Finance or cash?

[Cred1982]

Hello all,

Just a quick question on my upcoming purchase.

A bit of background:

I am after a 997 C2S Cab (ideally with OPC Warranty/ FPSH) and have seen a few around that I'm interested in. I am looking to spend £35k ish for it which from some research seems about right although most of the ones I'm keen on are looking for c £37k to £40k.

So, will the fact that I'm cash help me negotiate and if so why? I have an image of salesmen telling me they make more money out of the financing deals etc with interest.

Where do I really stand?!?!?

Thanks in advance.

[Stu R]

Depends what works best to you. Cash isn't really that big of an advantage to a dealer, it's a pain in the arse for them according to mates in the industry. Finance, well they'll probably make more from it, they certainly won't be making any extra from cash sales. Only time I can see it being useful is in negotiating on something that they're desperate to shift anyway.

[Cred1982]

Stu R said:

Depends what works best to you. Cash isn't really that big of an advantage to a dealer, it's a pain in the arse for them according to mates in the industry. Finance, well they'll probably make more from it, they certainly won't be making any extra from cash sales. Only time I can see it being useful is in negotiating on something that they're desperate to shift anyway.

Well that's disappointing

[Nano2nd]

when you say cash you mean Debit card right? your not seriously thinking of walking into an OPC with £35k's worth of twenty pound notes surely?

[Cred1982]

Nano2nd said:

when you say cash you mean Debit card right? your not seriously thinking of walking into an OPC with £35k's worth of twenty pound notes surely?

Yes debit card - not briefcase full of fivers (however cool that would be).

[Magic919]

Just try to negotiate the best deal with the OPC if you don't care which payment method you use.

[Zp]

I've been told before that any salesman can't do you a better deal just because you're taking the finance option?

When I bought my Exige the deal was the same wether it was cash, finance from them or finance from A N Other.

[Actus Reus]

If you took out finance you could pay it all off immediately anyway couldn't you? Don't new FSA regs mean that you have to be able to settle it within a fortnight if you so wish with no (or minimal) penalty.

[Helicopter123]

Actus Reus said:

If you took out finance you could pay it all off immediately anyway couldn't you? Don't new FSA regs mean that you have to be able to settle it within a fortnight if you so wish with no (or minimal) penalty.

I think you get 30 days?

[anonymous-user]

I would be surprised if your main tool for negotiating is mode of payment. The real leverage is knowing that his commission might go somewhere if a similar car can be had at another dealer for less? Only at that point does the dealer have any legit reason to reconsider their margin right?

[Rockster]

Cred1982 said:

Hello all,

Just a quick question on my upcoming purchase.

A bit of background:

I am after a 997 C2S Cab (ideally with OPC Warranty/ FPSH) and have seen a few around that I'm interested in. I am looking to spend £35k ish for it which from some research seems about right although most of the ones I'm keen on are looking for c £37k to £40k.

So, will the fact that I'm cash help me negotiate and if so why? I have an image of salesmen telling me they make more money out of the financing deals etc with interest.

Where do I really stand?!?!?

Thanks in advance.

Your best chance of buying the car at market value is to do your research and determine what the market is for these cars and use this knowledge to drive your best deal.

How you pay for the car shouldn't matter. If you want to pay cash pay cash.

If you want to finance you have another task before you buy and that is to determine what the finacing market is. You are not only buying a car then but you are in effect buying money and you want to know the market for borrowing/buying money as well as you know the market for the cars.

Now some advise feigning being a finance buyer in the belief the seller might cut you a bit of a better deal on the price with the idea of making it up on the finance side, then once you have the 'finance' price pull a fast one and pay cash.

However, chances are if this were the case, if the seller really was cutting the price with the idea of making it upon the finance side, the minute you offered cash the seller would find a reason to back out of the deal for any number of reasons.

Sincerely,

Rockster.

[mollytherocker]

Zp said:

I've been told before that any salesman can't do you a better deal just because you're taking the finance option?

When I bought my Exige the deal was the same wether it was cash, finance from them or finance from A N Other.

And so how did you fund it?

MTR

[crystalmethod]

Actus Reus said:

If you took out finance you could pay it all off immediately anyway couldn't you? Don't new FSA regs mean that you have to be able to settle it within a fortnight if you so wish with no (or minimal) penalty.

Does that mean that one could take out finance if a lower purchase price was
offered for the car vs cash, then cancel the finance during the 30 day period, and hand over cash as the dealer probably wouldn't want the car back?

I can't see this happening in reality but is it possible?

[Cred1982]

Thank you all, this all helps a lot.

[Peely]

crystalmethod said:

Actus Reus said:

If you took out finance you could pay it all off immediately anyway couldn't you? Don't new FSA regs mean that you have to be able to settle it within a fortnight if you so wish with no (or minimal) penalty.

Does that mean that one could take out finance if a lower purchase price was
offered for the car vs cash, then cancel the finance during the 30 day period, and hand over cash as the dealer probably wouldn't want the car back?

I can't see this happening in reality but is it possible?

I'm fairly sure that the dealer would get his commission on the finance anyway, but the lender may have a built in fee for settling early to cover this.

[Actus Reus]

I think you can opt out of finance early (as I said, I thought a fortnight, maybe 30 days), and pay only an admin fee and interest to date. So yes - agree finance today, settle it on Monday and pay minimal amount for the finance. Of course this is only worth considering if you get a much better deal by taking finance. And please, for all that's Holy, check I'm right before embarking on this path!

[Cred1982]

Actus Reus said:

I think you can opt out of finance early (as I said, I thought a fortnight, maybe 30 days), and pay only an admin fee and interest to date. So yes - agree finance today, settle it on Monday and pay minimal amount for the finance. Of course this is only worth considering if you get a much better deal by taking finance. And please, for all that's Holy, check I'm right before embarking on this path!

Will do!

[SteveM46]

OPC was clear to me that they are not allowed to differentiate between a cash buyer and a finance buyer when it comes to agreeing a price.

OPC finance (maybe any normal car finance) is very expensive compared with the sort of deals you can get on the high street if you've got a good credit history. I got £15k at 6.6% from Nationwide, while the OPC wanted more like 11%.

I would go with a cheaper high street loan and walk in with the cash.

[Wills2]

All sales are cash sales to a dealer whether you finance or not, he still gets cash. (assuming no px involved)

So there isn't any incentive for them to offer a better deal based upon your payment method, unless they dig into the finance commission?

[anonymous-user]

Wills2 said:

All sales are cash sales to a dealer whether you finance or not, he still gets cash. (assuming no px involved)

So there isn't any incentive for them to offer a better deal based upon your payment method, unless they dig into the finance commission?

I'm no expert on this, but I always presumed they did plenty of digging!