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I don't particularly want to finance a car but I've heard dealers are more open to moving on price if you do that. Some people suggest doing that and then paying the finance off straight away. Has anyone tried this? Did it work?
It depends a lot on the details of the finance deal terms. Some are just a loan, others have early redemption clauses, some are more like hiring the car until the final payment when suddenly you own it. To many variables to say unfortunately
Just ask the salesperson*! There may be some penalty or clauses in the contract which determine when the garage/salesperson do/do not get their bonus but that's gonna depend on many factors.
* Or more likely the business development manager for larger retailers.
We took a loan and repaid within the 14 day cooling off period, but that was March ‘22 when prices were crazy. Think we got a boot liner and floor mats out of it. So hee haw really
Compare to today when I’m getting adverts for 0% finance and cars in stock to drive away today; It looks like the car market is on its arse. I suspect there are home good deal to be had if you’re a good haggler.
Btw I'm talking about used cars here.
Just ask the salesperson!
Doesn't that involve letting on that I'm not really taking the loan though?
Did it with my VAG group, got two years servicing out of it. Paid off within the 14 day cooling off period.
i did that. been a while since I did but there was more commission on them sellin their finance that selling the car. Also bought at period end when commission is calculated. Told them "my own finance would take 5 days" Period end shut in 3. So agreed to take theirs if they gave me an extra £500 off and refurb'd the alloys which they did. it was actually the sales guy that offered that deal and suggested the cancellation!!!
Just be careful about cancelling. they made it painful and they got very semantic over words. You need to CANCEL under the cooling off period. Not "I'D LIKE TO PAY OFF". Paying off they tried to lump in the interest and additional charges for paying early. Cancelling was sjust the purchase price.
The salesman does not work for the finance company and will get their kick back regardless. Ask them and they will probably tell you
Agreed. Also, you can tell them you are considering all sorts of different options to purchase so you want to know implications in case your situation changes. If necessary, tell them you're also negotiating with another seller/garage that will allow this and ask whether they can compete...
Agreed. Also, you can tell them you are considering all sorts of different options to purchase so you want to know implications in case your situation changes. If necessary, tell them you’re also negotiating with another seller/garage that will allow this and ask whether they can compete…
Yeah..Or, you tell them you want to take the finance papers home to look at the terms and conditions properly and you'll get back to them within 24hrs... perfectly reasonable & avoids any potential awkwardness that way and means you don't have to sign on the spot.
Been there done that, got to keep a couple of grand of "deposit contribution" - new car.
Pretty sure that the 14 day cooling off period is a law thing and they can't argue with it.
Any decent salesperson should tell you the options if you ask.
I know one of my last supervisors bought an Audi, and was upfront with the salesman about having the cash to buy outright.
Salesman ran the figures, and I think he ended up with a HP agreement, with a fairly large 'deposit', with a few year repayment at minimal interest, so the supervisor just stuck the extra money in a savings account that paid more interest than the finance.
rule #1 when buying a car: the product isn’t the car, it’s all the stuff around the side.
Youngest brother in law was a car salesman for many, many years. Doing what you’re suggesting is common place and benefits both parties. You’re more likely to get a kickback if you take finance and they’re gonna make their commission, which is almost entirely based on the sale of finance, service plans, accessories and snake oil paint protection junk. <br /><br />Commission on the car will be of the order of £20. Dealer profit on the car itself is truly shocking Fiat averaged £150, mate who works for merc suggests it’s £300 at the very most.
Whilst I’m sure they really want you to buy rubbish with The car I thought used car mark up was 15%
Did it 3 years ago with VAG on my mother's Polo. Got a £2,500 deposit contribution which was linked taking their finance then paid it off immediately.
The sales person was very open and had no issues with us doing it. It wasn't his money and he got his commission either way.
Just be careful about cancelling. they made it painful and they got very semantic over words. You need to CANCEL under the cooling off period. Not “I’D LIKE TO PAY OFF”. Paying off they tried to lump in the interest and additional charges for paying early. Cancelling was sjust the purchase price.
Thanks, that's very useful to know. So you phone Finance Company Ltd and say you'd like to cancel, and then what - they say you have to give them £15k or whatever, you hang up, do a bank transfer, and then wait for the email confirmation?
So is the dealer essentially selling the car to Finance Company Ltd, who then own the car until you settle up, one way or another?
Sorry for all these noobish questions. This is all an absolute different world to me! And I am not at all au fait with sending large wedges of cash around...
Pretty sure that the 14 day cooling off period is a law thing and they can’t argue with it.
That's right, if the loan is covered by the consumer credit act. The loan agreement should state whether it is or not and give details of how to cancel.
I’ve done it twice. First time we saved a £1,000 on the car as they offered a better deal on the car with finance. Can’t remember the details on the second. We were quite open with the salesman and they had no problem with it, they just want a sale.
I thought it was 30 days cooling off, but I might have remembered that wrong.
Yes done it twice, latest was my Nissan Qashqai, £2200 deposit contribution when taking the PCP.
Did all the paperwork, 3 days latter went online to obtain a final settlement and transferred the money.
Got charged a months interest, if you do this ensure you just pay it off and not cancel the agreement, if you do they want the contribution paid to the dealer.
As a cash buyer you usually get a worse deal if they have an offer on the PCP.
Use Carwow to find the best deal for cash and PCP.
if you do this ensure you just pay it off and not cancel the agreement, if you do they want the contribution paid to the dealer.
which contradicts this from earlier doesn’t it?
Just be careful about cancelling. they made it painful and they got very semantic over words. You need to CANCEL under the cooling off period. Not “I’D LIKE TO PAY OFF”. Paying off they tried to lump in the interest and additional charges for paying early. Cancelling was sjust the purchase price.
Yes it does, for example here is the wording from my contract which I why I paid the months interest, cancel and you are withdrawing from the agreement and the deposit contribution.
I have done it theee times without any problem. Dealers were Ford, Kia and JLR. Everytime paid off within a few days on getting all the paperwork confirmed. The most recent was JLR and I think with them I just settled the finance online, I didn’t even need to speak to anyone about it.
from my recollection, legally they can’t impose a financial penalty if you cancel the contract and pay the owing balance. They can charge interest owing to the date of settlement, but can’t add on any other charges.
Bought a car on HP many years ago, with the express intention of paying it off early to save myself some interest - which I explained clearly to the salesman.
When I went to pay it off and asked how much we'd "save" by doing so, I was told "nothing". The settlement figure was exactly the same as the total of the outstanding payments, So we paid it off in installments.
I'm sure it was in the small print, and I was young at the time . . .