Buying cash - legal question

Lord_Snooty

I always have (and always will) purchase my new cars with cash. The thing is, those who purchase on HP, finance or lease always get a better deal from the dealership/manufacturer. Sometimes they get up to £1,000 off the price of the car which is denied to me as a cash payer. I know that the dealership/manufacturer make this money back in interest etc. And PLEASE don't tell me to take finance to get the deal - I have never had it and don't want it. Where I live the recession hasn't really hit so our dealers are not hungry - there are no chances for negotiation. But here is my question - is it actually legal to charge someone more for a car if they are paying cash? Because that is what is actually happening. Surely in this day and age avoidance of debt should be encouraged?

Quentin

Nothing illegal at all.

Consider taking finance to get the discount and paying it off early to make the most of any extra discount available.

gilbert_and_sullivan

Whatever the legalities, you'll most likely do far better than those on the never never by buying via internet sellers (such as Drive the Deal), you'll possibly end up having to travel to collect the car from a dealer who doesn't have quite so many local people addicted to finance, but thats hardly a chore once every three years or however often you change.

There's always ways to beat their loaded system, cash will always be king, well until they ban it, which they will.

arcon5

It's not really a discount though. The seller gets the same amount of money as the 'discount' is made up by their commission. And the commission is effectively being paid for by the buyer whom is also paying a tonne of interest .

Sucks.
But you win in the long run.

Although I suspect if a dealer offers a 0% interest deal they might be willing to move for cash as I'd suspect the price of the interest is built in to the sale price already

neilmcl

Quentin wrote: »

Nothing illegal at all.

Consider taking finance to get the discount and paying it off early to make the most of any extra discount available.

^^This. If you have cash to buy the car outright but can get a good discount/dealer contribution if taking finance then consider taking the finance deal and cancelling the finance (without penalty) before the 14 day cooling off period expires.

zagfles

gilbert_and_sullivan wrote: »

Whatever the legalities, you'll most likely do far better than those on the never never by buying via internet sellers (such as Drive the Deal), you'll possibly end up having to travel to collect the car from a dealer who doesn't have quite so many local people addicted to finance, but thats hardly a chore once every three years or however often you change.

There's always ways to beat their loaded system, cash will always be king, well until they ban it, which they will.

I used Drive the Deal but there was still another £1000 discount if I took finance. So I took the finance and paid it off almost straight away (they even suggested that when I said I wanted to pay cash)! No brainer.

motorguy

arcon5 wrote: »

Although I suspect if a dealer offers a 0% interest deal they might be willing to move for cash as I'd suspect the price of the interest is built in to the sale price already

Not if its a new car as these deals are invariably backed by the manufacturer.

gilbert_and_sullivan

zagfles wrote: »

I used Drive the Deal but there was still another £1000 discount if I took finance. So I took the finance and paid it off almost straight away (they even suggested that when I said I wanted to pay cash)! No brainer.

I like the idea of that, but i'd be worried that somewhere in the small print is a clause to prevent it which i'd inadvertantly signed.

neilmcl

gilbert_and_sullivan wrote: »

I like the idea of that, but i'd be worried that somewhere in the small print is a clause to prevent it which i'd inadvertantly signed.

There won't be. The contract to purchase the car and the finance contract are two completely separate things. You just have to make sure that you only sign the finance contract when you know you're going to get the car before the 14 day period is up, but even then the penalty to pay off after this isn't that much not to make it worth doing.

marlot

I saved £500 last year by buying my wife's new car on finance, then settling within the 14 days. The manufacturer's finance arm were actually very helpful.

Alter_ego_2

Hello, sorry I can't contribute to the original post I just want to add on a query of my own.

I'm currently looking at a mortgage, first time buyer, and have been reading about the scrutiny in mortgage applications these days. For this reason I want to pay cash for a new(to me) car and not have extra finance. I know that credit scores/ratings can improve with credit/finance but I think it would be better if we could say to the mortgage lender, the outgoings are minimal. (Could be wrong, weigh in with opinions please)

Anyway that being said as a cash buyer what realistically should I be haggling for? I would have thought its in our hands but have heard companies prefer finance. Anyone experience with cash buying/haggling? Any tips would be great, thanks.