Hi, I'm in the early stages of researching a new car for the wiff and I bought What Car for the info at the back and the target prices. There's an advert in there from Sainsbury's Bank which I've read very carefully, several times and I can't see any catch. It says I pay:
1. a deposit
2. 36 monthly payments (with an APR of whatever it was)
3. optionally, a final payment.
1+2+3 add up to less than the What Car target price. So I'm getting a UK dealer sourced car for less than the Target Price and I even get to spread the payments.
Has anyone done this ? Any catch ? I'll talk to the dealers because I'd rather buy direct, but if I can't get a good deal I'll be in aisle 3 near the frozen peas with a big trolley asking an assistant if they get down that big box with a Honda / Toyota / Skoda / ... in it.
Thanks,
John
|
John don't know what the catch is but I struck a similar deal on my Scenic. Deposit, payments and final purchase price worked out approx £5k less than the car was brand new!
Ok, the car I got was pre registered so I was the second owner but it had 30 miles on the clock and was new as far as I was concerned.
My finance was through the dealer's own scheme. And by doing this, I could afford a brand new car on less monthly payments than I was paying on a 3 year old car!
|
According to the BBC web site ...
The UK supermarket chain Sainsbury's has done a deal which will see it leasing and selling cars in the UK.
The joint venture deal, with Bank of Scotland, will give potential buyers the choice of 3,500 models.
Sainsbury's Bank Drive, as it is branded, will allow customers to put down a minimum £215 deposit and pay from £152 a month.
The buying process is done over the phone or internet.
Once ordered, Sainsbury's says that cars will be delivered direct to a customer's door within an average six weeks of ordering.
Hatchbacks
Customers pay an agreed monthly amount for the vehicles, and at the end of the two or three-year agreement, they can choose to order another car, hand back their car and walk away, or buy the vehicle at a price agreed when it was ordered.
The scheme's nationwide launch follows a year long trial at 60 stores.
Hatchback cars have proved to be the most popular in the trial.
Sainsbury's Bank chief executive Hamish Taylor said: "From the pilot scheme, we found we were financing a wide range of cars from large family saloons to small city runarounds."
The supermarket's move into car leasing and sales, comes at a time when the UK government is seeking to push down the price of cars in the UK.
The complicated finance system involved in the Sainsbury's scheme does not promise cheaper cars, instead telling potential customers that this is a way for them to drive a car which they might find too expensive to buy outright.
It is particularly targeted at those who want to drive a new car every two to three years.
Sainsbury's move is a logical extension of its existing relationship with the Bank of Scotland, which already runs its other financial services.
|
Isn't the catch usually that you give the car and a lump sum at the end, so that it leaves you so broke you have to enter into another one of these and go through it all again?
A bit like the Yugo Wally at Swithland Motors.
|
Looks like a standard PCP (personal contract purchase) deal. There are lots of companies offering this as a way of purchasing a car, and all the manufacturers have their own version. There are also various brokers advertising such deals on this site. The main variables will be the price of the car, the interest rate and the guaranteed minimun future value. I think all schemes put a higher value at the end that the car will be worth. This way if you hand the car back, they don't lose. You also have the option using any equity at the end of the scheme as a deposit on your next car or paying the final payment and keeping the car.
You need to consider the price of the car, the final payment and the interest rate and factor in whether you intend to keep or hand back the car to decide which is the best of the numerous deals on offer. I've bought a car this way through Lex and it was easy, got a good discount on list price, free GAP insusrance and not a bad interest rate.
Brian
|
|
They have return conditions. If you want to dump the car back to them at the end at the agreed price it has to be in first class condition, with full service history, and not have done more than 10,000 miles per annum. Amything other than this you get hit with charges.
|
Many of the banks mirror this sort of deal - we used the Aliance & Leicester a couple of years ago. The advantage of this is that you have freedom to choose your supplier and with the cash in hand you can negotiate the best deal for the car. Also you can get a 48 month deal.
Downside is that you can't just hand back the keys after 36/48 months - you have to find the final payment (called a balloon)either with cash or buy selling the car.
|
IMHO if you can afford to buy the car through a straighforward finance/bank loan then definitely don't go with the PCP. Bank loan seems best option as you own the car from day one, others you're never the car owner until you've paid the final payment. The final payment on PCP's can often be a bit of a nightmare too (no such thing as Guaranteed future value in todays car market) Banks like alliance & leicester /AA loans are offering APRs around 5/6%.
Lots of good discounts around if you look hard enough & are prepared to travel.
|
|
|
_COLON_no_upscale()/cdn.uk.prod.group-mobility-trader.com/images/cas/9c3983c7127cda192a44d67933201adb/ddd73bc328cfe695c63222484eeeffcd.jpg)
