My daughter who has been working abroad is coming home . She will need a car, she has no part ex and needs to buy the car on finance to help give her a credit score . Looking for a mortgage too.
She has a good job, Deputy Headteacher.
Looking at a car around £10k-£12k.
Can she expect a decent discount because of the Finance and no Part Exchange?
As I understand it the best discounts are usually for cash, as dealers make their money on credit. I wouldn't expect any kind of discount buying on credit, which is why I never buy cars that way. However, don't take my word for it as my info could be decades out of date, that is just what I have always believed.
The car I have now was effectively a cash sale, although I did borrow some of the money elsewhere on a personal loan. I got a small discount on the car from the dealer.
There is a shortage of cars at the moment, so prices are high and discounts are low.
You may be surprised just how little you now get for the budget. I've had a few valuations of our five year old Yaris and I can get more than we paid for it at 1 year old.
If buying cash, make sure that you put at least £100 of the purchase price on a credit card. That way you are protected under Section 75 of the Consumer Credit Act. If the car turns out to be a heap and the dealer is no help you can claim the whole of the purchase price from your credit card company, who then claim it back from the dealer. The onus is then on the dealer to prove their case for refusing a refund.
As people have said - there is a shortage - though I have to say that driving around I see little evidence of that on forecourts I have passed. At a rough guess one local dealer has around 500 cars parked in their back lot and others look to have similar stock. But back to the purchase..... I wouldn't ever go in saying I was buying on cash or finance - keep them guessing. Each car will have a bottom line - be prepared to walk away and 'think'. A salesman wants sales- he/she may just ring with an offer. By all means ask for a discount - but remember the reply will be either no or a lower price. A lower price certainly won't be the LOWEST price so push for more OR if you really like the car get a few things thrown in - tax/fuel/services. i know a few salesmen and non get much personally out of a finance deal as the big profits go to the finance provider- often a subdivision of the company. Discounts ARE available I got 14.9% of a new car last year and that was given before I discussed finance which also came with £1500 cash back. I would go fo 10% as a stater and see what happens - maybe do a trial run on something a bit further from home to get her hand in! Pay the deposit on a credit card. Send hand finance is expensive - maybe try a personal loan - if she has no credit history they may be happy with a guarantor.... be that can be risky!
In big dealerships the salesman often work for discounts for the group as a whole. I'd buy in March, end of financial years for accounts, and end of quarter. Don't fall for paintwork/upholstery protection packs - they charge a lot and cost next to nothing.
The credit score will build up other ways - paying off all the credit card every time, paying the energy bills etc. I’d buy the car with cash (or use a credit card as a very short term loan, paying it off quickly; it would give some protection if there’s a problem), a Deputy Head has a very good salary & many people saved up during Covid.
It’ll be hassle enough to get a mortgage, but she may have to rent (or stay with the OP & save money) until she can actually get a property, given how quickly they’re selling. Going in less than a week up here.
It’ll be lovely having her back though!
Quote: Originally posted by jaiash on 22/2/2022
. I wouldn't ever go in saying I was buying on cash or finance - keep them guessing. Each car will have a bottom line - be prepared to walk away and 'think'. A salesman wants sales- he/she may just ring with an offer. By all means ask for a discount - but remember the reply will be either no or a lower price. A lower price certainly won't be the LOWEST price so push for more OR if you really like the car get a few things thrown in - tax/fuel/services.
We bought a car outright last summer, but come Christmas we decided we didnt really like it, and fancied a swap. So we picked one out from a dealer website and test drove it. Knowing it would be our car + cash to swap, i had a figure in my head that i was determined not to go beyond of £1500 extra. The salesman tried telling me all sorts on why the 2k difference was a 'good deal'. Even after the old 'speaking to the manager' trick, he was still at £1850 adrift So i said i would let them know once we'd viewed a couple more that afternoon.
I think we had driven 500 yards when the phone rung.....an extra £1500 would get the car we wanted. Result!
Thanks for the replies, she and her partner will live with us until they find a house/ get a mortgage.
I offered her a free loan from Bank of Dad for the car, but she seems to think it is important to get the loan for her credit score.
The only other outgoings are for mobile phone, Netflix and Help to buy Isa.
She will probably get car insurance on pay monthly too.
If she goes down the HP route , i am thinking of paying a large cash and card deposit to reduce amount borrowed.
Have looked at PCP, after 48 months to keep the car it would be £600 more than if bought on HP.
Perhaps there are other advantages?
Never had any dealings with PCP, but maybe the company leasing the car out has to pay for any breakdown repairs? Not too sure of such things work, but if that is the case I would regard it as a kind of insurance against breakdowns.
I would avoid PCP on a used car (especially one a few years old) always expensive and a risk the car develops an expensive fault just before the PCP term ends and you have to pay for it to be repaired.
However if she doesn't mind what she drives and has the deposit she could be in a brand new Kia Picanto on a PCP for the budget through Carwow, other brokers may have similar offers.
As its new you just need certainty the dealer has them in stock.
I wouldn't read into too much about boosting your credit score by taking out finance as in the past 12 years I've purchased 2 caravans and a car on finance which I've never missed a payment with any of them. I have no county court judgments and everything else is up to date all with the green light and yet my score is still only classed as good for some reason. The credit reference company want me to take out other credit cards in order to boost my credit score which then puts me further into debt so I would rather continue to stay with a good record and keep on track without defaulting any creditors.
Quote: Originally posted by Colin21 on 22/2/2022
Never had any dealings with PCP, but maybe the company leasing the car out has to pay for any breakdown repairs? Not too sure of such things work, but if that is the case I would regard it as a kind of insurance against breakdowns.
The PCP will only cover normal wear a tear items or if a new car warranty items, and you must have it serviced at the specified mileage and not exceed the stated annual mileage at the end of the contract.
saxo1
Quote: Originally posted by tango55 on 22/2/2022
The credit reference company want me to take out other credit cards in order to boost my credit score which then puts me further into debt...
Only if you use it & don't pay it off before paying interest. Applying for extra credit cards can lower your score in the medium term even if not used.
Taking out a UK phone contract, even if sim only & having a UK credit card & using around 3% of it's limit & paying it off monthly will greatly help getting a good credit score. Not using my cards enough is the main thing that knocks a few points off my credit score.
If buying a car it'd be worth saving as much as she can towards it. Worth trying to avoid paying as little interest as possible on a depreciating asset.
To most car dealers selling you a car on credit is far more advantageous than offering a discount for cash! Its worth a try but in the current market if they are a bit too keen to offer a cash discount I think I would take a closer look at the car!!!
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Topic: Buying a car.
via mobile 22/2/2022 at 10:39am
