I offered to pay for a car in cash but the dealer has told me finance is better. Do you agree?

I offered to pay a major car dealer in cash for a car but he has come back to me saying that this is not advantageous. He's offered incentives like a £1,250 reduction and benefits like extended warranty and 2 years' free servicing if I take on finance - but surely the benefits are all theirs. I have the money and don't want finance hanging over me. What is his real motive? Extra commission for him, I guess? It doesn't make sense to me.

Asked on 12 March 2021 by Mike Martin

Answered by Andrew Brady

A big chunk of a salesperson's commission will come from finance companies. They lose out if you buy a car with cash, which is why there are so many incentives for you to buy with finance. You're not alone in being surprised by this – dealers are routinely approached by customers expecting a discount for cash. Unfortunately, it's a long time since the 'cash is king' maxim was true in the world of car buying.

Tags: finance

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