Used car dealer - finance (and cancelling), and warranty?

MercilessKiller

Hi MSEers

I’m looking at buying a used car from a highly reviewed and well established dealer. The 2 red flags I have are:

1) Huge pressure to buy a long term warranty with the car (no warranty included). On the flip side, they offer cars at much lower prices so it feels this is worth it but is a sizeable cost - it’s a reliable car 4 years old with 50k miles so I’m on the fence. 

2) Unable to see the car before paying a deposit. Partly my fault for living other side of the country. However whilst it’s non refundable, they do promise to refund it if the car isn’t as described to me (no scratches, dents, problems of any kind etc) - they really do have a ton of amazing reviews and nearly no bad ones. 

Overall I’m less worried, but do want to figure out my options. I’m a cash buyer and I believe used car dealers hate cash buyers right? 

One thing I was thinking is haggling and suggesting I’ll go for finance and inc the warranty and see what discount they’ll do. If fairly good for using finance, then go for it and within 14 days, cancel my finance agreement. 

I believe this would allow me to either return the car (minus the deposit) or pay the full balance and keep the discount. 

Is my understanding right there or do they have the right to increase the price if I cancel the finance within 14 days?

thanks for your help everyone!

AdrianC

MercilessKiller said:

1) Huge pressure to buy a long term warranty with the car (no warranty included). On the flip side, they offer cars at much lower prices so it feels this is worth it but is a sizeable cost - it’s a reliable car 4 years old with 50k miles so I’m on the fence.

Any aftermarket used car warranty is basically a bet that your car is going to be less reliable than the warranty company expect.

Remember, the price you pay for the warranty covers the dealer's commission, the warranty provider's office costs, staff costs, taxes, profit... oh, yes - AND the claims they expect to pay out. 

2) Unable to see the car before paying a deposit. Partly my fault for living other side of the country. However whilst it’s non refundable, they do promise to refund it if the car isn’t as described to me (no scratches, dents, problems of any kind etc) - they really do have a ton of amazing reviews and nearly no bad ones.

When you say "partly", do you mean that even if you went to their site, you wouldn't be able to view?

The UK is not a big country. Pretty much everywhere is doable within a day's round trip.

Sure, you get extra consumer rights if the sale is TOTALLY remote, and you never set foot on the vendor's site right up until the car is delivered to you... but isn't it easier to just take the time and make sure that it's as described in the first place?

A 4yo car is likely to be fairly generic - I presume there's nothing vaguely similar available closer to you...?

I’m a cash buyer and I believe used car dealers hate cash buyers right?

Not "hate" - they just make money off the finance, too...

MercilessKiller

AdrianC said:

MercilessKiller said:

1) Huge pressure to buy a long term warranty with the car (no warranty included). On the flip side, they offer cars at much lower prices so it feels this is worth it but is a sizeable cost - it’s a reliable car 4 years old with 50k miles so I’m on the fence.

Any aftermarket used car warranty is basically a bet that your car is going to be less reliable than the warranty company expect.

Remember, the price you pay for the warranty covers the dealer's commission, the warranty provider's office costs, staff costs, taxes, profit... oh, yes - AND the claims they expect to pay out. 

2) Unable to see the car before paying a deposit. Partly my fault for living other side of the country. However whilst it’s non refundable, they do promise to refund it if the car isn’t as described to me (no scratches, dents, problems of any kind etc) - they really do have a ton of amazing reviews and nearly no bad ones.

When you say "partly", do you mean that even if you went to their site, you wouldn't be able to view?

The UK is not a big country. Pretty much everywhere is doable within a day's round trip.

Sure, you get extra consumer rights if the sale is TOTALLY remote, and you never set foot on the vendor's site right up until the car is delivered to you... but isn't it easier to just take the time and make sure that it's as described in the first place?

A 4yo car is likely to be fairly generic - I presume there's nothing vaguely similar available closer to you...?

I’m a cash buyer and I believe used car dealers hate cash buyers right?

Not "hate" - they just make money off the finance, too...

From what the guy indicated even when walking up, they have to book in the test drive which requires the deposit. I’ll call to confirm today though - but it seems to be something I’ve seen a few times recently where a larger “company” rather than a traditional dealer prepares the car for the test drive/sale together but waits until the deposit before doing that. 

It could be that’s just what this guy told me on the phone though. Based on their reviews (over 1k positive ones and more coming daily) It doesn’t seem too absurd. 

Also the price is VERY good for this 4 year old car (I’m guessing due to higher mileage at 50k and because of no dealer warranty included) - with the current car market a part of me is definitely keen not to miss out as prices go up. 

Interesting point about the warranty though - it feels like the service provided may not be as favourable if I don’t go for the warranty based on the hard pushing on that. 

AdrianC

50k is absolutely not high mileage for 4yo - 12.5k/yr average.

My first question on this would be why it's such a keen price, and why it's not main dealer approved-used.

And I would DEFINITELY be very wary of a supplier that refused to let you see the goods until you'd agreed to buy them and put money on the table. SO many alarm bells. I trust online reviews as far as I can kick them.

MercilessKiller

AdrianC said:

50k is absolutely not high mileage for 4yo - 12.5k/yr average.

My first question on this would be why it's such a keen price, and why it's not main dealer approved-used.

And I would DEFINITELY be very wary of a supplier that refused to let you see the goods until you'd agreed to buy them and put money on the table. SO many alarm bells. I trust online reviews as far as I can kick them.

So I think the reason it's keenly priced is because official dealers include warranty a lot of the time baked in - That's what some of the reviews suggest too. 

I'll give them a call again today to see if I can arrange to come see if and discuss the details then without paying the deposit and see what happens - It may have been more a pressure selling tactic I guess

Clive_Woody

Name the dealer and folk on here can confirm if they've had any experience with them. No need for secrecy.

Paying a non refundable deposit to even get a test drive is shocking. I would walk away.

AdrianC

The OP messaged me the URL to the car in question.

It's a reasonably generic mainstream hatch, at a largeish non-franchise dealer in the home counties. It's not a bad price, but it's less than a four-figure difference to other similar cars, and it's been in stock and on Autotrader for a month.

They've contacted the dealer, who have agreed to a no-deposit viewing. The OP is on the way there right now.

MercilessKiller

yeh thanks for all the comments!

Saw the car and ultimately:
1) Got to test drive it with no deposit. Drove wonderfully (and has recently had brake pads replaced) but it did flash an error very briefly. They're going to check it out tomorrow - I didn't pay the deposit to reserve the car due to that
2) In terms of condition, the car was beautiful. No blemishes at all really inside or out. Felt like great condition and so makes the price look more attractive
3) 4 year old car but only 3 services (one recently). Missed a service last year when it did 30k miles so that was annoying (and maybe why cheaper) but recent service and MOT showed no issues and with fairly new tyres and replaced brake pads, feels good

I'm going to see what they say about the error that flashed tomorrow but tempted to reserve and buy it (without the warranty!!!!). Reason without is that with the warranty, the price is more comparable with similar models from Honda's official site (and slightly less mileage) so it seems to be only a good deal without the warranty. 

Major thanks to Adrian for helping talk through some of this with me today!

AdrianC

The car is advertised at £11.5k, with a £250 admin fee. They want £1,200 for a 3yr aftermarket warranty!

Honda have similar cars, slightly newer and lower mileage, approved-used, for £13k.

MercilessKiller

AdrianC said:

The car is advertised at £11.5k, with a £250 admin fee. They want £1,200 for a 3yr aftermarket warranty!

Honda have similar cars, slightly newer and lower mileage, approved-used, for £13k.

Yeh speaking to one of them later today. The extra money eases some of the concerns for sure and the Honda 12 month guarantee is then extendable if needed anyway so we'll see

ontheroad1970

Approved used warranties often come with other perks.  When I had an approved used Mercedes, I locked my keys in the boot, and the dealer called a dealer closer to me who sent out an engineer with an OBD which instructed the doors to open.  Charge?  Zero.  Approved used often come with free breakdown cover also.