HP , (very) early repayment

robber2

hi Board,

Im needing to buy a replacement car and just want to understand my best money saving approach to the process. I have the cash available but should also have no probelm being accepted for finance. I'm also not in a hurry and will be happy to walk away as a bargaining ploy.
So, I'm thinking that I should start by offering a cash payment of 15-20% below the advertised price but I would also be open to offers from the dealer of an HP deal. Which option would a dealer prefer?

If I accept the HP I understand that I have 14 days to change my mind and pay the debt off in full with the only cost being the daily interest charge. Is this correct?

Any suggestions or advice appreciated.

thanks

foxy-stoat

I would research the market before making offers, as you may get laughed at.

Your better off finding the most keenly price car you want at the nearest dealer first, rather than picking a dearer priced car and reducing the screen price.

Some dealers will give you a better deal with HP as they get commission on the finance, but do not expect 15-20%.

Pixie5740

Car dealerships make more money selling finance than they do selling cars do I doubt you'll get much of a discount offering cash (this isn't the 80s) let alone a discount of 15% to 20%. Even taking the finance you'd be doing extremely well to get that sort of discount.

If you're trying to be MSE and it's a second hand car you're after then private sales will be cheaper than buying a car from a dealership. If it's a brand new car you are after then try https://www.drivethedeal.com

robber2

thanks for your advice both, I'm looking for second hand but newish. I recall seeing past postings suggesting that a good discount could be negitiated in exchange for going down the HP and then using the 14 day cooling off period to cancel and clear it .

SeanG79

If the dealer knows you will be settling within 14 days they will not want to go down that route.

Dealers will normally move on price but not 15-20%.

robber2

hi SeanG79, thanks for the response, It would be my intention to go into the HP agreement willingly then pull out and settle it after 14 days. I certainly wouldnt let on to the dealer that that was my plan.

thanks for the advice on discounts; I guess 5 to 10% would be a more realistic offer these days?

Nebulous2

It is easier to compare discounts on new cars because they all have a retail price and 15-20% is possible, if you pick cars they need to sell. That can happen for many reasons; over-production, old models, unpopular colours, undesirable brands etc. Most of those reasons will mean you will also find difficulty selling in a few years time.

Second-hand cars are more difficult to price as the dealer may be expensive to start with and happy to knock 10% off, whilst still being dearer than some competitors. It's also more difficult to compare because there are more variables. For a two year old car how much difference does 30,000 miles make compared to 16,000? A car with a bodywork repair compared with one without?

Then you need to add in whether you are trading in. Cost to change is often touted and has some merit but again you can only really compare with two near identical cars.

So it's a minefield - with people who only negotiate on cars once every few years pitting their wits against people who do it several times a day.

Pixie5740

The best price isn't necessarily at your local dealership. I've travelled from Aberdeen to Derby because I could get the car I wanted at a lower price (including the flight to Birmingham and train to Derby). You need to do your research and know how much the make, model and spec you want costs across the UK. Some areas are more open to negotiation as well. Aberdeen used to be notoriously bad for negotiating any kind of discount (oil at $30/bbl has changed that a little bit) but head down the A90 to Dundee and you stand a better chance.