Why are my elderly friends bullied into credit deal?

JP08

As others have said, it may be a very good deal.

Having been very un-money-saving-expert and bought a new car recently, Toyota Finance (or whoever they are) were stumping up £750 for us to take out a 0% interest finance option. So we stumped up the old Skoda as a payment, not a penny added, and the the money will sit in its own account making the payments and accruing interest for the next 3.5 years. Go figure.

AnotherJoe

JP08 wrote: »

As others have said, it may be a very good deal.

Having been very un-money-saving-expert and bought a new car recently, Toyota Finance (or whoever they are) were stumping up £750 for us to take out a 0% interest finance option. So we stumped up the old Skoda as a payment, not a penny added, and the the money will sit in its own account making the payments and accruing interest for the next 3.5 years. Go figure.

And all these shenigans will be wholly counter intuitive to people who lived in an era when "cash was king" and the best (only) way to get a discount was with cash.

Its hard to unlearn a lifetime of being told and experiencing that you'll get your discount if you pay with cash. They may flat out not believe the sales person or the OP helping them.

NBLondon

I guess "cash was king" when the small dealer got an advantage e.g. having the cash in hand to buy more stock/pay the staff/ forget to pay the tax. Now - their advantage is probably in volume discounts from the manufacturer and commission on the finance deals. Cash is probably still king in the under £1000 back street places...

Blackavar

AnotherJoe wrote: »

And all these shenigans will be wholly counter intuitive to people who lived in an era when "cash was king" and the best (only) way to get a discount was with cash.

Its hard to unlearn a lifetime of being told and experiencing that you'll get your discount if you pay with cash. They may flat out not believe the sales person or the OP helping them.

This is so true. Back in the day, you could walk into a showroom, ask the price of a car, be given the cost and follow up with 'how much discount for cash?'.
They are amazed that in a showroom when asking a sales guy 'how much is this car?' they just cannot get the guy to give a number and are even more surprised that cash upfront is of no interest.
Also, as law abiding citizens, they understandably feel very uncomfortable about being party to what they see as a bit of a fiddle with taking out an agreement in the full knowledge they will be cancelling it. They would expect this from a dodgy back street dealer but not a main dealership but I guess this is what must be done to get them the best deal these days. Hmmm, I will have a go at explaining this to them ....

AnotherJoe

Blackavar wrote: »

This is so true. Back in the day, you could walk into a showroom, ask the price of a car, be given the cost and follow up with 'how much discount for cash?'.
They are amazed that in a showroom when asking a sales guy 'how much is this car?' they just cannot get the guy to give a number and are even more surprised that cash upfront is of no interest.
Also, as law abiding citizens, they understandably feel very uncomfortable about being party to what they see as a bit of a fiddle with taking out an agreement in the full knowledge they will be cancelling it. They would expect this from a dodgy back street dealer but not a main dealership but I guess this is what must be done to get them the best deal these days. Hmmm, I will have a go at explaining this to them ....

The main dealership will be complicit in this. I first cottoned onto this when a dealership advised me to do it ! Seems they got their commission for selling finance and it isn't reversed even if you [STRIKE]cancel[/STRIKE] settle the next day

Iceweasel

Remember NOT to use the words 'discount' or 'cancel' when dealing with car salesmen.

They have taken on new meanings these days, which would need explaining to those from an older generation.

Good luck.

neilmcl

AnotherJoe wrote: »

The main dealership will be complicit in this. I first cottoned onto this when a dealership advised me to do it ! Seems they got their commission for selling finance and it isn't reversed even if you [STRIKE]cancel[/STRIKE] settle the next day

In truth individual salesman make very little selling their manufacture backed finance.

It's all about the volume of sales, so whatever is easier to get a new car sale, which invariably is a finance deal, then that's what they'll push. They also make more money selling their over-priced GAP insurance and any other "extras".

[Deleted User]

When old folk think that cash still has the power it is because they think the dealer is only getting paid monthly from your monthly payments when you take out finance. They don't realise that the dealer is getting all the cash upfront from the finance company and that it is only them who they are paying back monthly, not the dealer.

It goes back the 1940s, 50s, etc when independent department stores would give you credit on big ticket items. Where you would visit the store each week/month to pay it off. No third party finance company involved.

bigadaj

It's a dodgy and perverted system.

Old adages still hold try, one of which is that turnover is vanity, cash flow is sanity but cash is king.

bod1467

bigadaj wrote: »

It's a dodgy and perverted system.

Old adages still hold try, one of which is that turnover is vanity, cash flow is sanity but cash is king.

With finance the dealer IS getting "cash" straight away ... as well as a kick-back for arranging the finance. Hence why they push finance.