New car buying strategies

dnme

I'm thinking of purchasing a new car. I've done a bit of research on make/model and am now weighing up finance / cash options. I just wondered if a thread on the issue might help me and others or at the very least, make for interesting reading.

Can I just ask those that think buying a new car is a crazy waste of money to refrain from making that point here. That point has been made time and time again and it's not what this thread is about. Also bear in mind, if no one ever bought new cars, you would not have a second hand market to shop in.


Finance:
I wonder what do people think is a good (best of a bad lot) strategy when it comes to financing? I can fund a lot of the price myself but dont want to entirely pillage my savings. I am happy and more comfortable to take a bit of a hit on interest if it spreads the costs.

PCP? Has anyone gone down this route? What was your experience? On paper at least, it appears to be nothing much more than renting. But maybe there's something to be said for reduced monthly payments and reduced interest charges. Perhaps you can put aside a bit every month towards the balloon payment thus boosting your savings / savings habit for a while.

HP ? Same questions really. I kinda like this option cos I can go in with a more flexible deposit amount. Ideally the more you put down up front, the cheaper the cost of finance.

Leasing ? Is this even available to non business consumers in Ireland ? Same questions as above.

Rates
Personal Loans versus Manufacturers HP. There is a vast difference out there. The banks are averaging 10% atm, whereas some manufacturers are down as far as 3.9 (Volkswagen bank), and I think Seat are offering 0% on some makes now. What's around the corner? Will we see new offers for 141 reg ?

Timing:
It's mid October, Is this a good time to try and strike a deal or should people wait til the new year ? If you get a good deal now, your car becomes 1 year old (on paper) almost immediately. This might lead to a hit on residual value. Is it significant in anyone's experience? Say you were trading in the car in 3-5 years time ?

Haggling:
I am led to understand from various articles that dealers average about 8% commission on new vehicles. I do realise that they can not haggle as much as some of us may sometimes believe they can. However there are all kinds of connotations to consider here. Are you trading in? Straight deal ? RRP v on the road price ?
e.g. I'm interested in a particular make / model. The car is retailing at about 34k on the road. I am straight dealing and my after a chat with my local dealer, I was offered the car for €30800. How does that sound ? What room is there for haggling in general? What's reasonable and what's not ? Also, if you are buying a new car off the lot, why pay delivery charges?


I realise I am asking many questions but just hoped that the thread would turn into a discussion on the entire process of buying a new car and fuel good and informative debate. It can be a confusing process and I for one would like to make as much sense of it and be as well informed as I can. Here's a good article from the Irish Times, well worth a read.
http://url.ie/jffj

Dionysius2

dnme wrote: »

I'm thinking of purchasing a new car. I've done a bit of research on make/model and am now weighing up finance / cash options. I just wondered if a thread on the issue might help me and others or at the very least, make for interesting reading.

Can I just ask those that think buying a new car is a crazy waste of money to refrain from making that point here. That point has been made time and time again and it's not what this thread is about. Also bear in mind, if no one ever bought new cars, you would not have a second hand market to shop in.


Finance:
I wonder what do people think is a good (best of a bad lot) strategy when it comes to financing? I can fund a lot of the price myself but dont want to entirely pillage my savings. I am happy and more comfortable to take a bit of a hit on interest if it spreads the costs.

PCP? Has anyone gone down this route? What was your experience? On paper at least, it appears to be nothing much more than renting. But maybe there's something to be said for reduced monthly payments and reduced interest charges. Perhaps you can put aside a bit every month towards the balloon payment thus boosting your savings / savings habit for a while.

HP ? Same questions really. I kinda like this option cos I can go in with a more flexible deposit amount. Ideally the more you put down up front, the cheaper the cost of finance.

Leasing ? Is this even available to non business consumers in Ireland ? Same questions as above.

Rates
Personal Loans versus Manufacturers HP. There is a vast difference out there. The banks are averaging 10% atm, whereas some manufacturers are down as far as 3.9 (Volkswagen bank), and I think Seat are offering 0% on some makes now. What's around the corner? Will we see new offers for 141 reg ?

Timing:
It's mid October, Is this a good time to try and strike a deal or should people wait til the new year ? If you get a good deal now, your car becomes 1 year old (on paper) almost immediately. This might lead to a hit on residual value. Is it significant in anyone's experience? Say you were trading in the car in 3-5 years time ?

Haggling:
I am led to understand from various articles that dealers average about 8% commission on new vehicles. I do realise that they can not haggle as much as some of us may sometimes believe they can. However there are all kinds of connotations to consider here. Are you trading in? Straight deal ? RRP v on the road price ?
e.g. I'm interested in a particular make / model. The car is retailing at about 34k on the road. I am straight dealing and my after a chat with my local dealer, I was offered the car for €30800. How does that sound ? What room is there for haggling in general? What's reasonable and what's not ? Also, if you are buying a new car off the lot, why pay delivery charges?


I realise I am asking many questions but just hoped that the thread would turn into a discussion on the entire process of buying a new car and fuel good and informative debate. It can be a confusing process and I for one would like to make as much sense of it and be as well informed as I can. Here's a good article from the Irish Times, well worth a read.
http://url.ie/jffj

This has potential to be a very useful thread if only the ranters can stay away. Hope that's what happens.
Is there not a lot to be said for raising finance for car purchase via credit union loans ? More accessible and easier to manage than any other fin institution surely ?

dnme

Dionysius2 wrote: »

This has potential to be a very useful thread if only the ranters can stay away. Hope that's what happens.
Is there not a lot to be said for raising finance for car purchase via credit union loans ? More accessible and easier to manage than any other fin institution surely ?

Hard to know. If you have no history with a CU, then time is against you cos you would have to spend 6-12 months saving before you could be eligible for a loan whereas you can walk into any bank, or car dealer and be eligible for finance immediately based on your credit rating and current financial situation.

digzy

Hi op

I bought a new passat 1.6 comfort line with met paint last jan. I bought straight with cash. Can't rem the price quoted officially but hogan in limerick wanted 28400, got quoted 27500 by pierces in Tipp, went back to hogan who wouldn't go lower than 27500. Harvey in thurles would sell me a beige one without the Bluetooth for 26900. Eventually I got Pierces down to 27200 and we did business at that. I got the usual vw thing of the 3 services and the fuel voucher but absolutely no extras.

Having said that my dad bought a caddy last July and hogans weren't beaten by Pierce or Harvey.

Hope this helps.

dnme

digzy wrote: »

Hi op

I bought a new passat 1.6 comfort line with met paint last jan. I bought straight with cash. Can't rem the price quoted officially but hogan in limerick wanted 28400, got quoted 27500 by pierces in Tipp, went back to hogan who wouldn't go lower than 27500. Harvey in thurles would sell me a beige one without the Bluetooth for 26900. Eventually I got Pierces down to 27200 and we did business at that. I got the usual vw thing of the 3 services and the fuel voucher but absolutely no extras.

Having said that my dad bought a caddy last July and hogans weren't beaten by Pierce or Harvey.

Hope this helps.

Yea I have been to three dealers to discuss the same car. Each one seems willing to undercut the last but only by a small amount which is understandable.
I notice this thread is very quiet which is interesting and telling in itself. I might suggest that there are not a lot of people thinking of new cars understandably.

Phibsboro

I'm in the market for a new VW Beetle, asking myself the same questions as OP. Been to one dealer (the Airside one) who offered me 3 grand less on my 08 Fiat 500 than a Kia/Fiat dealer. Going to try Park Motors on the Navan Road tomorrow. I'm after a specific spec that is probably going to be a factory order, I fear that reduces my appeal to them (no chance of selling me on a 132 cos they wouldn't have it in time i think).

Any thoughts on where else in Dublin or surrounding counties I should try?

dnme

Phibsboro wrote: »

I'm in the market for a new VW Beetle, asking myself the same questions as OP. Been to one dealer (the Airside one) who offered me 3 grand less on my 08 Fiat 500 than a Kia/Fiat dealer. Going to try Park Motors on the Navan Road tomorrow. I'm after a specific spec that is probably going to be a factory order, I fear that reduces my appeal to them (no chance of selling me on a 132 cos they wouldn't have it in time i think).

Any thoughts on where else in Dublin or surrounding counties I should try?

How are you planning on financing ? Feel free not to answer, you may well want to keep that to yourself. Just trying to get peoples opinions on all the finance options and what others do / think.

Idbatterim

is there anything to be saved on bringing them in from the north?

dnme

Idbatterim wrote: »

is there anything to be saved on bringing them in from the north?

I've done many calculations on UK imports and as far as I can see, and unless my maths are way off, there is little or no point at present, well on the models that I sampled anyway. When you figure in excgange rates, VRT, Vat if new etc the prices in my calcs are coming out slightly worse than I can get form a dealer here. Things sure have changed

Phibsboro

I have a vague recollection of reading about someone buying a car direct from the factory in Europe. Is that a runner with VW? Could be fun going over to collect it :-)

Re financing, I have money saved and with the tiny interest rates on offer these days I'll be using that rather than taking a loan.

Henry Ford III

Dealer markup varies. 8% is far from universal.

spank_inferno

When we purchased new we went for a nomal hire-purchase.

The baloon at the end was not appealing.
Though we still had to put down 40% to secure finance.

Wrt your discount, I think its fine... You are unlikely to get much more imo. Our car had an rrp of €32,800... We settled on 29k.

In terms of finance we found that the manufacturers finance house offered the best rate (VW bank @ 4.9% at the time).

dnme

Henry Ford III wrote: »

Dealer markup varies. 8% is far from universal.

I'm sure you're correct but this is a good ball park figure to base rough calculations off of. Also there's a source for this info posted above so not just my opinion.

MuppetCheck

Ifound that it varied from close one zero to about 15% when looking earlier in the year. Once you decide what car you want it's just a matter of playing a few dealers against each other to get as much as possible.

dnme

spank_inferno wrote: »

When we purchased new we went for a nomal hire-purchase.

The baloon at the end was not appealing.
Though we still had to put down 40% to secure finance.

Wrt your discount, I think its fine... You are unlikely to get much more imo. Our car had an rrp of €32,800... We settled on 29k.

In terms of finance we found that the manufacturers finance house offered the best rate (VW bank @ 4.9% at the time).

If you went for normal HP, why did you have a balloon payment at the end? (or perhaps you're saying that this is what made you choose HP over PCP). Yea dealer finance rates tend to be pretty good, well some of them but of course HP is a different animal to a personal loan. Main differences being . .

HP - Usually You do not own the vehicle until the final payment is made. You cannot sell the vehicle as a way of paying off the loan.

Personal Loan - You own the vehicle immediately on purchase. You can sell the vehicle top pay off the loan.

But the difference between bank / cu rates at present, v manufacturer rates is huge. In some cases the banks are 3 times more expensive. So that is a biggie!

AltAccount

dnme wrote: »

I'm sure you're correct but this is a good ball park figure to base rough calculations off of. Also there's a source for this info posted above so not just my opinion.

Maybe I missed it, what make/model/spec are you looking at? No one can give you a ballpark discount without that info. There is no blanket discount that can be applied across all cars.

dnme

AltAccount wrote: »

Maybe I missed it, what make/model/spec are you looking at? No one can give you a ballpark discount without that info. There is no blanket discount that can be applied across all cars.

Of course not, We can only talk in averages, ball park figures for the sake of a discussion. My info is coming form an article in the Irish Times.

As for my details, I was looking at a Mazda CX-5 Sport trim new. I have no trade in and have all finance options at my disposal. However Mazda are not marketing aggressively in Ireland IMO and there are better offers to be had on VW's and Skoda's. I can drive away a Yeti 2L 170BHP 4x4 at 3.9%, it's nearly the same price as the Mazda but in top trim, with all toys and leather interior etc. Or the new KIA Sportage LXE trim. All the toys, nav etc for €28000 RRP so work back form there.

I'm really hoping though that we can have a thread about the wider issues, the finance options, the drawbacks, what to look out for, what to go for, when do go for it etc. Lets not get hung up on markup percentages.

AltAccount

dnme wrote: »

I'm really hoping though that we can have a thread about the wider issues, the finance options, the drawbacks, what to look out for, what to go for, when do go for it etc. Lets not get hung up on percentages.

Fair enough, I don't see how it's possible to compare finance options without discussing interest rates, or car purchase prices without knowing the net price (or second hand value, or servicing costs, or reliability and warranty).

I wouldn't purchase a car based on generalities, but it's your thread...

dnme

AltAccount wrote: »

Fair enough, I don't see how it's possible to compare finance options without discussing interest rates, or car purchase prices without knowing the net price (or second hand value, or servicing costs, or reliability and warranty).

I wouldn't purchase a car based on generalities, but it's your thread...

What I meant by percentages, was the dealer markup.

AltAccount

That's what I meant too.

List price - dealer markup = net price.

dnme

AltAccount wrote: »

That's what I meant too.

List price - dealer markup = net price.

Well at least it's filled a couple of pages

AltAccount

What?

Phibsboro

Did the deal on the Beetle up in Park Motors, got close to the 8k on the 500 that Kia were offering, happy enough with that. The Park service department is very close to me so all round a handy choice for me.

Sam Russell

I think you should look at pricing the model you select from a UK car warehouse operation. Check prices for low mileage one year old and pre-registered 0 miles cars. Then you can calculate the landed cost, add the VRT and have a bench mark. Thr UK VAT rate is 20% vs 23% here.

UK cars have different specs than local cars, most important being the MPH vs Km/Hr. Armed with that, you can reckon on how much the local dealer can accommodate you on discounts. He makes a commission on the finance.

Bear in mind the following. All the finance options are designed to make the monthly cost as low as possible - to appear cheaper. Balloon payments usually suck you into a trade in at the end of the period as you have to find a significant lump sum to own your car. Residuals are calculated to favour the dealer - watch the excess mileage charges. There are significant legal differences between the different options on finance with regard to your rights as a consumer. Paying cash is not always good for a dealer as he makes commissions on the finance, as already mentioned. Buy at the end of a quarter, as dealers have quarterly goals to reach for discounts.

dnme

Phibsboro wrote: »

Did the deal on the Beetle up in Park Motors, got close to the 8k on the 500 that Kia were offering, happy enough with that. The Park service department is very close to me so all round a handy choice for me.

Sorry Phibsboro, bit confused here.
Beetle or Kia?
8k on 500 ?

Phibsboro

dnme wrote: »

Sorry Phibsboro, bit confused here.
Beetle or Kia?
8k on 500 ?

Was looking at both the Beetle and Kia initially. On my first go round the dealers in Airside, the VW one offered me 5k on my 08 500 (off a Beetle) while the Kia dealer offered me 8k (off an LXE Sportage). On that basis the Sportage was actually cheaper (and arguably better spec'ed, that LXE model is killer) than the Beetle.

Then today another VW dealer gave me close to the 8k and I did the deal on a Beetle. I would say both VW dealers were very professional but amazed one was nearly 3k off on the trade in.

BTW, I am aware that a choice of either the Sportage or a Beetle seems strange, lets just say i'm not exactly mad into cars and different things on both appealed to me

dnme

Phibsboro wrote: »

Was looking at both the Beetle and Kia initially. On my first go round the dealers in Airside, the VW one offered me 5k on my 08 500 (off a Beetle) while the Kia dealer offered me 8k (off an LXE Sportage). On that basis the Sportage was actually cheaper (and arguably better spec'ed, that LXE model is killer) than the Beetle.

Then today another VW dealer gave me close to the 8k and I did the deal on a Beetle. I would say both VW dealers were very professional but amazed one was nearly 3k off on the trade in.

BTW, I am aware that a choice of either the Sportage or a Beetle seems strange, lets just say i'm not exactly mad into cars and different things on both appealed to me

That new Sportage looks stunning and the new LXE trim is mighty value. Then throw in the 7 year warranty. Well done for shopping round and boy what a result. Do you mind me asking you what route did you choose to finance - feel free not to answer.

Phibsboro

dnme wrote: »

That new Sportage looks stunning and the new LXE trim is mighty value. Then throw in the 7 year warranty. Well done for shopping round and boy what a result. Do you mind me asking you what route did you choose to finance - feel free not to answer.

Yes the sportage was *gorgeous*. As I said in an earlier post I did a cash deal, had savings put aside and at the near non existent rates on deposits at the moment there was no finance deal that was going to tempt me not to use my own cash.

dnme

Phibsboro wrote: »

Yes the sportage was *gorgeous*. As I said in an earlier post I did a cash deal, had savings put aside and at the near non existent rates on deposits at the moment there was no finance deal that was going to tempt me not to use my own cash.

I was on the brink of buying a Sportage but just couldn't find the headroom. Im very tall. But then also, after driving the CX-5 and then the Yeti 170BHP, the sportage was a little under powered. Well ware to you.

JoeCole26

I'm also interested to hear people's thoughts on financing for a new car. I'm going to be in the market for a new car in the next 6-12months. Will have about 20-25% of the price of the car in savings to contribute towards it, but the other 75% will be either through a car loan from my bank (not member in credit union long enough) or through PCP. I've watched the following video and it does sound appealing. I know you will never "own the car" but if I get a loan I will be paying for 3-4 years before I actually own it, so what's the difference? Plus would be nice to get a new car every 3/4 years. Really for me, the question is does it really matter who I'm paying for the financing as long as I can afford the monthly repayments and I'm happy with the car.


http://youtu.be/B-pmxi-3RNA

Look forward to hearing all your thoughts

Bpmull

JoeCole26 wrote: »

I'm also interested to hear people's thoughts on financing for a new car. I'm going to be in the market for a new car in the next 6-12months. Will have about 20-25% of the price of the car in savings to contribute towards it, but the other 75% will be either through a car loan from my bank (not member in credit union long enough) or through PCP. I've watched the following video and it does sound appealing. I know you will never "own the car" but if I get a loan I will be paying for 3-4 years before I actually own it

Look forward to hearing all your thoughts

Personally I think your best bet is to just get a straight loan specially when you can put up a 20 percent deposit. If buying from vw group and you can get 4 percent interest this option is hard to beat. All the salesmen will push Pcp on you as they are making more on it. IMO Pcp is for people who can just about afford a new car it suits them as the repayments are low and a low deposit to start of with. But ultimately it costs you more in the long run. A family member was recently buying a new car through vw bank and the salesman almost had them talked into Pcp until my mother went through the figures and there was about 4k in the difference. It may be different if your paying 9-10% on a loan but at 4% that's the one to take IMO.