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dipper

Car finance or cash

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Been looking at cars on car guru e.c.t .Not many phone no provided so you send a Email saying you have a car as part ex.If you state you don’t require HP quite a few don’t answer.In fact if you try to contact garage it is sent to the finance company.

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True story... Early last year I was looking to change my car. I knew what I wanted and what I should pay for a 2½-3 year old example and went to view the first one that came up locally with a well known nationwide organisation. There were one or 2 cosmetic issues but they refused to sort them and also refused to drop the asking by a couple of hundred, so I bid the salesman goodbye and left. A week later the same car came up on the listing but with £400 off the previous price. I immediately rang the salesman but he didn't answer. 15 minutes later the car came up as sold.

A couple of weeks later I bought a near perfect manufacturer approved one with all the associated goodies from a main dealer. When I told the salesman the story he simply said that those supermarket type companies make their money from the bounty on finance deals rather than from the margins on selling the cars and as a cash buyer I had absolutely no leverage or negotiating power.

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We tried to pay cash for the wife's car but would of lost out on 2 free services because  they would of made nothing out of it .

 Most folk just pay there money every month hand the car back after 3 years and get another one never own a car and get shafted for scratches , kerbing on the wheels when the garage does the final hand back check 

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Saw a Peugeot 2008 for the FIL, advertised at 'cash' price of £15600 brand new. 

Rung them to ask how long to get it prepped and drive away. 

'What finance deal are you looking for?' 

No finance, cash... I said. 

'Can't do it for that, best we can do is £17000'

You what? You're advertising it at £15600 cash? It actually says cash in the ad? 

'Can only do that price on finance, with deposit and repayments + final premium, will come to just over £21000 sir, but I'll do you a pre reg with 200 miles on it for £16000'

Youre flipping crackers I told him! 

 

 

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Wife bought a new Disco sport and was paying cash. Dealership said if you take the finance we will give you £1500 off the price. This would not change if we then paid it off in full so long as she paid one finance payment. She took the finance paid one month and then cleared the loan getting £1500 off at a cost of about £30. Utter madness.

She bought hers using car wow. She had a part ex she wanted £9k for and gave a spec for the car she wanted and dealers bid for the business. It even came with a couple of free extras as it was a canceled order. 

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2 hours ago, Rewulf said:

Saw a Peugeot 2008 for the FIL, advertised at 'cash' price of £15600 brand new. 

Rung them to ask how long to get it prepped and drive away. 

'What finance deal are you looking for?' 

No finance, cash... I said. 

'Can't do it for that, best we can do is £17000'

You what? You're advertising it at £15600 cash? It actually says cash in the ad? 

'Can only do that price on finance, with deposit and repayments + final premium, will come to just over £21000 sir, but I'll do you a pre reg with 200 miles on it for £16000'

Youre flipping crackers I told him! 

 

 

I do not do finance, i had a mortgage had no option and i paid it off as quick as i could at great hardship ( 1989 16years early ) and much  annoyance of the building society.  I did in the late 70s hang around with a lad whos family ran a motorcycle shop, i wanted a Ducati 450 desmo , i wanted a cash price , even though he was a close mate he was reluctant to give me a cash price, he claimed he needed the finance so the shop got their cut. I gave up in the end and bought a used one out of Exchange and mart with 3000 miles on it.

 Sounds like its the same now.

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Posted (edited)

We couldn't get finance due to mortgage paid off in 92 and no credit cards.Apparently having no debt means they can't judge your credit rating.

Wife did mange to get her car on a PCP which she will keep by paying the ballon fee in June 2019.I just buy my cars cash, but never spent more than £7000.Ive always managed to get the screen price of below with the warranties ect.The last onei got a straight swap and £500 back when i swapped my 2013 Nissan Note for a 2006 MX5.The 5 is my hobby and project car so no more cars for me.The only ride after the 5 will be in the rear of a herse

Edited by Davyo

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12 hours ago, oowee said:

Wife bought a new Disco sport and was paying cash. Dealership said if you take the finance we will give you £1500 off the price. This would not change if we then paid it off in full so long as she paid one finance payment. She took the finance paid one month and then cleared the loan getting £1500 off at a cost of about £30. Utter madness.

She bought hers using car wow. She had a part ex she wanted £9k for and gave a spec for the car she wanted and dealers bid for the business. It even came with a couple of free extras as it was a canceled order. 

This is the way to do it. Take the finance then pay it off immediately. 

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5 hours ago, Davyo said:

We couldn't get finance due to mortgage paid off in 92 and no credit cards.Apparently having no debt means they can't judge your credit rating.

Slightly off topic - sorry - but if you're sensible about money a credit card is a good thing to have. There's quite a lot of buyer protection, particularly for on line purchases, and you keep a  credit rating.

Our mortgage was redeemed in 2011, but I've always had a credit card and use it regularly. Right now the balance is a whopping £4.67, although I will clear it in a couple of weeks.

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The last few cars I've bought have been financed using Tesco or Sainburys Loans. 3% interest on the last one which used car finance couldn't touch. Paid off over 4 years, no baloon payment to worry about, when it's paid for I trade it in for another one.

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On 24/04/2019 at 21:02, oowee said:

Wife bought a new Disco sport and was paying cash. Dealership said if you take the finance we will give you £1500 off the price. This would not change if we then paid it off in full so long as she paid one finance payment. She took the finance paid one month and then cleared the loan getting £1500 off at a cost of about £30. Utter madness.

She bought hers using car wow. She had a part ex she wanted £9k for and gave a spec for the car she wanted and dealers bid for the business. It even came with a couple of free extras as it was a canceled order. 

Why even pay one payment? Just pay it off a day or two after pick up

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If I remember correctly it was a condition of the deal. If it wasn't then I am sure she would have paid it immediately. Either way it was a a mad offer. 

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25 minutes ago, oowee said:

If I remember correctly it was a condition of the deal. If it wasn't then I am sure she would have paid it immediately. Either way it was a a mad offer. 

That does not surprise me as the dealer want their kick back, but you are within your rights to pay it as soon as you want and just be charged a daily rate while it is outstanding

A BMW dealer tried it on with my FIL and when I challenged him he was adamant you could not pay it, when I showed him the small print he was slightly red faced!

 

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Unfortunately there is no profit in the uk new car market outside finance deals. 

 

You can however take out the finance then change your mind and buy out if I understand it rightly so long as you do it within 48hours. 

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The smart things to do are:

1) Never, ever buy a new car - no matter how sweet the deal from the dealer.  The moment you drive it out of the showroom you will lose the following instantly:

a) The VAT

b) The delivery charge and 1st registration fee

c) Most of the value of the options.

d) All the bolt-ons they try to sell you - GAP insurance/paint protection and other profit margin generators.

2) So buy a used car with low mileage and in the colour with the options you want.  Be prepared to travel for the right vehicle.  To give an ideal of savings I bought an Audi RSQ3 in 2016, 9 months old/3000 miles on the clock - it had lost £17,500 of it's purchase price.  And then last year a 10 month old Audi RS4 with almost every option (factory Press car), 6,000 miles on the clock...it had lost more that £25,000 - crazy isn't it?  Who can afford to lose that kind of money?

3) Finance - Do NOT consider for a moment any of the Personal Contract Plans (PCP) as you are not on the road to outright ownership but rather to that of having your leg lifted with a hefty final payment or give the car back - nett result you own nothing after 3 or 4 years of outlay and probably an initial deposit too.  If you are very crafty you will organise a low interest bank loan with a view to outright ownership but take the finance offer and often considerable incentives from the dealer to get the price you want to pay.  Once in possession of the car you will be in your legal right to cancel the finance deal direct with the finance house and use your cheap bank loan to purchase the car outright.

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These finance deals do not make much sense. Just brought a new Ford Fiesta and we had exactly the same, several garages said they could give us extra £1000 of if we had 0% finance of just £2500. We can pay off if we would like but may as well just pay over two years. Just does not make any sense how they make a profit on this as there are no charges for the loan

 

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The money is not in the metal any more, its in the finance.

Take the deal, settle the loan within the period allowed making no monthlies, its win win.

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2 hours ago, Stimo22 said:

These finance deals do not make much sense. Just brought a new Ford Fiesta and we had exactly the same, several garages said they could give us extra £1000 of if we had 0% finance of just £2500. We can pay off if we would like but may as well just pay over two years. Just does not make any sense how they make a profit on this as there are no charges for the loan

 

0% is not quite what it seems.
In general, the item is pre loaded with extra profit, so it appears you arent paying any extra for the loan, you are, by paying an inflated price to start with, the credit company then gives, for example 80% of the total back to the trader, and often a credit broker fee too.

It works the same way on these 'minimum part exchange' deals , some are even falsely calling it 'scrappage'
Bring your old £100 banger in and well give you £1500 ect.
The only way this can possibly work is if the car has been pre loaded with extra profit of at least £1500. This , on top of dealer profit.
That £10,000 car is in reality worth £7k.

I once knew someone who walked into SCS and bought £2500 worth of sofa for cash, it was on 5 years 0 % finance !
Maybe would have been bought for £1500 if they had negotiated 😂

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3 hours ago, Stimo22 said:

These finance deals do not make much sense.

There's no such thing as a free lunch. One way or another the customer is paying.

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1 hour ago, Westward said:

There's no such thing as a free lunch. One way or another the customer is paying.

Exactly, or do people really think companies lend out money for nothing ?😂

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13 hours ago, RSQ3John said:

The smart things to do are:

1) Never, ever buy a new car - no matter how sweet the deal from the dealer.  The moment you drive it out of the showroom you will lose the following instantly:

a) The VAT

b) The delivery charge and 1st registration fee

c) Most of the value of the options.

d) All the bolt-ons they try to sell you - GAP insurance/paint protection and other profit margin generators.

2) So buy a used car with low mileage and in the colour with the options you want.  Be prepared to travel for the right vehicle.  To give an ideal of savings I bought an Audi RSQ3 in 2016, 9 months old/3000 miles on the clock - it had lost £17,500 of it's purchase price.  And then last year a 10 month old Audi RS4 with almost every option (factory Press car), 6,000 miles on the clock...it had lost more that £25,000 - crazy isn't it?  Who can afford to lose that kind of money?

3) Finance - Do NOT consider for a moment any of the Personal Contract Plans (PCP) as you are not on the road to outright ownership but rather to that of having your leg lifted with a hefty final payment or give the car back - nett result you own nothing after 3 or 4 years of outlay and probably an initial deposit too.  If you are very crafty you will organise a low interest bank loan with a view to outright ownership but take the finance offer and often considerable incentives from the dealer to get the price you want to pay.  Once in possession of the car you will be in your legal right to cancel the finance deal direct with the finance house and use your cheap bank loan to purchase the car outright.

While I would not disagree with most of what you are saying I find your comment regarding PCP odd, admittedly it does not suit everyone but if you like to change every 3 years why would go straight HP if you are chopping in for a new one and have 

A) the higher monthly cost

B) the option to have a better car from your budget

 

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1 hour ago, button said:

While I would not disagree with most of what you are saying I find your comment regarding PCP odd, admittedly it does not suit everyone but if you like to change every 3 years why would go straight HP if you are chopping in for a new one and have 

A) the higher monthly cost

B) the option to have a better car from your budget

 

At least with HP you are actually paying for the eventual ownership of the car, with PCP you are just hiring.
The only way it works for some , is if you run it through a business with a tax offset.

The idea of having a new car every 2,3 or 4 years is attractive, lots of people are getting in to it, but work out what youre actually spending over those years, without a hand back fee for damage ect, and you could buy something that still has value at the end.

Buying a brand new car is a ridiculous idea, factor in depreciation , and you are literally throwing money away, and the more you spend the more you lose.
My friend buys a new RR Sport every year,  (because he can) then part exes it back, with less than 10,000 on the clock, it costs him £30 k a year ! Utterly stupid !

Buy one from a car supermarket 1 or 2 years old , still warranted, and most of its heavy depreciation already gone.
Depending on what it is , mileage ect, they can be half the cost of a new one.
For a high value one , stick it on your mortgage for low interest and spread payments.

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If you look at total amount payable between HP and PCP there is little difference except you have less in the car, damage charges only kick in if you handed back rather trade in, appreciate you think buying new is silly but each to there own, if everyone thought the same there wouldn't be any second hand bargains!

Paying with your mortgage good in theory, many would not have the discipline and end up paying more in the long run

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10 minutes ago, button said:

if everyone thought the same there wouldn't be any second hand bargains!

The main reason there is , is because of the amount of PCP and company car purchases of new cars going into the pipeline.
New car SALES are going down, year on year, and dealerships are having to buy their own cars and sell them as pre reg , just to keep the franchises.

A huge proportion of my work is putting damage right on PCP cars before they go back, the amounts charged for very minor damage by the lease companies are excessive, and are a big part of the money making side of PCP.

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