FOrd less than 0% finance too good to be true?

andyfuk

I am in the market for a new car, so have started looking, nothing else.

I went to Ford and enquired about finance, purely out of interest and went through a typical sale example.

They have told me about a less than 0% finance, which I find too good to be true.

I'd like some opinions, and hopefully maybe some people can shed some experience?

Here's how it was put to me (twice- on two different days).

The loan is for £7K and lasts 5 years.

1) The first year I pay £90 a month, but they pay me back £180 per month. Yes, this does mean I am £90 a month better off. And no I still don't get it either
2) The remaining 4 years I pay them £180 per month. They don't pay me anything.

Now, I have the option of paying off the finance after the first year. This means I have paid £1080 off the loan and I have £1080 in the bank.

Unless I have got this wrong, the remaining finance is circa £6000, and with the money they have "given" me, I only effectively have to shell out circa £5000 of my own money to pay the car off.

There are apparently no early repayment charges.

Too good to be true? Tell me about it.

Ok, some more details:

As I was only enquiring, I don't have a key fact sheet. I don't know if they are obliged to give one for this type of loan, I know they would if it was a mortgage. I am certainly going to ask for one if I make a purchase as I want everything spelt out in black and white.

I believe the underwriter is Santander.

Can anyone comment? It would be much appreciated!

Andy

Fonz_2

Is the total loan for £7,000 exactly? I make total repayments based on that model to be £7,560.

halifax71

Still £560 interest isn't bad - that said it is not 0% and if they are actually advertising it as such then they are on dodgy ground.

I reckon it's about 3% APR (without calculating properly)

andyfuk

Hi Fonz, Halifax71

Thanks for the responses.

To quote the quote more accurately (mine were approximations, apologies)

The loan amount is 6994.24

The monthly payment for 12 months is £90.00

The remainder of the term is 48 months at £174.86

I believe that they would pay the £174.86 into my account for the first 12 months.

Thanks

Andy

Fonz_2

So about £380 interest over the term (£6.35 a month) which actually seems a very good deal in the current climate.

andyfuk

Hi Fonz, thanks for the time and the reply! It seems a rather tempting offer. Depends if there is a setup and cancellation or termination fee however.... will delve deeper when the time comes. Otherwise it is tempting to put the money I do have in a high interest account or bond, if I can find one, and let it earn interest over the loan period, hopefully more than than that will be charged.

blue_monkey_2

Might also be worth looking around at other dealerships to see what they are offering also. Could they have put the screen price of the car up, or held it so while it might not seem like you are paying interest you actually are?

We just got 2.5k off a 14.5k car which was not advertised at the dealer but on the manufacturer website so we went in and asked for it that that price. Have you checked that the car is not available elsewhere for much less - it might work out that you will be paying less with a lower price and interest. It is just a thought really.

ladygogs

I was just wondering if it is extremely difficult to get 0% finance for a car?...
18 months ago i got finance through First Response, with an excruciatingly high APR I have paid on time every time for this period... where do you think I would stand trying to get a 0% deal... i really need to change my car, family has grown :0

wsaunders23

I always find if something sounds to good to be true it usually is