Are dealers discounting for cash purchases?
Discussion
Appreciate this is a have a chat to dealer and find out question, but wanted to tap up the forum first to gain some 'knowledge is power'.
I'm after a new Tiguan, and lease costs have come down a bit in recent weeks. But like most lease deals in the current market, still not a huge amount to write home about. So I've been looking into low cost loans and potentially buying the car outright, which looks to be somewhat cheaper overall, and I'd own the car.
But question is, having spoken to my local dealers recently they are open to matching online PCH offers, or providing dealer contribution for PCP (~£4k on a ~£36k car) so there is scope for haggling on cost, but if I were to pay for the car in cash if there likely to be the same scope to haggle on price? I presume not since the dealer is not taking any interest on loan, but wanted to check others experience in current market.
I'm after a new Tiguan, and lease costs have come down a bit in recent weeks. But like most lease deals in the current market, still not a huge amount to write home about. So I've been looking into low cost loans and potentially buying the car outright, which looks to be somewhat cheaper overall, and I'd own the car.
But question is, having spoken to my local dealers recently they are open to matching online PCH offers, or providing dealer contribution for PCP (~£4k on a ~£36k car) so there is scope for haggling on cost, but if I were to pay for the car in cash if there likely to be the same scope to haggle on price? I presume not since the dealer is not taking any interest on loan, but wanted to check others experience in current market.
Just go on CarWow, see what comes up, see if your local dealer can match or at least get close and take it from there.
If finance deals work out cheaper with deposit contributions etc, go that route and settle within 14 days using your loan, you will still get the benefit of the deposit contribution.
If finance deals work out cheaper with deposit contributions etc, go that route and settle within 14 days using your loan, you will still get the benefit of the deposit contribution.
Know someone who was in the same situation recently and wanted to pay in cash. Their best option that they ended up going for was taking out finance and then settling the finance the following week. This meant they still managed to benefit from the dealer contributions towards the finance.
OK the canceling within 14 days and paying out the loan option is interesting, sounds like having your cake and eating it.
How does this work then, you negotiate and sign up to PCP then how do the mechanics of cancel and pay out work?
You'd think this 'loophole' would have been closed by now?
How does this work then, you negotiate and sign up to PCP then how do the mechanics of cancel and pay out work?
You'd think this 'loophole' would have been closed by now?
Most bigger dealers would prefer you to use some kind of finance product, it’s part of their targets and the way they earn profits.
My old man bought a used Tiguan last year and was adamant he would pay cash. The dealership was offering 2 free services if you financed the car, so he did that on HP and paid the balance after the first DD left his bank.
My old man bought a used Tiguan last year and was adamant he would pay cash. The dealership was offering 2 free services if you financed the car, so he did that on HP and paid the balance after the first DD left his bank.
CaptainHindsight said:
OK the canceling within 14 days and paying out the loan option is interesting, sounds like having your cake and eating it.
How does this work then, you negotiate and sign up to PCP then how do the mechanics of cancel and pay out work?
You'd think this 'loophole' would have been closed by now?
Sign the finance agreement, give it a few days for the agreement to be active, then phone VWFS tell them you want to withdraw and pay the balance over the phone, plus a few days interest. How does this work then, you negotiate and sign up to PCP then how do the mechanics of cancel and pay out work?
You'd think this 'loophole' would have been closed by now?
It will say in the agreement T's&C's that you will/may be liable for any deposit contribution amount but that never happens, they are just covering their arse for when this is likely to happen as it will happen at somepoint as a) it costs the manufacturer money and b) the FCA monitor the amount of finance withdrawals, it is on their radar and they may clamp down on this happening as it can be seen as mis selling by a dealer.
HTP99 said:
Sign the finance agreement, give it a few days for the agreement to be active, then phone VWFS tell them you want to withdraw and pay the balance over the phone, plus a few days interest.
It will say in the agreement T's&C's that you will/may be liable for any deposit contribution amount but that never happens, they are just covering their arse for when this is likely to happen as it will happen at somepoint as a) it costs VW money and b) the FCA monitor the amount of finance withdrawals, it is on their radar and they may clamp down on this happening as it can be seen as mis selling by a dealer.
Great thank you. It will say in the agreement T's&C's that you will/may be liable for any deposit contribution amount but that never happens, they are just covering their arse for when this is likely to happen as it will happen at somepoint as a) it costs VW money and b) the FCA monitor the amount of finance withdrawals, it is on their radar and they may clamp down on this happening as it can be seen as mis selling by a dealer.
I did the “withdraw” thing on a new BMW in 2017 and no such condition around having to repay any finance contribution etc in their T&Cs.
I had read elsewhere to be careful to use the “withdraw” term rather than “I’d like to settle” as they mean different things and withdrawing is like cancelling the product where IIRC settling incurs interest daily and has a different outcome in your credit record - If my memory serves me correctly anyway.
To make the man maths easier I did it on a HP rather than PCP - ie say the car was £20k and I put £10k deposit and £10k finance, I knew that I’d have to withdraw from £10k finance. Whilst dealers prefer you to get in to the PCP roundabout, in the case of BMW the contribution was the same on PCP / HP as long as the HP loan was over £10k. As long as the PCP finance amount is clear then I guess it’s just as easy.
Ps in my case there was no other freebie (free service etc) so I had nothing else to lose by doing this withdrawal. The dealer has since called me a few times about new cars etc so I don’t think any bridges burned neither.
I had read elsewhere to be careful to use the “withdraw” term rather than “I’d like to settle” as they mean different things and withdrawing is like cancelling the product where IIRC settling incurs interest daily and has a different outcome in your credit record - If my memory serves me correctly anyway.
To make the man maths easier I did it on a HP rather than PCP - ie say the car was £20k and I put £10k deposit and £10k finance, I knew that I’d have to withdraw from £10k finance. Whilst dealers prefer you to get in to the PCP roundabout, in the case of BMW the contribution was the same on PCP / HP as long as the HP loan was over £10k. As long as the PCP finance amount is clear then I guess it’s just as easy.
Ps in my case there was no other freebie (free service etc) so I had nothing else to lose by doing this withdrawal. The dealer has since called me a few times about new cars etc so I don’t think any bridges burned neither.
ukpolak said:
I did the “withdraw” thing on a new BMW in 2017 and no such condition around having to repay any finance contribution etc in their T&Cs.
I had read elsewhere to be careful to use the “withdraw” term rather than “I’d like to settle” as they mean different things and withdrawing is like cancelling the product where IIRC settling incurs interest daily and has a different outcome in your credit record - If my memory serves me correctly anyway.
I did it with VW and it was fine - but, supposedly, when you Withdraw (which I did) it’s like the agreement never existed so the T’s & C’s don’t matter. However, the bit that confuses me is, if that’s true, why is there a daily interest charge?I had read elsewhere to be careful to use the “withdraw” term rather than “I’d like to settle” as they mean different things and withdrawing is like cancelling the product where IIRC settling incurs interest daily and has a different outcome in your credit record - If my memory serves me correctly anyway.
I know some people like to leave it a bit and Settle, especially if they feel obligated to the salesperson. With Settling there’s no question about keeping incentives etc, but it’ll cost a few hundred quid more.
On discounts, our VW deal was for a Tiguan and DriveTheDeal were a grand cheaper than the lowest CarWow quote but DtD rang me up and the guy was an arse - wouldn’t tell me how far away dealer was and wouldn’t connect me to them unless I agreed to wait factory leadtime. I worked on the CarWow dealers and one 15 miles away got close enough on price and got us a car in a week.
Sheepshanks said:
I did it with VW and it was fine - but, supposedly, when you Withdraw (which I did) it’s like the agreement never existed so the T’s & C’s don’t matter. However, the bit that confuses me is, if that’s true, why is there a daily interest charge?
I know some people like to leave it a bit and Settle, especially if they feel obligated to the salesperson. With Settling there’s no question about keeping incentives etc, but it’ll cost a few hundred quid more.
On discounts, our VW deal was for a Tiguan and DriveTheDeal were a grand cheaper than the lowest CarWow quote but DtD rang me up and the guy was an arse - wouldn’t tell me how far away dealer was and wouldn’t connect me to them unless I agreed to wait factory leadtime. I worked on the CarWow dealers and one 15 miles away got close enough on price and got us a car in a week.
IIRC correctly I didn’t have any interest to pay - I did it 7 days in to the cooling off (14 day period) and it was something like a £10k loan on 2.9% for which the daily interest would have been very small. So I don’t know if no interest because of the small time / APR / loan combo or just because of the withdrawal. I know some people like to leave it a bit and Settle, especially if they feel obligated to the salesperson. With Settling there’s no question about keeping incentives etc, but it’ll cost a few hundred quid more.
On discounts, our VW deal was for a Tiguan and DriveTheDeal were a grand cheaper than the lowest CarWow quote but DtD rang me up and the guy was an arse - wouldn’t tell me how far away dealer was and wouldn’t connect me to them unless I agreed to wait factory leadtime. I worked on the CarWow dealers and one 15 miles away got close enough on price and got us a car in a week.
I did call BMWFS ahead of purchase with a speculative enquiry on “ what would happen if I withdrew” etc and as far as they’re concerned, price of car and the deal is a dealer thing and they were just a credit facility so confirmed to me that there’d be no come back. Likewise the T&Cs of the deal just said 14 days and made zero mention of any “we reserve the right to xxx” etc.
Tbh it’s bonkers that the best prices used to be for when you’d take out a loan - like they’re encouraging debt. The FCA should be all over this from a culture perspective.
I have seen of late on carwow etc that PCP and cash price quotes are identical so perhaps less such incentive now. Which then brings me back to the OP question and tbh I don’t know any more if you’re better off getting finance to secure better prices if indeed cash and finance prices are identical of late. This could however be a covid thing where cash now is better than income over time.
HTP99 said:
Sign the finance agreement, give it a few days for the agreement to be active, then phone VWFS tell them you want to withdraw and pay the balance over the phone, plus a few days interest.
It will say in the agreement T's&C's that you will/may be liable for any deposit contribution amount but that never happens, they are just covering their arse for when this is likely to happen as it will happen at somepoint as a) it costs the manufacturer money and b) the FCA monitor the amount of finance withdrawals, it is on their radar and they may clamp down on this happening as it can be seen as mis selling by a dealer.
I did this recently with my wife's new car and saved £3800 in interest and still got a manufacturers contribution,all using Carwow.It will say in the agreement T's&C's that you will/may be liable for any deposit contribution amount but that never happens, they are just covering their arse for when this is likely to happen as it will happen at somepoint as a) it costs the manufacturer money and b) the FCA monitor the amount of finance withdrawals, it is on their radar and they may clamp down on this happening as it can be seen as mis selling by a dealer.
ukpolak said:
IIRC correctly I didn’t have any interest to pay - I did it 7 days in to the cooling off (14 day period) and it was something like a £10k loan on 2.9% for which the daily interest would have been very small. So I don’t know if no interest because of the small time / APR / loan combo or just because of the withdrawal.
It was around £25 for me.The fact that they have a basis on which interest can be charged means, to me, this business of the finance deal being cancelled like it never existed can't be right. I therefore think it would be impossible for them to recover the deposit contribution. I did make sure when I called VWFS (who were amazingly friendly and helpful) that the amount outstanding was 'full and final'.
The only time I've ever heard of it being an issue is on Toyota where they had a free servicing deal but they only sent out the vouchers just before each service was due and only if the PCP was still running. We did get a service deal on the Tiguan, but paid a something towards it so I wasn't worried about that.
Sheepshanks said:
The only time I've ever heard of it being an issue is on Toyota where they had a free servicing deal but they only sent out the vouchers just before each service was due and only if the PCP was still running. We did get a service deal on the Tiguan, but paid a something towards it so I wasn't worried about that.
Had similar once with one of my colleagues deals, the finance came with free servicing but they were "cash" buyers, he suggested setting up a finance agreement and withdrawing within the 14 days problem is admin hadn't set up the servicing agreement in time, once they did get round to it (they are generally useless), there was no finance agreement live so therefore a cost was attached, we ended up footing the bill for it. CaptainHindsight said:
OK the canceling within 14 days and paying out the loan option is interesting, sounds like having your cake and eating it.
How does this work then, you negotiate and sign up to PCP then how do the mechanics of cancel and pay out work?
You'd think this 'loophole' would have been closed by now?
You need to read the fine print on the finance documents regarding early repayment penalties.How does this work then, you negotiate and sign up to PCP then how do the mechanics of cancel and pay out work?
You'd think this 'loophole' would have been closed by now?
Worth watching, because sales tactics will be much the same wherever you are.
https://www.youtube.com/watch?v=M8ezBezrTOs
https://www.youtube.com/watch?v=M8ezBezrTOs
Gassing Station | Car Buying | Top of Page | What's New | My Stuff