Get finance or pay cash for a new car ??

[[TW]Fox]

Taking a cash option on a new car will net you virtually nil.

This is not true. There are still significant discounts to be had even for cash. Numerous brokers will happily put you in touch with dealers that will shave thousands of pounds off the list price regardless of whether you are paying cash or taking finance.

The dealers get kickbacks from finance contracts and get nothing extra from cash sales, apart from the standard commission.

It's true dealers get commission for selling finance products but of course its rubbish to say they get nothing but comission for cash sales, they still get the profit in the car, too, which is why many are happy to do a deal for cash. It probably wont be a lower price than you'd get for finance, so cash is no longer 'king' as it once was, but you can still get a deal.

My current car was (prior to haggling and discounts) £41,000.

And similar haggling and discounts would be available to the cash buyer.

How long would it take someone to save up £41k? Quite some time i'd wager - and by the time they'd saved that, inflation would have set in and that same vehicle (or it's predecessor) would be £50-60k(?), so hence still be unaffordable.

Generally if you've reached the stage in life whereby you are considering a cash purchase on a £40,000 car you've not needed to sit there for years 'saving up' for it specifically, let alone the amount of time it would take for inflation to take a £40k car to a £60k! Thats bonkers.

Almost nobody 'saves up' to pay cash for a car of that value. They pay cash for a car as that value becuase, well, they've got the cash already.

reject the vehicle in the cooling-off period, then offer to pay for full in cash, using the agreed price as their cash sum.

Yea, I'm sure dealer would LOVE you for that and would bend over backwards to do you a good deal in that circumstance.

 

[morfmedia]

http://www.hotukdeals.com/deals/chevrolet-captiva-9k-off-reduced-from-21-295-1781047 and finance the outstanding

Or

http://www.hotukdeals.com/deals/dacia-logan-mcv-estate-car-new-from-only-6995-1781678

 

[RedvGreen]

Generally if you've reached the stage in life whereby you are considering a cash purchase on a £40,000 car you've not needed to sit there for years 'saving up' for it specifically, let alone the amount of time it would take for inflation to take a £40k car to a £60k! Thats bonkers.

Almost nobody 'saves up' to pay cash for a car of that value. They pay cash for a car as that value becuase, well, they've got the cash already.

Yea, I'm sure dealer would LOVE you for that and would bend over backwards to do you a good deal in that circumstance.

It'd be interesting to see the price of vehicles if people only purchased in cash - supply/demand - would prices increase to offset the reduction in the market?

Based on the availability of £40k for a BMW (it is a fairly luxurious marque, but for a person with £40k lying around, they'd be far nicer vehicles to thrown that sum at).

The dealer wants to secure that sale at any and all means. If you've custom ordered/spec'd a vehicle and back out in the cooling-off period, then they have two problems. Firstly they have a bespoke vehicle without an owner and they have the finance hit/loss from the vehicle non-sale. They will be fairly amenable. Never a truer word spoken by a retired Dealer Principal at a social venue last year: (paraphrased) "I leave my heart, conscience and inhibitions at home. Work is purely money and how you get that result, well that is up to the individual."
'Love' as you put it, doesn't factor into this. Neither does any 'friendship' or perceived 'banter'. It is insincere and masked brilliantly, but they care only about the figures, and not about you, or your vehicle (or any other small-talk that goes on).

Seeing similar vehicles on BMWAUC with 0-10miles OTC which are cheaper than list price infers that there is quite a hit in a contract falling through.

 

[PMKeates]

Seeing similar vehicles on BMWAUC with 0-10miles OTC which are cheaper than list price infers that there is quite a hit in a contract falling through.

Do you know what a pre-registration is?

 

[RedvGreen]

Do you know what a pre-registration is?

There's several types - dealership orders (sometimes given to staff to put some miles on), ex-management (ex-head office too) and failed orders (i.e. the ones that I described earlier).

 

[PMKeates]

There's several types - dealership orders (sometimes given to staff to put some miles on), ex-management (ex-head office too) and failed orders (i.e. the ones that I described earlier).

I think you'll find the first type makes up more than a significant proportion!

 

[Edinho]

If I had 6k in the bank personally i'd be buying a micra or something at 1k and keep saving and get something better in 2 years time. By that time you'll come to your senses and realise that there are more important things than cars. If you don't own a house i'd more inclined to be saving for that. But this is a 42 year old duffer speaking. Cars are there to get you from a to b everything else is a luxury.

 

[chaparral]

But this is a 42 year old duffer speaking. Cars are there to get you from a to b everything else is a luxury.

I guess am Lucky with that am only going be 44 at the end of this month..

 

[chaparral]

If I had 6k in the bank personally i'd be buying a micra or something at 1k and keep saving and get something better in 2 years time. By that time you'll come to your senses and realise that there are more important things than cars..

I feel ashamed to only have 6k in saving after working for over 25 years and not much else to show for it...

 

[Skeeter]

What's wrong with buying a car that you can afford ?



An even bizarrer response despite your well known market acumen. Really disappointed in you Fox - I expected better.

Please explain how a car's value does not depreciate along with not having to pay interest..... I need to understand the 'market' you're speaking of.

The only case for HP that I can see is for business use where those costs can be accounted for.

Do cars you buy with cash not depreciate? And do you not lose the opportunity to earn interest on that cash had you not spent it on car?

 

[Apatche64]

For that amount maybe 0% credit cards might be the way to go, pay off over 2 years and still have capital. cheaper than finance too

 

[ironman]

Do cars you buy with cash not depreciate? And do you not lose the opportunity to earn interest on that cash had you not spent it on car?

That's not exactly the best justification for the use of finance, since the cost of borrowing is higher than the interest earned on that capital.