0% finance deal and cashback, what's the catch?

EssexExile

I bought my Honda new three years ago & the salesman wouldn't give any more discount for cash, so I took the 0% 3 year finance that he was pushing & kept the money in the savings account. Just finished paying it off, no catches, it doesn't make any sense to me but if they want to give me money I'll take it.

jellie

bazster wrote: »

Yup, commission. My mate tried to buy a new Ford and they flatly refused to take his cash. It was finance or no deal. He walked away.

You have a statutory right to cancel the finance within 14 days and you'll only pay interest on the number of days since drawdown.

Just done it myself - cost me £5 in interest but kept the discount for taking finance.

bazster

EssexExile wrote: »

I bought my Honda new three years ago & the salesman wouldn't give any more discount for cash, so I took the 0% 3 year finance that he was pushing & kept the money in the savings account. Just finished paying it off, no catches, it doesn't make any sense to me but if they want to give me money I'll take it.

There's no such thing as 0% finance. You are paying an inflated price with the finance cost hidden in it. That hidden finance cost includes commission to the stealership, which is worth more to them than the profit on the car hence the refusal to give a cash discount.

bazster

jellie wrote: »

You have a statutory right to cancel the finance within 14 days and you'll only pay interest on the number of days since drawdown.

Just done it myself - cost me £5 in interest but kept the discount for taking finance.

I won't tell him that. He went and bought an Audi instead which has caused him no end of grief, he'll be pretty upset if he discovers he could've had the Ford after all!

Hal17

Hi Bazster, was it really that easy? VW are currently offering £2K on their Personal Contract Plan against a Golf but nothing if I want to pay cash.

Did you just get an invoice to pay the total of the balance due. Appreciate your feedback.

bazster

I think that's a question for jellie!

forgotmyname

VW maybe offering that deal, but have you compared drive the deal and other similar sites to see how much you can get it down to without messing with the finance and having to cancel it later?

arcon5

They'll make less money by you taking the 0% finance, but that doesn't matter because the salesman is only concerned about hitting his targets and getting his commission. My guess would be if companys offered incentives which reflected these costs things would be different

Aretnap

bazster wrote: »

There's no such thing as 0% finance. You are paying an inflated price with the finance cost hidden in it. That hidden finance cost includes commission to the stealership, which is worth more to them than the profit on the car hence the refusal to give a cash discount.

If they're advertising 0% finance they can't give a discount for cash - if they do it isn't really 0% finance.

jellie

Hal17 wrote: »

Hi Bazster, was it really that easy? VW are currently offering £2K on their Personal Contract Plan against a Golf but nothing if I want to pay cash.

Did you just get an invoice to pay the total of the balance due. Appreciate your feedback.

I think you mean me.

I signed all the finance paperwork on the day I picked up the car, as per normal. Rang the finance company up 7 days later, told them I wanted to withdraw from the finance.

They gave me the amount to be paid (which matched the car invoice, plus £5 and some pence interest). Sent me a letter confirming the amount, I rang up to pay but they have a £3k card limit so couldn't. Lady I spoke to emailed me their bank account and sort code details. Paid by bank transfer, got confirmation about a week later that they no longer had any interest in the car. Very painless and no questions asked. Kept my £800 discount for taking the finance.

Do not leave it longer than 14 days, or you'll be looking at a settlement figure which will cost much more in interest.

I've given you such a detailed response as mine is an Audi, so same finance co as you would have if you buy a Golf.