How does Skoda Finance work and can I end the loan early to save money?

I am buying a new Skoda Octavia for £19,000. The dealer suggests that I fund £9500 using Skoda Finance. The deal is that Skoda will contribute £500 and give me three free services up to 30,000 miles, so I am saving the best part of £1000. The dealer tells me that I can pay off the loan as soon as I wish and would only be charged for the interest accrued. So if I settle the day after the loan I would pay a few pounds and have saved almost £1000. This seems too good to be true, which suspicion suggests it probably is. Is there a catch?

Asked on 24 August 2013 by RR, Whitwick

Answered by Honest John

One of the reasons why I never comment on finance is that I simply don't understand 'something for nothing' offers like this. Someone, somewhere is making money out of it. There is no such thing as a free lunch. Never has been. Never will be. One way or another you pay for everything in the end.

Tags: buying a new car finance

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