Can I really save £2K by taking out car finance & cancelling tomorrow?

FrankFalcon

Hi all

I am buying a brand new car from a dealership if a well known, huge European Car Brand. Basically, I was going to buy a car year old for over £50K. The dealer man said to me “You can have this brand spanking new one for the same price if you take out the finance”. I said “I don’t want finance. I want to pay cash”. Dealer says “It’s fine. You just take the finance out on Monday. Drive the car away. Cancel finance within 14 days. Job done”. 

Surely this is too good to be true. Am I missing something here? Surely the finance houses are on to this?

thanks all. 

Wyndham

I'd advise you to read the small print. Carefully!

CliveOfIndia

Yes, read the small print VERY carefully.

It's not totally impossible - the dealer will receive a commission for selling you the finance package, so he can afford to give you a decent discount on the price of the new car and still be up on the deal overall.  But you need to check very carefully for any clauses buried in the depths of the small print that might catch you out.

fatbelly

It's believable.

If you look at the 'special offers' on Drive The Deal or similar they often show savings of e.g. £11000 contingent on taking PCP finance that gives a deposit contribution of £6000

You can usually but a cut-price service package at the same time

Eldi_Dos

fatbelly said:

It's believable.

If you look at the 'special offers' on Drive The Deal or similar they often show savings of e.g. £11000 contingent on taking PCP finance that gives a deposit contribution of £6000

You can usually but a cut-price service package at the same time

I think this whole system stinks, the artificial prices quoted for the cars so they can offer a discount to make the APR on the PCP deals lower leads to a inflated and not true representation of the BIK value of the car. This in turn leads to many, the potential fiqure is quite a eyeopener, paying tax on a inflated BIK.

I am surprised one of the consumer protection groups has not picked up on this.

Grumpy_chap

FrankFalcon said:

Hi all

I am buying a brand new car from a dealership if a well known, huge European Car Brand. Basically, I was going to buy a car year old for over £50K. The dealer man said to me “You can have this brand spanking new one for the same price if you take out the finance”. I said “I don’t want finance. I want to pay cash”. Dealer says “It’s fine. You just take the finance out on Monday. Drive the car away. Cancel finance within 14 days. Job done”. 

Surely this is too good to be true. Am I missing something here? Surely the finance houses are on to this?

thanks all. 

Is this because buying the car on finance comes with an incentive from the manufacturer (deposit contribution) that can be secured if the finance is taken.  Once the finance is in place, you can contact the credit provider and request a settlement figure and clear the finance down.  That avoids the interest but retains the incentive.

A bit like this thread:
https://forums.moneysavingexpert.com/discussion/comment/81726017#Comment_81726017

There has been some comment in previous similar threads about cancelling the finance and retaining the incentive or needing to take the finance and settle early.  In practice the two may amount to much the same thing, but technicalities on terminology can be important.