Hire Purchase/Car Loan Query

MuddyDog

If you do HP or a Car Loan via a bank, do they give you say the 30k you want to borrow in the form of cash/cheque and you then pay them back monthly at the agreed rate? If so, wouldn't you be able to haggle the dealer down a bit from the listed price as it's a 'cash sale'?

CIP4

No generally for HP anyway you would haggle down to the cash price and then if going through the manufacturers finance you'd never see the money it goes straight to the dealer. Also cash discount is the same as buying straight as in you have no trade in thats the discount you get it doesn't mean you actually pay with cash if anything most dealers wouldn't want cash as its inconvenient. I'm not sure if thats what you mean.

Or do you mean you want to borrow 30k pay 28k and be put the 2k you saved that wouldn't make much sense as your justing pay back interest on the 2k. As far as I know most banks will make the cheque out to the dealer. So really the only way to do what your suggesting is get a personnel loan not a car loan.

Atlantic Dawn

Haggle the dealer down first, then get the cheque for the amount you agreed, cash sale means just that there's no trade in it's the straight price, it can be purchased with cheque, bank transfer or cash, either is accepted.

MuddyDog

Atlantic Dawn wrote: »

Haggle the dealer down first, then get the cheque for the amount you agreed, cash sale means just that there's no trade in it's the straight price, it can be purchased with cheque, bank transfer or cash, either is accepted.

That's what I was getting at. If I got a car loan through a bank and the cheque amount from the bank made out to the dealer was 30k and the car was worth 50k and I had my own cheque made out to the dealer for 20k then I could go into the dealer and haggle down the list price of 50k and ideally I'd hand over the banks cheque plus maybe 17-18k or whatever of my own money.

MuddyDog

So in my example would you suggest doing that and paying 6.5 or so % interest or getting PCP where the % is lower? I'd most likely want to re-finance after 3 years of monthly payments. I assume the % increases if you re-finance for say another 2 years of monthly payments that would completely pay off the amount?

George Dalton

There is no cheque with HP and you won't see the money at all, it is paid from the financial institution to the dealer directly by bank transfer upon receipt of the signed HP agreement.

So you need to agree the price in advance with the dealer and then sort out the finance figures.

Lots of dealers can handle the finance side of things for you anyway, so if you make the application through them it is less hassle for you. Just make sure they aren't hitting you with a higher interest rate to increase their commission from the deal.

bazz26

As said agree a price with the dealer first then organise how you pay for it.