Purchasing new car - help

jasonhenley

Hi
Looking to replace my car, and the last time I purchased a car was over 10 years ago. 

Looking at new or ex demo. 

But, when I last purchase a car, cash (no finance) was king. These days doesn’t seem so, and I don’t really want a monthly payment. 

Any tips at all? 

For example, one garage has quoted me £40k for car cash. But PCP comes out at £36k

TIA

Dave_5150

jasonhenley said:

Hi
Looking to replace my car, and the last time I purchased a car was over 10 years ago. 

Looking at new or ex demo. 

But, when I last purchase a car, cash (no finance) was king. These days doesn’t seem so, and I don’t really want a monthly payment. 

Any tips at all? 

For example, one garage has quoted me £40k for car cash. But PCP comes out at £36k

TIA

Buy it on PCP to get the better price and immediately clear the finance.

Car_54

Dave_5150 said:

jasonhenley said:

Hi
Looking to replace my car, and the last time I purchased a car was over 10 years ago. 

Looking at new or ex demo. 

But, when I last purchase a car, cash (no finance) was king. These days doesn’t seem so, and I don’t really want a monthly payment. 

Any tips at all? 

For example, one garage has quoted me £40k for car cash. But PCP comes out at £36k

TIA

Buy it on PCP to get the better price and immediately clear the finance.

Agreed. I’ve done that successfully a few times. Most recently this year - £1,750 “contribution” from manufacturer.

Goudy

You can clear any personal loan/finance at any time and the consumer credit act states the lender can only charge you a set amount of interest.
For a large loan like this it's 56 days interest.

This means you can arrange to buy a car on finance with whatever discount might come with taking the finance.
Then settle the finance with the loan provider once you collect the car.
The settlement figure will only include the amount borrowed and 56 days interest.
This means you still keep nearly all of the discount.

There was a time when you could agree to the finance, back out of that and agree to pay cash instead but still keep the discount, but they've all wised up to that and you will more than likely be presented with a new invoice to pay without the discount. 

With PCP you can actually manipulate this 56 days interest a little.
If you effectively borrow less for least time, you pay less interest.

As you are settling so early you aren't worried about deposit so you are in a position to pay the maximum.
Again, you aren't worried about the size of the monthly payments so don't need to arrange the deal over 36 or 48 months.

So putting up the maximum deposit over the shortest loan period means the total interest payable will less, which naturally means 56 days worth of interest will be a lower amount.

For example if you stumped up the maximum deposit (often around 25% on a PCP) for 12 months this means you would pay less interest than stumping up 10% deposit and making 48 months payment.
56 days of the first scenario is a lot less and 56 days of the second scenario.

There is nothing wrong with doing this, lots of people do it.
I've done it a few times now.

You might also be entitled to some better discounts depending on your profession.
NHS staff, Teachers, Police, Fire and so on are often able to tap into better discount rates.
Also membership of some organisations qualify, but it depends on the manufacturer.

On a similar note, your discounted £36k car will still be invoiced as a £40k (just with a contribution of £4k) and would qualify it for the luxury car tax.
It won't be invoiced as a £36k car.

DullGreyGuy

jasonhenley said:

Hi
Looking to replace my car, and the last time I purchased a car was over 10 years ago. 

Looking at new or ex demo. 

But, when I last purchase a car, cash (no finance) was king. These days doesn’t seem so, and I don’t really want a monthly payment. 

Any tips at all? 

For example, one garage has quoted me £40k for car cash. But PCP comes out at £36k

TIA

Bought my first new car in 1996 as a teenager, my mother asked what the cash discount was as "cash is king" and the dealer laughed saying it hadn't been king for a very long time and it'd be an extra £600 for cash. If it was only 10 years ago then cash certainly wasnt king back then. 

As long as its purchase finance like PCP you can take the discount for credit and early settle the agreement. 

Ectophile

I bought an ex-demo car last november.  They offered me a modest discount, and I paid the deposit by credit card and the remainder by debit card.

No dealer wants actual cash these days - it's too much work.

They didn't want my old car, and only offered a few hundred for it (while being apologetic about that).  So I took it to a local used car dealer instead, and got twice as much.  I probably should have asked for more, but the guy who bought it from me needs to earn a living.

bluelad1927

Not regarding finance but connected to the purchase. What is the list price of the car(not what you are paying for it). If over 40k you will  be greeted with the higher rate car tax which is ridiculously expensive for the current average car price

Bigwheels1111

My friend got financed on his Mercedes, the day they delivered it, he signed for the car.
Walked inside and called the finance company to pay it off under the 14 cooling off period.
He paid not interest or charges of any kind.

Just got my Mum a deal on a Citroen C3 Max.
£22,600 with metallic paint.
Got quotes from online brokers and offers from Autotrader.
Used these prices when negotiating, all over the phone.
Did the deal with a dealer 80 miles away, including delivery on a trailer.
£19,500 for cash.