How to pay for a new car?

[Deleted User]

sandy700 said:

I am thinking of buying a brand new car.
I have the money in the bank to pay cash but should I?

Personally I'd say buy 2nd hand / nearly new if you want to save money. Or if you want to spend the same amount, getter a high spec / better car with the same money. Either way you will reduce the deprecation losses far beyond any benefits of the cash vs finance deals.

EssexExile said:

The last two times I bought a new car the dealers paid me to take the 0% finance. It seemed rude not to, otherwise I would've paid cash.

The dealer didn't pay you to take 0% finance at all, they either weren't permitted to or didn't want to discount the car for cash purchase because they knew you would still buy it anyway. Hidden in the full price was the cost of finance.

Unfortunately new cars are priced for finance deals and even with 0% finance you are paying over the odds because the interest is already built into the price. So few people buy new cars with cash that there is no incentive in offering a better cash price for a car - so the pricing is inflated to include interest and 0% or low interest rates are advertised.

Sometimes the 0% finance deals are on the cars that don't sell as quickly, bottom spec and top spec models with the middle range models not included - purely to increase sales on those models, but the price has already been adjusted to include the cost of lending.

It is really rare to get a truly 0% finance - who in their right mind would lend money for no profit? Yes there are 0% credit card deals that exist but they prey on the fact that enough customers won't be able to clear the debt at the end of the 0% to be able to make a profit later on down the line.

born_again

With the lack of new cars getting any sort of discount for cash is not going to be easy.

iwb100

[Deleted User] said:

sandy700 said:

I am thinking of buying a brand new car.
I have the money in the bank to pay cash but should I?

Personally I'd say buy 2nd hand / nearly new if you want to save money. Or if you want to spend the same amount, getter a high spec / better car with the same money. Either way you will reduce the deprecation losses far beyond any benefits of the cash vs finance deals.

EssexExile said:

The last two times I bought a new car the dealers paid me to take the 0% finance. It seemed rude not to, otherwise I would've paid cash.

The dealer didn't pay you to take 0% finance at all, they either weren't permitted to or didn't want to discount the car for cash purchase because they knew you would still buy it anyway. Hidden in the full price was the cost of finance.

Unfortunately new cars are priced for finance deals and even with 0% finance you are paying over the odds because the interest is already built into the price. So few people buy new cars with cash that there is no incentive in offering a better cash price for a car - so the pricing is inflated to include interest and 0% or low interest rates are advertised.

Sometimes the 0% finance deals are on the cars that don't sell as quickly, bottom spec and top spec models with the middle range models not included - purely to increase sales on those models, but the price has already been adjusted to include the cost of lending.

It is really rare to get a truly 0% finance - who in their right mind would lend money for no profit? Yes there are 0% credit card deals that exist but they prey on the fact that enough customers won't be able to clear the debt at the end of the 0% to be able to make a profit later on down the line.

Nearly new is a terrible idea right now. Better off buying new. Nearly new are at a premium due to availability of new cars and often priced higher than would be to buy new. That’s before we get into the fact that the PCP deals are obviously terrible for second hand with high APR and lower discounts.

motorguy

[Deleted User] said:

Personally I'd say buy 2nd hand / nearly new if you want to save money. Or if you want to spend the same amount, getter a high spec / better car with the same money. Either way you will reduce the deprecation losses far beyond any benefits of the cash vs finance deals.

Because of how difficult it is to get a new car right now, you could easily pay more for a nearly new one.  

motorguy

[Deleted User] said:

It is really rare to get a truly 0% finance - who in their right mind would lend money for no profit? Yes there are 0% credit card deals that exist but they prey on the fact that enough customers won't be able to clear the debt at the end of the 0% to be able to make a profit later on down the line.

The finance incentives on a new car are offered by the manufacturer and not funded by the dealer.  It certainly doesnt come out of the dealers profit margin.

The manufacturers are "in their right mind" as they are using 0% finance as a tool to help them sell cars, which is their purpose after all.

Quite a good tool at the moment as most people are aware of rising interest rates and costs so 0% can pique someones interest and get them in the door.

motorguy

iwb100 said:

[Deleted User] said:

sandy700 said:

I am thinking of buying a brand new car.
I have the money in the bank to pay cash but should I?

Personally I'd say buy 2nd hand / nearly new if you want to save money. Or if you want to spend the same amount, getter a high spec / better car with the same money. Either way you will reduce the deprecation losses far beyond any benefits of the cash vs finance deals.

EssexExile said:

The last two times I bought a new car the dealers paid me to take the 0% finance. It seemed rude not to, otherwise I would've paid cash.

The dealer didn't pay you to take 0% finance at all, they either weren't permitted to or didn't want to discount the car for cash purchase because they knew you would still buy it anyway. Hidden in the full price was the cost of finance.

Unfortunately new cars are priced for finance deals and even with 0% finance you are paying over the odds because the interest is already built into the price. So few people buy new cars with cash that there is no incentive in offering a better cash price for a car - so the pricing is inflated to include interest and 0% or low interest rates are advertised.

Sometimes the 0% finance deals are on the cars that don't sell as quickly, bottom spec and top spec models with the middle range models not included - purely to increase sales on those models, but the price has already been adjusted to include the cost of lending.

It is really rare to get a truly 0% finance - who in their right mind would lend money for no profit? Yes there are 0% credit card deals that exist but they prey on the fact that enough customers won't be able to clear the debt at the end of the 0% to be able to make a profit later on down the line.

Nearly new is a terrible idea right now. Better off buying new. Nearly new are at a premium due to availability of new cars and often priced higher than would be to buy new. That’s before we get into the fact that the PCP deals are obviously terrible for second hand with high APR and lower discounts.

+1

Totally agree.

motorguy

sandy700 said:

I am thinking of buying a brand new car.
I have the money in the bank to pay cash but should I?

As others have said - more info needed.

• What car are you thinking of buying?
• Are there any finance offers on the car?
• Are you totally fixed on a particular car?  ie, if you're looking a small hatch but there are no offers on, would you consider a different brand / model?

iwb100

motorguy said:

iwb100 said:

[Deleted User] said:

sandy700 said:

I am thinking of buying a brand new car.
I have the money in the bank to pay cash but should I?

Personally I'd say buy 2nd hand / nearly new if you want to save money. Or if you want to spend the same amount, getter a high spec / better car with the same money. Either way you will reduce the deprecation losses far beyond any benefits of the cash vs finance deals.

EssexExile said:

The last two times I bought a new car the dealers paid me to take the 0% finance. It seemed rude not to, otherwise I would've paid cash.

The dealer didn't pay you to take 0% finance at all, they either weren't permitted to or didn't want to discount the car for cash purchase because they knew you would still buy it anyway. Hidden in the full price was the cost of finance.

Unfortunately new cars are priced for finance deals and even with 0% finance you are paying over the odds because the interest is already built into the price. So few people buy new cars with cash that there is no incentive in offering a better cash price for a car - so the pricing is inflated to include interest and 0% or low interest rates are advertised.

Sometimes the 0% finance deals are on the cars that don't sell as quickly, bottom spec and top spec models with the middle range models not included - purely to increase sales on those models, but the price has already been adjusted to include the cost of lending.

It is really rare to get a truly 0% finance - who in their right mind would lend money for no profit? Yes there are 0% credit card deals that exist but they prey on the fact that enough customers won't be able to clear the debt at the end of the 0% to be able to make a profit later on down the line.

Nearly new is a terrible idea right now. Better off buying new. Nearly new are at a premium due to availability of new cars and often priced higher than would be to buy new. That’s before we get into the fact that the PCP deals are obviously terrible for second hand with high APR and lower discounts.

+1

Totally agree.

Just for evidence I ordered a new Skoda Kodiaq in Feb. Same car with 5000 miles on popped up on auto trader with £3K on top of new asking price at a silly APR. Imagine paying a premium for second hand. A few years ago people would have laughed.

motorguy

iwb100 said:

motorguy said:

iwb100 said:

[Deleted User] said:

sandy700 said:

I am thinking of buying a brand new car.
I have the money in the bank to pay cash but should I?

Personally I'd say buy 2nd hand / nearly new if you want to save money. Or if you want to spend the same amount, getter a high spec / better car with the same money. Either way you will reduce the deprecation losses far beyond any benefits of the cash vs finance deals.

EssexExile said:

The last two times I bought a new car the dealers paid me to take the 0% finance. It seemed rude not to, otherwise I would've paid cash.

The dealer didn't pay you to take 0% finance at all, they either weren't permitted to or didn't want to discount the car for cash purchase because they knew you would still buy it anyway. Hidden in the full price was the cost of finance.

Unfortunately new cars are priced for finance deals and even with 0% finance you are paying over the odds because the interest is already built into the price. So few people buy new cars with cash that there is no incentive in offering a better cash price for a car - so the pricing is inflated to include interest and 0% or low interest rates are advertised.

Sometimes the 0% finance deals are on the cars that don't sell as quickly, bottom spec and top spec models with the middle range models not included - purely to increase sales on those models, but the price has already been adjusted to include the cost of lending.

It is really rare to get a truly 0% finance - who in their right mind would lend money for no profit? Yes there are 0% credit card deals that exist but they prey on the fact that enough customers won't be able to clear the debt at the end of the 0% to be able to make a profit later on down the line.

Nearly new is a terrible idea right now. Better off buying new. Nearly new are at a premium due to availability of new cars and often priced higher than would be to buy new. That’s before we get into the fact that the PCP deals are obviously terrible for second hand with high APR and lower discounts.

+1

Totally agree.

Just for evidence I ordered a new Skoda Kodiaq in Feb. Same car with 5000 miles on popped up on auto trader with £3K on top of new asking price at a silly APR. Imagine paying a premium for second hand. A few years ago people would have laughed.

Crazy times right now. 

Bigwheels1111

My car is 5.6 year old and was offered £1200 less than I paid for it 👍
But with no fixed time for new cars arrival, plus if the price goes up I need to pay the new price I said no thanks.