Buying a car with finance and settling straight away
Discussion
wevster said:
Just been looking at a new car for the wife, the dealer suggests if we take out the finance and then settle straight away he can knock some money off.
Has anyone had any experience of doing this?
I think I can remember seeing a thread on it but I can't find it now.
Just check all the prices, such as the cost to clear the finance as there will likely be an admin charge at the very least and likely a penalty fee of some kind.Has anyone had any experience of doing this?
I think I can remember seeing a thread on it but I can't find it now.
The dealer likely wants you to do this for some bonus incentive or target of some kind or just more commission. No probs if this is the case, just make sure you are getting a worthwhile deal too.
MissChief said:
But then the cost to settle stands a chance of actually being higher than the cost of the car?
This.. Why bother? If you have cash, negotiate a better deal that you're happy with or go and find a car elsewhere.. when you have money you're in a better position that those that have to rely on obtaining credit.
I'm pretty sure it is illegal for a dealer to preferenciate between cash and finance although this doesn't stop some from doing it.
The salesman is not looking at the bigger picture.. Yes he will get paid on the finance income however if the customer settles early the money the dealer makes on the finance would generally be clawed back anyway..
The salesman is not looking at the bigger picture.. Yes he will get paid on the finance income however if the customer settles early the money the dealer makes on the finance would generally be clawed back anyway..
Lee540 said:
MissChief said:
But then the cost to settle stands a chance of actually being higher than the cost of the car?
This.. Why bother? If you have cash, negotiate a better deal that you're happy with or go and find a car elsewhere.. when you have money you're in a better position that those that have to rely on obtaining credit.
I would be surprised if you can settle finance quickly and cheaply enough to make the 'extra' discount from the salesman worthwhile.
What about paying by credit card, collect lots of reward points then settle balance with with cash on your next statement?
I did this a couple of years ago on an E92 M3. I hammered a deal out after hours! I wasn't budging on my budget, and showed the salesman two ads in London (I live in Glasgow), and told him I had no quams about flying down and driving up for the saving. He clearly stated that he couldn't discount the car any more, but if I took finance for the difference between our figures, his commision would allow him to give me my deal. I paid off the finance 2 days later, with an admin fee of, IIRC, £130. This was still a good bit less than I saved so was good for me.
The only problem was that I had BMW Finance chasing me to buy a new car, as it obviously just popped up that my finance deal had "came to an end", but not after the initial 2 year agreement period! Lol.
The only problem was that I had BMW Finance chasing me to buy a new car, as it obviously just popped up that my finance deal had "came to an end", but not after the initial 2 year agreement period! Lol.
This does make sense for certain deals. For example Citroen were offering £1k off certain DS3s if you took out their finance, regardless of what deal you worked out with the dealer. At worst you had to pay one months interest/admin fee before paying off the balance with no penalty.
Lets be honest, how many people buy new cars with cash? Very very few, so very few people would actually do this anyway.
Lets be honest, how many people buy new cars with cash? Very very few, so very few people would actually do this anyway.
Edited by Pugland53 on Wednesday 13th February 15:40
Edited by Pugland53 on Wednesday 13th February 15:49
Snowboy said:
I'm pretty sure a dealer can only put £3k on a credit card.
And only about the same in cash.
The rest must be debit.
It's a money laundering thing.
I'm sure someone will be alobg soon with the exact details.
I'm not sure about this. My mate bought a £7k motorbike with his credit card. Plastic is plastic I think, it's only large sums of cash that are suspect. ??And only about the same in cash.
The rest must be debit.
It's a money laundering thing.
I'm sure someone will be alobg soon with the exact details.
rash_decision said:
Snowboy said:
I'm pretty sure a dealer can only put £3k on a credit card.
And only about the same in cash.
The rest must be debit.
It's a money laundering thing.
I'm sure someone will be alobg soon with the exact details.
I'm not sure about this. My mate bought a £7k motorbike with his credit card. Plastic is plastic I think, it's only large sums of cash that are suspect. ??And only about the same in cash.
The rest must be debit.
It's a money laundering thing.
I'm sure someone will be alobg soon with the exact details.
rash_decision said:
Snowboy said:
I'm pretty sure a dealer can only put £3k on a credit card.
And only about the same in cash.
The rest must be debit.
It's a money laundering thing.
I'm sure someone will be alobg soon with the exact details.
I'm not sure about this. My mate bought a £7k motorbike with his credit card. Plastic is plastic I think, it's only large sums of cash that are suspect. ??And only about the same in cash.
The rest must be debit.
It's a money laundering thing.
I'm sure someone will be alobg soon with the exact details.
Vron said:
rash_decision said:
Snowboy said:
I'm pretty sure a dealer can only put £3k on a credit card.
And only about the same in cash.
The rest must be debit.
It's a money laundering thing.
I'm sure someone will be alobg soon with the exact details.
I'm not sure about this. My mate bought a £7k motorbike with his credit card. Plastic is plastic I think, it's only large sums of cash that are suspect. ??And only about the same in cash.
The rest must be debit.
It's a money laundering thing.
I'm sure someone will be alobg soon with the exact details.
There is no limit to how much cash you can take. If you want/need to regularly take large amounts you just register as being a high worth dealer.
Debit card is no limit and no charge.
Vron said:
rash_decision said:
Snowboy said:
I'm pretty sure a dealer can only put £3k on a credit card.
And only about the same in cash.
The rest must be debit.
It's a money laundering thing.
I'm sure someone will be alobg soon with the exact details.
I'm not sure about this. My mate bought a £7k motorbike with his credit card. Plastic is plastic I think, it's only large sums of cash that are suspect. ??And only about the same in cash.
The rest must be debit.
It's a money laundering thing.
I'm sure someone will be alobg soon with the exact details.
wevster said:
Just been looking at a new car for the wife, the dealer suggests if we take out the finance and then settle straight away he can knock some money off.
Has anyone had any experience of doing this?
I think I can remember seeing a thread on it but I can't find it now.
Seems a bit odd - all the finance companies out there will debit back any commission paid on the deal (usually if settled within 6 months, that's certainly the case with the companies we deal with); so I can't see any benefit to them to offer this. Unless they have some form of 'no debit back' agreement with their funder. Additionally, under the latest consumer credit act regulations, you can payoff the finance in full within 14 days and just pay the daily interest accrued.Has anyone had any experience of doing this?
I think I can remember seeing a thread on it but I can't find it now.
So frankly, if it gives you a decent enough discount, and you have the funds to pay the finance off straight away, then I can't see the harm in that. You're not losing out at all (however, I would check which finance company they're putting you with.)
rfoster said:
wevster said:
Just been looking at a new car for the wife, the dealer suggests if we take out the finance and then settle straight away he can knock some money off.
Has anyone had any experience of doing this?
I think I can remember seeing a thread on it but I can't find it now.
Seems a bit odd - all the finance companies out there will debit back any commission paid on the deal (usually if settled within 6 months, that's certainly the case with the companies we deal with); so I can't see any benefit to them to offer this. Unless they have some form of 'no debit back' agreement with their funder. Additionally, under the latest consumer credit act regulations, you can payoff the finance in full within 14 days and just pay the daily interest accrued.Has anyone had any experience of doing this?
I think I can remember seeing a thread on it but I can't find it now.
So frankly, if it gives you a decent enough discount, and you have the funds to pay the finance off straight away, then I can't see the harm in that. You're not losing out at all (however, I would check which finance company they're putting you with.)
It's called "Deposit Allowance" (for Fords anyway, other dealers probably have other names for it).
It is a contribution by Ford Finance (in the case of Ford) for buying one of their cars and it is completely independent of the dealer and his margins, so there is no way to access it other than by taking out the finance.
So basically, whatever discount you can thrash out with the dealer, even if he gives away his entire margin, you can still get the "Deposit Allowance" on top if it's offered on the model you're buying (it's not on all models).
Basically, buy your Focus, take out Ford Finance and they'll put an amount (£1,500 or whatever it is now) in which comes off the balance.
You need to finance at least £2,500 over at least 2 years, and you get £1,500 off the agreed deal.
There is nothing to stop you simply paying back the £2,500 loan once you've taken delivery. But even if you don't, the interest is less than £200 from memory.
I think it's a way of Ford offering bigger discounts to flog cars without looking like they're knocking thousands off, but whatever, it works and you'd be mad not to take it.
It is a contribution by Ford Finance (in the case of Ford) for buying one of their cars and it is completely independent of the dealer and his margins, so there is no way to access it other than by taking out the finance.
So basically, whatever discount you can thrash out with the dealer, even if he gives away his entire margin, you can still get the "Deposit Allowance" on top if it's offered on the model you're buying (it's not on all models).
Basically, buy your Focus, take out Ford Finance and they'll put an amount (£1,500 or whatever it is now) in which comes off the balance.
You need to finance at least £2,500 over at least 2 years, and you get £1,500 off the agreed deal.
There is nothing to stop you simply paying back the £2,500 loan once you've taken delivery. But even if you don't, the interest is less than £200 from memory.
I think it's a way of Ford offering bigger discounts to flog cars without looking like they're knocking thousands off, but whatever, it works and you'd be mad not to take it.
Snowboy said:
I'm pretty sure a dealer can only put £3k on a credit card.
And only about the same in cash.
The rest must be debit.
It's a money laundering thing.
I'm sure someone will be alobg soon with the exact details.
You can put as much as you like on a credit card, but they'll charge you 2.5% for the privilege, £500 on a £20,000 car.And only about the same in cash.
The rest must be debit.
It's a money laundering thing.
I'm sure someone will be alobg soon with the exact details.
There is a cash limit to try and stop money laundering, forget how much but about £11,000 I think.
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