Advice about new car buying and loan cancelling

adidas

Hello


Been trawling my way through the forums to look for advice about the cheapest way to get a new or nearly new car. One thread popped up with someone saying that you could agree to the finance but later cancel the plan and pay the 'settlement figure' that is usually the price of the car in cash within 30 days, before a payment had been taken which will help reduce your outlay. And that there would not be any other penalties?!


It sounds a bit dangerous to me and wanted some views. I have heard of people doing things like buying extended warranties but cancelling them to help with haggling costs.


Has anyone purchased a car in this way before?

bigjl

How could it reduce your outlay?

Cars costs £10k

Put down £1k

Interest say £2k

Total £12k

Try to settle the finance in the first month and you will likely still have to pay the document fee and also some interest

If you have £10k then buy without finance

If you don't have £10k then use finance

If you cancel your warranty(or more correctly mechanic breakdown insurance) you will incur fees

Don't know who you have been getting your info from but they don't sound completely legit

WTFH

It is possible to cancel the loan agreement - normally that's within about 14 days, but if you can afford to pay for the car 14 days after buying it, then you'd be better to wait 14 days before you buy it!

flashg67

WTFH wrote: »

It is possible to cancel the loan agreement - normally that's within about 14 days, but if you can afford to pay for the car 14 days after buying it, then you'd be better to wait 14 days before you buy it!

Agreed, unless you get a better price on the car by taking the dealer finance initially, as can happen with the finance company paying bonuses to the dealer?

Johnmcl7

flashg67 wrote: »

Agreed, unless you get a better price on the car by taking the dealer finance initially, as can happen with the finance company paying bonuses to the dealer?

That was my thought as well as I think there's a thread on here on VW where people were getting discounts off the car price and some free servicing if they took out finance even if they cancelled it. Even that though seems more of a sweetener given a new car will lose a lot of money initially.

John

hollie.weimeraner

There is normally a minimum number of payments before finance agreements can be settled.


EG I bought a new Ford earlier this year and received a £2000 discount off the price providing I took out the finance. I have to pay 6 instalments before I can settle it but it still saved me £1800. Each manufacturer is likely to stipulate their own terms though.
Better to choose your car and then look at the cheapest option to purchase.
The cheapest way to buy a new car is normally through an online broker though such as drive the deal. Especially if you don't have a PX.

adidas

Thanks for all your views. I was just wondering about it really because when I've been looking through the threads someone suggested this as a way forward to get money off. i.e. dealership earns commission on the finance so want you to take that option so give you a better deal.


Thanks for pointing out the different terms in the loan agreement. Do you mean it saved you £1,800 off the list price of the new car?


Yeah I agree with flash and John. I'm experienced with money so could handle a complex transaction or monitoring agreements etc if it meant I'd get a good deal on the car. I take your points though about the depreciation but looking at 1 to 2 year old cars, they are nearly as much as the new ones!


I have a few ideas for cars but if there was a particularly good deal on a car that I thought was decent then would go for that. (I know sometimes car companies do sweeteners for poor selling or unpopular models/brands, but if it was in the reliable category, Toyota, Hyundai etc then would be worth it).

adidas

Just found this.....http://www.theguardian.com/money/2013/feb/17/motoring-consumer-affairs

forgotmyname

The discount they offer you for taking out finance will be fairly small. Possibly saving a few hundred £ on a £10,000 car.

Then you need to take into account the charges for cancelling early and making sure its all clear and nothing left outstanding.

hollie.weimeraner

adidas wrote: »

Thanks for pointing out the different terms in the loan agreement. Do you mean it saved you £1,800 off the list price of the new car?

It was a special promotion, as long as anyone took out finance Ford took £2,000 off the list price. I also negotiated a further discount with the dealer. The £1800 saving I mentioned is purely on the finance after I have paid 6 months interest.

travellerboy

I just bought a new car, delivery for 1st March.
The car cost just over £30K, the dealer offer a maximum discount of £2650 whether cash or finance.
I then obtained quotations for the same car via Carwow, Orangewheels, and Drivethedeal, all of these website are easily found by googling.


In the end bought at the local dealer for £5700 off the OTR list price (18% discount)