Car finance or pay in cash?

earlofbarrett

I don’t know if it’s the sceptic in me but is there something in favour of the car dealership if I buy a new car on 0% finance as opposed to paying in full?

I am part exchanging my old Toyota Avensis for a brand new one and wasn’t interested in their 3.9% p.a car finance stating I’ll pay the balance in cash, but I now have the main dealer coming back to me and bending over backwards to offer me 0% over 2 years!! I find this a little suspicious and wondered if there was some sort of detriment to my warranty or parts on finance as opposed to paying up front?

Cheers in advance

karenx

I think the sales advisor will be getting comission on the finance agreements so will be hoping you take it out. They get comission on a car sale and extra if its a financed one. So he will be wanting to make as much money as possible out of you.
If you can afford to pay for a car outright I would do it, that way you have no worries every month. My car is paid outright, bought it when it was 3 years old. And insurance is paid once a year also on a motortrade policy, so its great knowing there is much less things to pay out every month!

ahillsy

On a 0% finance deal, I don't think there is anything in it for them - after all, they don't get any more money out of you!

For me, I would always go with the 0% deal for the full period if available, regardless of whether I had the money ready or not at the time of purchase - then just leave the money sitting in a "high" interest account to make you a bit of money.

There would be no impact on warranty etc if you went with the 0% deal or not.

Kilty_2

0% providing there's no hidden admin charges or other nasties

Also gives you the ability to hand the car back after a year voiding the agreement (usually) should you need to... Not great on a year old car but you never know.

Plus there's the added consumer rights that finance agreements bring (again, probably not needed on a brand new car, but who knows...)

Hintza

If it is not a manufacturer backed 0% deal then you are (probably) getting shafted somewhere. Try the online brokers.

What car is it?

motorguy

Hintza wrote: »

If it is not a manufacturer backed 0% deal then you are (probably) getting shafted somewhere. Try the online brokers.

What car is it?

From the original post, its a Toyota Avensis.

motorguy

ahillsy wrote: »

On a 0% finance deal, I don't think there is anything in it for them - after all, they don't get any more money out of you!

For me, I would always go with the 0% deal for the full period if available, regardless of whether I had the money ready or not at the time of purchase - then just leave the money sitting in a "high" interest account to make you a bit of money.

There would be no impact on warranty etc if you went with the 0% deal or not.

The salesman will get a signing fee of maybe £150 - £200, so thats why he'll be pushing it.