Financing a nearly new VW car

jenny-wren

We've agreed to buy a nearly new VW from the main dealer.

We need to finance about £10,500 of the cost and have two options:
1. Use our savings to pay for the car outright and then put £300 every month into some sort of saving account for 3 years; or
2. Take a finance deal with the dealer (which could cost us up to £1800 in interest payments, we're waiting for figures from the dealer). The VW finance includes 3 years basic servicing costs (which I believe would cost us £250 to buy)

Can anyone advise what my best option would be? I like the idea of taking a finance deal because it leaves our cash available should we need it but hate the idea of the finance company being quids in compared to us possibly pocketing a reasonable amount of interest. I've been bamboozled by APRs and a pushy finance guy!

Given the current parliamentary situation would we be better to go for a fixed rate finance deal throught the dealer or hope that interest rates will rocket and interest on our savings would more than outweigh any benefits of taking a finance deal? AAaaagh!!!

Any comments or thoughts welcomed.

Drbob08

The way I see it: If you can afford comfortably to pay for it outright and have the discipline to pay £300 a month into a savings account for the three years. Then it sounds like the better option, save yourself £1,800 and even with a really poor interest rate on your savings account, at least your still saving £1,800. And you've always got the opportunity to shop around for the best savings deal available!

However, on the flip side, if it's going to be a struggle financially, then perhaps you should go for the finance - after all £1.8k in finance interst might be better to enable you to have the money available for a rainy day.

Whatever you do, enjoy the car! :beer:

hethmar

I know VW finance is very good compared with any other loans.

Inactive

Pay for the car with your savings, don't throw money away in interest to VW Finance.

nullogik

You're going to have to pay for it eventually, so if you've got the funds do it now. The car then is all yours and you don't have an additional worry at the end of the month on top of the mortgage/credit card/other utility bills etc.

molerat

Pay them cash with your savings and haggle hard on the price. Tell them you want the free servicing as well. I hate giving money to finance companies (and car dealers).

Removing the money from savings is going to cost you a max of £1000 in lost interest if you don't put it back. Every payment back in is reducing that deficit.

jenny-wren

OK, it's decided, we'll use our savings. We've already agreed the price for the car (it's a good deal), so now we have to negotiate what extras we can get to save them having to fill in finance forms. Hmm, tank of fuel, free servicing, a year's road tax?! After all, they're going to have a nice wad of cash in their account!!

Thanks for all your help.

Kilty_2

jenny-wren wrote: »

OK, it's decided, we'll use our savings. We've already agreed the price for the car (it's a good deal), so now we have to negotiate what extras we can get to save them having to fill in finance forms. Hmm, tank of fuel, free servicing, a year's road tax?! After all, they're going to have a nice wad of cash in their account!!

Thanks for all your help.

Can be hard because they get commission for finance - but some of the things you mentioned are standard negotiating points anyway.

movingforward2010

i remember buying a car for cash years back and the dealer looked so disappointed when i told him i didnt need the finance

Hintza

Pay them cash but come on OP make it interesting and we can all see if we can find you a new car for the same money.

What is the car and the spec etc?

jenny-wren

Well, he's not budging an inch. Car is already taxed, no extras in the deal it appears.

Any tips on how to get a few thrown in even though we've agreed a price for the car?

The problem is that the car new would take up to 4 months to get so they can easily sell the car to someone else. It looks a fair deal to me.

Hintza wrote: »

Pay them cash but come on OP make it interesting and we can all see if we can find you a new car for the same money.

What is the car and the spec etc?

Golf 1.4 TSI SE 5dr .... < 6months old, 3000 miles .... how much?