Paying car finance off early questions?

[Oakesj103]

When looking at buying a car recently I mentioned to the salesman about getting a loan.

They then went on to give a big speech on how that’s not a good idea because if you get finance and the car has a fault or something similar they have a vested interest in the car and can work in your favor, is this true or is it just a way to get you to take their finance out?

Another question is, I never bought the car but have money sitting in savings that could pay off my current car finance, is this a good or bad idea particularly or does it not matter?

I would save a couple hundred quid in the long run due to interest etc but would I then be losing my car finance providers “vested interest” and may as well keep up the finance until it runs out when I would lose that “Vested interest” anyways?

Thanks, Josh.

[Mark V GTD]

The sales guy gets a commission from the finance company if you take the finance. If you pay by cash or with a loan he gets no commission - so its very much in his interest to get you to sign up for it.

[Chris32345]

He is talking out your arse
Having finance on the car offers no benefits with regards to repairs Salesman just wants his commission

[Butter Face]

It kind of is true. If you’ve got finance on the car the asset essentially belongs to the finance company until you’ve paid it off.

I have had one case in the past where a customer has successfully lobbied a finance company to help towards repair costs (snapped cambelt) on a car outside of warranty. It was a battle though but did work!

Is it a tangible benefit? Dunno. Depends on the cost difference between your finance method and the dealer finance.

[syl]

What type of finance do you currently have? If it's PCP, the commonest, you'll lose the option to hand the car back at the end of the term - something that might be useful if prices post-COVID significantly fall.

[ToastMan76]

Just to add another however unlikely issue - bailiffs cannot sieze your car from you if it is on finance such as PCP/HP etc. Whereas if it is paid off using savings or a loan, they can then you are on the hook for the loan amount whilst not having anything to show for it.