Buying approved car without finance

Jet

The last car I bought was 8 years ago and through cazoo. No haggling and I found it a really positive experience.

I’m now in the market for a new car and looking at approved cars from main dealerships.

I have seen a couple I might be interested in and the dealers will not budge on price. They offer me something towards the finance if I finance it but otherwise nothing.

Is this normal practice nowadays or are they just trying it on?

Ayr_Rage

Finance commission makes up a lot of their income these days and discounts for cash, especially on new vehicles, is not widely available.

You can try to haggle but be prepared to walk away if it seems overpriced.

born_again

Take the finance & pay it off straight away.

Goudy

It's a cut throat world when it comes to advertised car prices. They tend to have to price them keenly to match other sellers as they are all very searchable these days via the internet.

This means there's little movement in the screen prices but there are often other incentives daggled in front of customers.

One of these is deposit contributions on finance. The finance company will offer a chunk towards the deposit which brings the amount to be financed down though you'll pay interest on the rest. How much depends on what you do next.

You can take the finance and the deposit contribution, then settle the finance within the first month. By law (Consumer Credit Act) the finance company can only charge you 56 days interest on the outstanding capital on a finance package this size, so if that deposit contribution is larger than the 56 days interest (which it usually is), you're quids in.

You won't be the first to do this, it's a tried and tested method to gain the contribution (money off) and if you are in a position to pay cash, settle the finance within the first month.

You can manipulate the 56 days interest a little as well. If you put down the biggest deposit the finance deal will allow, that effects the capital borrowed, so effects the 56 days interest chargeable and make the process a little sweeter.

It worth noting there is a difference between settling finance and cancelling it. You are within your rights to cancel finance within the first 14 days "cooling off" period. Some have cancelled the finance within the 14 days and kept the deposit contribution, others have been invoiced the full amount without the deposit contribution, it seems the finance companies are wising up. If you settle after those 14 days, you WILL keep the deposit contribution.

Ectophile

Is this normal practice nowadays or are they just trying it on?

Yes. Though the last time I bought a used car, the dealer did knock a little bit off.

Back in the olden days, dealers would add a mark up on every used car they sold, so that the customer could haggle them down again. The dealer would get the amount they thought the car was worth and the customer got a discount. Everyone was happy.

But these days, all the customers hit Autotrader before going out to look for cars. Autotrader has a little indicator next to each advert to say if it's a good price, or overpriced. Dealers know that if a car is overpriced, nobody will even come to look at it. So the price in the advert is the price they want to sell it at.

giraffe69

As said above buy it on finance and then pay it off straight away. I've bought my last 3 cars that way. A contribution is made making it cheaper than a cash purchase and I ask for a settlement figure shortly thereafter. You will likely incure a modest interest payment but still be quids in 😁

Frozen_up_north

The dealers will have sold their allocation of new cars this month (new Sept reg), so they are not feeling the hunger pangs, sometimes at the end of the month they are desperate to shift cars, both new and used. I had £4K knocked off a new £32K car at the end of November 2024 and that was a "cash" sale and didn't involve haggling. Beware they are prone to throw in "free" items, and then add them to the bill… maybe not so much on a used car as with a new one.