Save with "Minimum Part Exchange" trick

steve-L

This seems to be an 'advanced' technique....
(like stoozing on credit cards)....

I can see where this can work but it means you need to understand your rights to cancel the finance deal and make sure you do everything by the book.

Perhaps the summary would be better, if I understand it then...
1) Find a dealer that is using a normal trade price on the cars they seel but a minimum PX 'deal' and is instead using inflated loans not sticker prices to make up the difference.
(I guess this is something done differently by different dealers.

2) Go thorough the process and then invoke your right to cancel

But it still seems most people with a 'banger' will then be buying a car outside their comfort zone?

used_car_manager

This seems to be an 'advanced' technique....
(like stoozing on credit cards)....

correct, maybe i should ave worded it better, thanks for that

I can see where this can work but it means you need to understand your rights to cancel the finance deal and make sure you do everything by the book.

correct again and car finance is like most loans, it has no early settle penalties and the key thing is to settle before the 1st payment so you dont pay the doc fee. When you ring santander or black horse etc you dont say i want to cancel you ask for a settlement figure as you want to settle off

Perhaps the summary would be better, if I understand it then...
1) Find a dealer that is using a normal trade price on the cars they sell but a minimum PX 'deal' and is instead using inflated loans not sticker prices to make up the difference.
(I guess this is something done differently by different dealers.

and again correct... the money needed to give the customers is made up from an inflated rate

2) Go thorough the process and then invoke your right to cancel

yes, as i said its not so much that you need to go through lots of red tape to "cancel"... you are just settling off as you would with any loan or credit card

But it still seems most people with a 'banger' will then be buying a car outside their comfort zone?

true, its because they fear the dealer and the word car finance and think they are going to get trapped with no escape route... if you think about it car finance is provided by high street banks, but from a different dept, ie santander, barclays, black horse etc all do dealer finance, so they cant be nicey nicey on the high street and con people with car finance, you have a lot of right due to the consumer credit act as the loans are regulated.

the trick is to spot a min px deal thats not put on the screen price, well if they allow it on cash deals the screen price will be jacked up, if its only on 4-5 year fiance deals thats the one to go for as they are using the maximum loan terms to earn the most fiance commission

also dont worry if they dont advertise it, ask for it because any Finance Manager see the £ signs and know to lift gthe rate, so they will get giddy and deal with you...

another thing make sure you get the full amount...

example:
customer A: car worth £100 gets £900 to make £1000
customer B: car worth £500 gets £500 to m ake £1000
cusomer C: car worth £5000 gets nothing.

why can cusomer A get £900 and the others less, no reason, if the dealer can give a maximum of £900, he can give £900 in any deal

so ask for it, dont be shy, use the above example.. they wont say no unless they dont know what they are doing

also dont forget to ask for normal discount, this will be on top of the £1000 you will save..

last tip, if you have asked for discount and the sales manager hasnt been out to justify why he cant give you the discount, you havent asked for enough

Herzlos

if the dealer is going to get penalised from the finance company if you cancel it early (I can't believe it'll be completely without fees, but I'd need to see the paperwork), surely it'd be better to be honest with them and see if you can just buy cash with the finance penalty as a discount; the dealer is going to lose it anyway.

This whole double-loan early repayment approach seems pretty risky, and could get some people badly burnt.

colino

Surprised this thread is still going on. Think about it, if the car is properly priced, do you think that any sensible trader is going to put a blanket min p/x on anything? He would then be directly taking money out of his own pocket to cover the time and effort putting a heap to the scrappy as well as the hole in his profits. Dream on.

motorguy

colino wrote: »

Surprised this thread is still going on. Think about it, if the car is properly priced, do you think that any sensible trader is going to put a blanket min p/x on anything? He would then be directly taking money out of his own pocket to cover the time and effort putting a heap to the scrappy as well as the hole in his profits. Dream on.

And therein is the crux of this - I've asked Reg to give us a couple of examples of where these cars are actually priced competitively in the first place, so you're seeing a 'real' saving, but unfortunately he so far has declined to do so.

I'd say the odds of a deal like this appearing that you can make a true saving on is very low.

Cornucopia

To be fair, though, what is the true/fair price of a depreciating asset?

In the real world, consumers would receive the optimum prices for cars, if they were priced like vehicle leases but with the option for self-financing. That would mean that the manufacturers would be completely transparent about depreciation over a period of ownership, and would bear the risk of fluctuations in resale value. It would also make for genuine comparisons between vehicles.

And this is the reason, perhaps, why the thread has gone on - we are all suspicious of the car industry, and the ease with which innocent customers can be separated from their hard-earned.

Herzlos

You can't really be transparent about depreciation though; it's purely a guess. With the new tax band system introduced and backdated a few years the cars caught out depreciated far more quickly than could be predicted, and any jump in fuel costs or change in the way car is calculated could seriously impact the value of cars with no notice.

colino

Glass's (and others!) charge handsomely for their depreciation research (best guess) to the trade, otherwise lease and long-term hires just wouldn't be a business. However, get someone in the trade to let you see Glass's Guide, CAP and bring along your own Parkers comic side by side and it will show you that prices, gfv and spread of condition values are more an art than a science. Just as well or we would all drive white Pandas and buy from our nearest set-price outlet.

Cornucopia

Herzlos wrote: »

You can't really be transparent about depreciation though; it's purely a guess. With the new tax band system introduced and backdated a few years the cars caught out depreciated far more quickly than could be predicted, and any jump in fuel costs or change in the way car is calculated could seriously impact the value of cars with no notice.

Perhaps "transparent" was the wrong word. What I really want manufacturers to do is say: you can buy the right to use this (new) car for £X. That'll give you 36 months and 45,000 miles usage, as long as you return it in reasonable condition.

I don't understand why no manufacturer does that. It's almost as if they have little faith in the economic viability of their product.

The closest I've got to making that kind of deal was with my last car before this one, where I made up the deposit for a personal contract purchase to the highest figure allowed. I ended up paying £88 per month, which was basically the interest on the MGFV.

motorguy

Cornucopia wrote: »

Perhaps "transparent" was the wrong word. What I really want manufacturers to do is say: you can buy the right to use this (new) car for £X. That'll give you 36 months and 45,000 miles usage, as long as you return it in reasonable condition.

I don't understand why no manufacturer does that. It's almost as if they have little faith in the economic viability of their product.

The closest I've got to making that kind of deal was with my last car before this one, where I made up the deposit for a personal contract purchase to the highest figure allowed. I ended up paying £88 per month, which was basically the interest on the MGFV.

Thats how manufacturers do it - via PCP and lease deals. They have no particular interest in a guaranteed buy back price otherwise.