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Buying a used car for the first time and need some help!

  • 23-01-2014 11:48pm
    #1
    eddie_1498
    Closed Accounts Posts: 30 ✭


    Hi all, I am buying a car for the first time and have some questions which I know are probably really stupid but I don't have a clue!

    I'm looking at a used car with a cash price of X when not trading in - what exactly does it mean by cash price? I know it doesn't mean you go in with wads of cash but is it basically having the finance sorted yourself as opposed to having to arrange finance with either the garage or through a HP arrangement with your bank?

    Also when you're trading in a car, is this a good or bad thing? As in will it knock money off the cash price above or will they quote me another a higher price and then knock money off?


Comments

  • #2
    biko
    Registered Users, Registered Users 2 Posts: 81,220 ✭✭✭✭biko


    Cash in this case means no car to trade in. You can still finance etc.
    Trading in car is not necessarily good or bad. Dealers will probably give you less than what the old car is worth but it's a handy way to upgrade for someone who isn't inclined to sell their car themselves and then buy from a dealer.


  • #3
    eddie_1498
    Closed Accounts Posts: 30 ✭eddie_1498


    Oh right so if i want to buy the car but want to arrange my own HP finance with my bank, it's still the same "cash price"?


  • #4
    colm_mcm
    Registered Users, Registered Users 2 Posts: 73,477 ✭✭✭✭colm_mcm


    Kinda goes like this.

    "Retail price" minus "discount" = "cash price"


    Scenario 1
    "Cash price" minus "actual trade in value" = "cost to change"

    Scenario 2
    "Retail price" minus "actual trade in value" and value of "discount" = "cost to change"

    Cost to change is the same in both situations. Scenario 1 is transparent, scenario 2 is commonplace.




    Another example
    2008 ford focus
    retail price €11000
    €1000 discount doable
    Cash price €10000

    Trade in of 00 corolla
    Trade value €500
    €1000 discount available on new car
    €1500 value offered against €11000

    Cost to change €11000 less €1500 (€9500)
    Cost to change €10000 less €500 (€9500)


  • #5
    eddie_1498
    Closed Accounts Posts: 30 ✭eddie_1498


    another quick question - the garage put in an application for me to get HP finance - does the fact that the garage is organizing it make it more expensive for me? do they generally charge extra for doing this?


  • #6
    colm_mcm
    Registered Users, Registered Users 2 Posts: 73,477 ✭✭✭✭colm_mcm


    They'll get the interest at a certain rate from their finance company and get commission on any rate higher than that.
    If they want to make the sale on the car, they'll look after you on the finance.
    Personal loan rates with my bank (boi) are astronomical at the moment. But you should shop around and see what you can get.
    Credit union should be considered too.

    Be aware too that HP is a lot more rigid than a general purpose loan when it comes to trading in later. Finance has to be paid off and the new car refinanced.


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