New car on finance cheaper than cash!!

cardeal123

I am looking to buy a new car. I have been told by two large vw and ford dealerships that buying on finance is cheaper than cash, which is how I want to buy it. They say people are taking advantage of any deposit contributions as part of the scheme to reduce the price of the car eg £1000.00. They then pay the monthly payment for a couple of months then cancel the agreement. They pay a small fee for the cancellation and then pay off the rest of the car and apparently its all 100% legit.

Is this too good to be true ??

First I am hearing of it.

spacey2012

They will tell a twenty pound note pops out of the CD player every morning if it gets you to sign up for credit.
They are on commission.

DUTR

cardeal123 wrote: »

I am looking to buy a new car. I have been told by two large vw and ford dealerships that buying on finance is cheaper than cash, which is how I want to buy it. They say people are taking advantage of any deposit contributions as part of the scheme to reduce the price of the car eg £1000.00. They then pay the monthly payment for a couple of months then cancel the agreement. They pay a small fee for the cancellation and then pay off the rest of the car and apparently its all 100% legit.

Is this too good to be true ??

First I am hearing of it.

I don't know about you, but since junior school we were taught maths, not sure why you are unable to get a pen, paper and calculator, to do a quick 5 mins and see if you would actually save anything?
But remember they are there to sell you finance and possibly a car, they are not your mate or charity, so look out for yourself 1st.

neilmcl

cardeal123 wrote: »

I am looking to buy a new car. I have been told by two large vw and ford dealerships that buying on finance is cheaper than cash, which is how I want to buy it. They say people are taking advantage of any deposit contributions as part of the scheme to reduce the price of the car eg £1000.00. They then pay the monthly payment for a couple of months then cancel the agreement. They pay a small fee for the cancellation and then pay off the rest of the car and apparently its all 100% legit.

Is this too good to be true ??

First I am hearing of it.

If at the end of the day you can get a bigger discount and dealer contributions for a finance deal than you would get for a cash purchase then in some cases, yes they are correct.

Also, it's not, as is a common misconception, all about commission or "knock backs" from finance companies that drives the finance push. Ultimately it's about shifting units and the most popular way to buy a new car is via finance. This is why they can offer better deals than purchases via cash.

alleycat`

I'm certainly aware on VW finance that you can get dealer deposits, free servicing and other bits as part of the deal with taking out finance.

I've also read that if you cancel within the 14 days (i.e. pay off the finance) you can do it without penalty and still maintain the freebies you got.

So under certain circumstances it is true.

neilmcl

alleycat` wrote: »

I'm certainly aware on VW finance that you can get dealer deposits, free servicing and other bits as part of the deal with taking out finance.

I've also read that if you cancel within the 14 days (i.e. pay off the finance) you can do it without penalty and still maintain the freebies you got.

So under certain circumstances it is true.

Even taking into account interest etc for taking the finance deal to it's full term I've still made a saving on a cash deal when I purchased my new BMW last year. So it can be done but as another poster stated you need to check your maths first.

cardeal123

DUTR wrote: »

I don't know about you, but since junior school we were taught maths, not sure why you are unable to get a pen, paper and calculator, to do a quick 5 mins and see if you would actually save anything?
But remember they are there to sell you finance and possibly a car, they are not your mate or charity, so look out for yourself 1st.

One wonders why you even joined the forum with answers like that. Just asking about any catches if you are aware, not maths question.

DUTR

cardeal123 wrote: »

One wonders why you even joined the forum with answers like that. Just asking about any catches if you are aware, not maths question.

Well with a screen name like cardeal, it wouldn't surprise me if you were a salesperson fishing to sell a car/finance through here .
Nowt wrong with asking if there are any catches and there is no rule that answers have to be wrapped in cotton wool.
Still you can't ignore a maths question, it is part of basic developed country education,
you know what the screen price is or will be, you know what discounts if any are, then you know what reductions you will get for any finance agreement, the interest rates applicable and the total sum you would have paid over the duration with any acceptance fees etc.
So yes, like it or not you will have to do some basic maths and not simply accept what some sales person is telling you.

forgotmyname

Salesman gets you to take finance where you pay £2000 - £3000 over the cash price. Salesman gets £500 - £750 commission. So he can afford to knock £300 - £500 off for a finance sale.

All figures off the top of my head.

DUTR

forgotmyname wrote: »

Salesman gets you to take finance where you pay £2000 - £3000 over the cash price. Salesman gets £500 - £750 commission. So he can afford to knock £300 - £500 off for a finance sale.

All figures off the top of my head.

Yep and another 'trick' they will do , is for instance cardeal123 says "I can afford to pay say £300/month"
So the salesman simply increases the term of the loan.

Daddy942

Lol it's funny but most of these answers are rubbish


Yes it can be cheaper to purchase a car on finance as the dealer is paid the deposit allowance from the manufacturer