Car finance.

ipri

Hi...I went to Citroen garage and enquired about car. I am able to pay cash....salesman says, "don't that"!...use finance....then pay off all the balance.. then pay the penalty of 1 months payment and save about £4k".....I know they make on finance deals...is this just another way to get me to take finance out? thanks.

bodgerx

ipri wrote: »

Hi...I went to Citroen garage and enquired about car. I am able to pay cash....salesman says, "don't that"!...use finance....then pay off all the balance.. then pay the penalty of 1 months payment and save about £4k".....I know they make on finance deals...is this just another way to get me to take finance out? thanks.

Yes, it's where a chunk of the salesperson's money comes from on a new car. Without it, you are cutting him out of a deal.

If you are more comfortable paying on finance, don't back down.

What is the total saving (minus the 1 month interest and fees?)

ipri

Around £4,000 apparently thanks

scaredofdebt

Get it in writing, that you are able to pay it off like that and the penalty still leaves you saving that amount.

anotherbaldrick

What interest rate on the finance / That is the important question. Some manufacturers are charging a lower rate than you can get on deposit.

bodgerx

anotherbaldrick wrote: »

What interest rate on the finance / That is the important question. Some manufacturers are charging a lower rate than you can get on deposit.

But if you are not getting the 4k discount hat the OP states, given he is paying it off within the first month, it's kind of academic.

Ultrasonic

ipri wrote: »

Hi...I went to Citroen garage and enquired about car. I am able to pay cash....salesman says, "don't that"!...use finance....then pay off all the balance.. then pay the penalty of 1 months payment and save about £4k"

If the salesman really did say "don't that" then I'd struggle to trust his mathematical skills on adding up a bar bill, let alone a car finance deal...

Having said that, this might be a way to ultimately save money, it is a suggestion I've heard of before. But personally I'd be wary taking out finance I didn't need, and would be reading every single word of any contract before signing. And I'd be doing this before paying any sort of deposit.

Edit: Oh, and I struggle to believe that the saving really would be £4k unless this is a seriously expensive car.

OddballJamie

OP if this is a new car, have you tried getting prices from online brokers. Citroen are known to giving massive discounts, I still remember the Saxo ads with free insurance and VAT equivalent knocked off.

ipri

Ultrasonic wrote: »

If the salesman really did say "don't that" then I'd struggle to trust his mathematical skills on adding up a bar bill, let alone a car finance deal...

.

A typo actually....dear oh dear..just for you "Don't do that".

neilmcl

You buy a car on PCP with a big enough dealer contribution, then cancel the finance within 14 days and pay off the balance, keeping the discount. Buyers have been doing this for ages, particularly with online broker deals. Quite refreshing to see a salesman acknowledge it. At the end of the day, the salesman's happy because he makes money on the finance deal and you're happy because you've got a cheaper car than you would have done buying with cash alone.

As long as the sums add up there's no problem with this at all.