I'm looking for a used car at the moment and naturally every dealership asks if I need finance to buy the car. I have the cash for this purchase.
Is it possible to take out the finance and then pay off the debt in full the next day?
Obviously I would still have the hit of a hard credit check and a few pennies of interest, but taking the finance should help when haggling the price with the dealer.
Is this not possible, or are there often early repayment penalties to pay?
Is it possible to take out the finance and then pay off the debt in full the next day?
Obviously I would still have the hit of a hard credit check and a few pennies of interest, but taking the finance should help when haggling the price with the dealer.
Is this not possible, or are there often early repayment penalties to pay?
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sorted byMost likely because their are additional discounts available from the manufacturer or dealer if you take the finance package.
The answer to the question for most controlled finance on cars is yes, but check the small print.
Every new car I wanted to buy up-front with cash was at least £1k cheaper under finance as the manufacturer deposit contributions only applied in that case.
My mate ordered his Mercedes and took out finance.
I think he got about £1500 off.
The day it was delivered he paid it off, no fees or interest.
14 day cooling off period
Why would they do a deal for cash? They have all sorts of extra hassle and costs to process cash.
Finance/pcp gives them a chance to tie you into an ongoing long term relationship and they - both dealer and salesman - make more.
When we got our last car I said to every dealer how much for cash, they wouldn’t take a penny off, but talk finance even telling the dealer you would pay it off the next day and they wanted to do a deal. Having to pay screen price just didn’t sit right.
That's what I wanted to do
However I've had a few dealerships now ghost me once they know I don't want a finance package.
It also means I still get s75 protection even if the dealership doesn't accept credit cards for even 1p of the purchase price.
You may find you only need to take out £2500 over two years to still get the deposit contribution and other discounts. Can then either pay it off straight away for minimal penalties or just pay it over 2 years for a couple hundred in interest.
Car dealers hate cash. Offering a dealer cash will absolutely not get you a better deal. Every one of the used car dealers we spoke to for this feature said rather than give you a better deal for cash they’d be more inclined to avoid it.
Used car dealer Noacross said: ‘Cash is not a help to us, neither is no PX or no finance deal, so it won’t secure a better deal.’
Why do they hate it? Car dealers have to make checks as to where money comes from and provide an audit trail. What’s more, most banks these days charge business customers to deposit cash."
cardealermagazine.co.uk/pub…073
I've only ever bought one car brand new, rest have been second hand. I bought that brand new one outright, they just told me to use my debit card, there was no incentive to go and draw money out, and that was back in 2009. Even getting serious sums of cash out of a bank usually entails quite a few questions from the bank. (edited)
Can't remember the details but legally all finance agreement can be settled at any point with paying interest on the time its taken out
Ford do 0% finance (PCP) so even if you had the cash you’d be an idiot to pay cash with the discounts for finance and the fact you can earn interest on your cash over that period.
Usually because dealers will give you a better offer if you take their finance. As they will get commission.
But should be okay. Just say am I allowed to over pay a little. See what they say (edited)
I was at VW the other day looking at a car for £25k I said could you do a deal for cash, he said nope!
I *think* that there is a difference between paying the finance off and withdrawing under the 14 day cooling off - technically if you use the cooling off period then the manufacturer/dealer contribution may be lost (ie you have to repay it). I would always read the paperwork carefully.
I've bought VAG cars and paid off the finance straight away - asking for settlement value and paying it, not withdrawing from the finance.
Understood, did you ever find the settlement price was more than the price paid for the car (after any deposit contribution)?
It just seems to me that every cash buyer should do this as it clearly helps with haggling, so I'm expecting some sort of Early Repayment Charge to ensure the finance company doesn't make a loss on you. (edited)
Yeah thats the way I've always seen it, cash is king... but with the way cars are at the moment price wise, they might not want to budge at all! I'm I'm no rush, I know what cars are worth and have a little run around to use until something pops up.
Make sure you pay in full within the cooling off period to avoid any early repayment charges and you're good to go
Think they did something to avoid vat, hence the discount for paying in physical cash
I know they don't like cash cash, I took £16k to buy an Audi S3 about 8 years ago from Audi and they wouldn't sell me it saying its to much cash and something to do with money laundering.
It might have all changed now though, hence them saying no to cash deals unless I just got them on a bad day (edited)
Finance earns them more cash, they will offset the money they get let's say they will earn 2k out of finance on the purchase price you may get a discount of 25% of what they earn so will drop the price 500 quid, figures are just a guesstimate
If the finance is not front loaded and has a final figure that must be paid or there is a max you can pay off per one time or per month shouldn't be any reason not to be able to pay it off.
Nope. just paid the interest for the few days that the credit was outstanding.
Always read the docs though.
That's exactly what I was hoping
A woman I work with her husband got £10k or £20k knocked off his McLaren 720s because he paid cash. So clearly dealers out there like cash sales.
Probably depends on what commission they get from whoever provides their finance I guess? That presumably varies by dealer and purchase price.
I'll certainly ask if cash is king for them, but after I've already shown interest in finance (see earlier comment). (edited)
It's crazy isn't it!
The world has gone mad.
I don't understand, do you mean the interest accrued up to the date I settle? (edited)