Many car owners believe that the best way to get the best price when they buy a new car is to buy outright in cash.But a new study by What Car? has shown that this is not true.It’s actually buying on finance that usually secures the best deals.
The study was conducted in May this year. What Car?’s mystery shoppers that, across all car brands, car buyers typically saved £3,670 on the list price when they financed their vehicle through the dealership.The average saving for cash buyers was £2,595 – a difference of £1,075.
There were also substantial incentives for buyers to finance their vehicle in the form of ‘deposit contributions’ (payments made by dealers towards the customer’s deposit on the vehicle).The average deposit contribution was £1,619.
In addition, the What Car? study found that more than a third of new car buyers said they would consider a car that wasn’t on their initial shortlist if they saw it advertised with 0% finance. In the past 12 months, manufacturers have also increased the amount of 0% interest rate deals on offer by a third. At the same time, the average finance discount on new cars has increased from £3,549 to £3,670.
“Finance plays a huge role in the modern car buying decision – the latest figures show seven in 10 private new car purchases are made on finance,” Steve Huntingford, the Editor of What Car?, said.“We are also seeing a larger number of dealers offering 0% finance terms. With an average deposit contribution of £1,619, this means it’s often cheaper for new car buyers to purchase their next vehicle on finance than outright with cash.”