Ford Options Cash Plan Loophole

Superhans_2

Hello all, not sure if I should be posting here or under the motoring section.

I've just put down a £200 deposit on a Ford Focus (second hand 2010 plate) from a Polar Ford dealer with the balance to pay on Saturday when I go to collect the car.

Now, I've already got a great price because I am a cash buyer but last night, that particular Ford Franchised dealer finance manager called me last night to say that I could save another £300 if I took advantage of a loophole in their Ford Options Cash Plan.

Basically, the gist is something like this:

I pay £2k less than the agreed price when I go to pick up the car on Saturday with the remaining 2k funded through the ford options cash plan that I have to settle within 12 months. Apparently, if I settle after 7 days, the settlement figure will be £1700 approx thus giving me my £300 additional saving. This is because the local ford franchised dealer pays the interest that would accumulate over the year in advance and also (I think) puts through the value of the car slightly less than what was agreed??

I dont fully understand it but basically, local franchised dealers have a target to hit which is based on a percentage of the number of finance agreements they sign people up for. If they hit the target they get a bonus.

So basically, they are using this loophole to hit their bonus. They are taking an up front hit by taking care of the interest etc but collectively, if they do enough of these, their bonus when they hit target is greater than this.

The man said they do a couple of hundred of these a year and that it can only be done with customers paying cash.

I sort of get what he is saying (although ultimately they are screwing over Ford) but Im reluctant to sign up for any finance agreement when I dont have to. He absolutely assured me that I would not pay one penny interest and even if I settled after 12 months, although I wouldnt get my £300 saving, I would still only pay the original agreed price if I were to settle in full when I pick the car up on Saturday.

Has anyone else heard of this or even done it? Is it legit, did anyone make the additional saving or did they get misled into something that ended up costing more money?

Thanks in advance

chalkie99

There is a thread from last year which might help a bit -

https://forums.moneysavingexpert.com/discussion/2325569

the_bandit

I had something similar a few years ago when buying a car for my Wife.

I can see the logic behind the dealers thinking but I don't like the sound of it. All of these commissions have to paid for at the end of the day at that means higher priced cars for you an me.

He is already making money on the deal as is stands so why take on a credit agreement you don't want which you have the risk of settling. A entry on your credit file too. For what, £300! He stands to make much more you can be sure from this additional deal.

Pay cash, buy car, drive away.

Blue_like_a_Berry

I was in my local ford today looking at a fiesta. My salesman told me it was a government incentive for trade-ins over 7years old so they don't receive any commission for it. He said not a lot of people understand it so they don't take it up. I could pay it after three months until (?) 36 months and after 35 months they would write a letter.

The interest rate is lower than the £500 hence the saving (he quoted me £227.50 but I think my cash installment was different) Apologies for the estimates, the quote they gave me is still in the car but I wanted to reply.

HTH