bit odd for a garage to pay off the finance on your existing car, before they have even taken it in for part exchange and have not got any finance agreement in place for the new purchase.

As your financial circumstances have changed, you would of course have to advise the finance company (broker) involved and they may decline the finance. I presume the VW dealer is acting as finance broker and therefore under OFT/FSA rules they cannot make you sign up to an unaffordable finance agreement. On this basis, if the finance is no longer available, you can walk away from buying the car and may even be entitled to your deposit back. It would be up to the garage to stop the cheque they have sent to the existing finance company involved or arrange to get their money back.

That is what I understand the situation to be, but you may wish to check with Trading Standards. Consumer Direct are the helpline for the OFT and Trading Standards. http://www.direct.gov.uk/en/Governmentcitizensandrights/Consumerrights/index.htm

Hi,

I recently placed an order with a VW dealer for a car (nearly new) that wasn't onsite. I left a deposit with the garage, all ok.

Unfortunately since then my wife has been put on notice of redundancy, and so it seems as were are unsure of our financial future, it isn't sensible for me to enter into a contract for a new car.

I haven't signed any finance documentation yet, and was using my exisiting car in part exchange which has a small amount outstanding on an existing credit agreement. I had a settlement amount sent through to the dealer at the end of last week. I Then spoke with the dealer this morning to say that as things have changed i will not be able to continue with the purchase of the car. He then told me that things are quite messy, as they have sent a cheque in advance to my finance company to settle the outstanding amount on my current car. I mentioned that this was a little presumptious of them in the light of the fact that i hadn't signed the finance contract. I guess my question is where do i stand in all of this. I can see they may have a case for not returning my deposit (not ideal), but is their anything else they can persue me for?

Any help/advice greatly appreciated.

Thanks
Chris