Deposit Contribution

Car_54

bigadaj said:

MalMonroe said:

The best advice I can give you, if you have a credit card, use that.  Then, if anything at all goes wrong and you hate the car or it breaks down, you can claim all your money back through Section 75. It's a brilliant thing, I bought an old banger that was useless and got all my money back, eventually, plus compensation.

Then you can use your money to just pay off your credit card. 

Do not get finance you do not want. The salesman probably gets commission from the finance company when he sends customers to them. And don't forget that some finance companies will charge you for repaying quickly. If you repay slowly, they'll charge you interest anyway. 

Do what feels best for you, go with your gut. It will never let you down. Don't be persuaded by that salesman's charm! That's what he's there for, to get the most money for himself, not to get a bargain for you.

I have to say that I do not understand that jiggery pokery with £1,000. Are you saying the car is really £2,000 because they're going to refund you £1,000?  Is the car £2k or £3k? It's all a bit confusing. 

And where on earth do you get a new car for that price anyway??? I'll have two at that price, please. 

Whilst it is a good idea to put a deposit onto a credit card then section 75 isn't a panacea. It is legislation that places the card issuer under the same obligations as the retailer so gives an alternative point of redress if things go wrong. 
It's a good thing for the OP to check before the purchase but posts like the above are  misleading and damaging, especialy as that poster hasn't even read the OP properly to understand the actual situation.

Doesn't Section 75 apply to any finance deal, not just credit cards? So the protection would be there in any case.

Scrapit

Car_54 said:

bigadaj said:

MalMonroe said:

The best advice I can give you, if you have a credit card, use that.  Then, if anything at all goes wrong and you hate the car or it breaks down, you can claim all your money back through Section 75. It's a brilliant thing, I bought an old banger that was useless and got all my money back, eventually, plus compensation.

Then you can use your money to just pay off your credit card. 

Do not get finance you do not want. The salesman probably gets commission from the finance company when he sends customers to them. And don't forget that some finance companies will charge you for repaying quickly. If you repay slowly, they'll charge you interest anyway. 

Do what feels best for you, go with your gut. It will never let you down. Don't be persuaded by that salesman's charm! That's what he's there for, to get the most money for himself, not to get a bargain for you.

I have to say that I do not understand that jiggery pokery with £1,000. Are you saying the car is really £2,000 because they're going to refund you £1,000?  Is the car £2k or £3k? It's all a bit confusing. 

And where on earth do you get a new car for that price anyway??? I'll have two at that price, please. 

Whilst it is a good idea to put a deposit onto a credit card then section 75 isn't a panacea. It is legislation that places the card issuer under the same obligations as the retailer so gives an alternative point of redress if things go wrong. 
It's a good thing for the OP to check before the purchase but posts like the above are  misleading and damaging, especialy as that poster hasn't even read the OP properly to understand the actual situation.

Doesn't Section 75 apply to any finance deal, not just credit cards? So the protection would be there in any case.

Yes it does. The advice to use a credit card is bad, don't do it. 

Grumpy_chap

Ordinarily I agree with this.

MalMonroe said:

The best advice I can give you,
Do not get finance you do not want.
The salesman probably gets commission from the finance company when he sends customers to them. 

The last part of that is probably still true, about the commission.

New cars, though, have created a very perverse marketing strategy where they have "deposit contribution allowances" as a trick to get you to take the finance, which is done on the basis that you will not then pay off the finance early, even if you can and, hence, the total you pay is higher.

The important thing is to get the best price you can for the car, which there are various websites that make this easy for brand new car.  This is a negotiation between you and the dealer and the dealer has discretion on the price paid and what discount they give.

Then, take the deposit allowance (which is from the manufacturer / finance company) on top (or below) whatever the best price is that the dealer offered, and the dealer gets commission for selling you the finance.  

This perverse situation means "Do not get finance you do not want" has to be qualified.  In the OP's position, take the finance and then pay it right back off works however absurd that seems.

The only reason not to do this is if the OP plans to get other finance (mortgage) in the near future.

Car_54

Grumpy_chap said:

Ordinarily I agree with this.

MalMonroe said:

The best advice I can give you,
Do not get finance you do not want.
The salesman probably gets commission from the finance company when he sends customers to them. 

Then, take the deposit allowance (which is from the manufacturer / finance company) 

Not necessarily. When I did this (on an "approved used" car) I got £1,000 from the manufacturer plus £500 from the dealer.

born_again

MalMonroe said:

P.S. I forgot to say that if you have a credit card but the limit isn't up to the amount you need, put a deposit on the card of no less than £100. That way you can still claim under Section 75. Don't be rushed into buying, though. You're in charge!

Except that you can pay 1p and still have S75 cover.
But if you are going to mention S75 please add in the critera for it. As Op said new car..
So the purchase price has to be over £100 & under £30K
So if the car is more than £30K it is not covered.

What the dealer said is a good way to get £1K knocked off the purchase price.
A lot of people will go for finance, as often better deal than cash and simply pay it off straight away. Only down side is sales person won't get their commission as finance usually has to run 3 months before they get that.

amyanderson2

Car_54 said:

Grumpy_chap said:

Ordinarily I agree with this.

MalMonroe said:

The best advice I can give you,
Do not get finance you do not want.
The salesman probably gets commission from the finance company when he sends customers to them. 

Then, take the deposit allowance (which is from the manufacturer / finance company) 

Not necessarily. When I did this (on an "approved used" car) I got £1,000 from the manufacturer plus £500 from the dealer.

I have already managed to get £500 off (plus car mats 🙄) so another £1000 on top if I take the finance option. Too good to miss for the sake of what I'm assuming will be a phone call to pay it off? 

ratrace

Op, why buy brand new especially if you have the cash new cars lose a lot in the first 3 years, buy somthing the same car thats 3 years old with 30k on the clock and save yourself a good chunk and put that money in savings incase you need it for some repairs. i wouldn't recommend it especially the way jobs are at the moment once furlough is over thats when we will see the real damage. but and the end of the days its upto you its your cash i thought i would give you another perspective.

marlot

amyanderson2 said:

MalMonroe said:

The best advice I can give you, if you have a credit card, use that.  Then, if anything at all goes wrong and you hate the car or it breaks down, you can claim all your money back through Section 75. It's a brilliant thing, I bought an old banger that was useless and got all my money back, eventually, plus compensation.

Then you can use your money to just pay off your credit card. 

Do not get finance you do not want. The salesman probably gets commission from the finance company when he sends customers to them. And don't forget that some finance companies will charge you for repaying quickly. If you repay slowly, they'll charge you interest anyway. 

Do what feels best for you, go with your gut. It will never let you down. Don't be persuaded by that salesman's charm! That's what he's there for, to get the most money for himself, not to get a bargain for you.

I have to say that I do not understand that jiggery pokery with £1,000. Are you saying the car is really £2,000 because they're going to refund you £1,000?  Is the car £2k or £3k? It's all a bit confusing. 

And where on earth do you get a new car for that price anyway??? I'll have two at that price, please. 

Thanks for that, good advice...

Err.  No it's not good advice.  Specifically it doesn't mention your legal right to settle the finance within 14 days, keeping the deposit contribution.

Grumpy_chap

Car_54 said:

Grumpy_chap said:

Then, take the deposit allowance (which is from the manufacturer / finance company) 

Not necessarily. When I did this (on an "approved used" car) I got £1,000 from the manufacturer plus £500 from the dealer.

I guess that makes sense.
1. Negotiate the best price to buy the car.
2. Put the best price on finance and qualify for the manufacturer's incentive
3. Negotiate a further discount from the dealer as they now have commission for selling the finance and can share that with the purchaser.

amyanderson2 said:

I have already managed to get £500 off (plus car mats 🙄) so another £1000 on top if I take the finance option. Too good to miss for the sake of what I'm assuming will be a phone call to pay it off? 

On a brand new car, you would normally expect some discount from the list price.  Is the £500 discount from already reduced price for a pre-reg car - you said 20 plate and I guess a lot of factory orders now would be 70 plate.

Without knowing what the car is and what you are paying, no-one on this forum can say whether it is a good deal or not.  For brand new cars, it is relatively easy to see what types of deals should be available using online tools.  The main thing that makes it a good deal, though, is that you are happy with it.

This whole finance thing is quite new, I am not sure how new.  I know we did not do it when we bought my wife's car and I now feel maybe we missed a trick.  Ho Hum.

amyanderson2

marlot said:

amyanderson2 said:

MalMonroe said:

The best advice I can give you, if you have a credit card, use that.  Then, if anything at all goes wrong and you hate the car or it breaks down, you can claim all your money back through Section 75. It's a brilliant thing, I bought an old banger that was useless and got all my money back, eventually, plus compensation.

Then you can use your money to just pay off your credit card. 

Do not get finance you do not want. The salesman probably gets commission from the finance company when he sends customers to them. And don't forget that some finance companies will charge you for repaying quickly. If you repay slowly, they'll charge you interest anyway. 

Do what feels best for you, go with your gut. It will never let you down. Don't be persuaded by that salesman's charm! That's what he's there for, to get the most money for himself, not to get a bargain for you.

I have to say that I do not understand that jiggery pokery with £1,000. Are you saying the car is really £2,000 because they're going to refund you £1,000?  Is the car £2k or £3k? It's all a bit confusing. 

And where on earth do you get a new car for that price anyway??? I'll have two at that price, please. 

Thanks for that, good advice...

Err.  No it's not good advice.  Specifically it doesn't mention your legal right to settle the finance within 14 days, keeping the deposit contribution.

I specifically meant the credit card side of it as I didn't think of that 👍