Understanding car finance

[legal]

I have never bought a car on finance before. I am sure, I am missing something.

Retail Finance Offers

So cash price for buying this car is £38025.00

But if I buy on finance its only £36183, how come?? Can someone please explain?

Deposit: 5799
36 months * 429 : 15444
Optional final payment : 14940
Total: 36183

What about 4.9% APR interest??

[ASB]

I have never bought a car on finance before. I am sure, I am missing something.

Retail Finance Offers

So cash price for buying this car is £38025.00

But if I buy on finance its only £36183, how come?? Can someone please explain?

Deposit: 5799
36 months * 429 : 15444
Optional final payment : 14940
Total: 36183

What about 4.9% APR interest??

You will probably find something like "dealer deposit contribution" on the quote and a total amount financed.

[legal]

You will probably find something like "dealer deposit contribution" on the quote and a total amount financed.

Yes there are two kinds of deposits if you click on the link in my original post.

Dealer deposit contribution £2,274.15
BMW UK deposit contribution £3,000.00

But this is what they are paying, so why would someone buy for cash and what about finance interest?

[malvolio]

Dealers make a lot more money from finance arrangement than they do from car sales so they try to make it look attractive. However, the stated cash price on that example is £41k, not £36k...?

Also did you miss the "optional final payment? Don't pay that and you have to give the car back; you either give them the money and keep the car or trade the car against your next one, in which case its value is reduced by that amount.

That's also worked on 10k miles a year, where the average is 12k. You may only do 10k, which is fine, but it starts getting expensive to go over the limit.

[legal]

Dealers make a lot more money from finance arrangement than they do from car sales so they try to make it look attractive. However, the stated cash price on that example is £41k, not £36k...?

Also did you miss the "optional final payment? Don't pay that and you have to give the car back; you either give them the money and keep the car or trade the car against your next one, in which case its value is reduced by that amount.

That's also worked on 10k miles a year, where the average is 12k. You may only do 10k, which is fine, but it starts getting expensive to go over the limit.

Sorry mate, didn't understand where you got £41k from?


Retail Finance Offers

On the road cash price* £38,025.00

[malvolio]

Sorry mate, didn't understand where you got £41k from?


Retail Finance Offers

On the road cash price* £38,025.00

Ignore that, the bit that matters is total cash payable... That's what you have to pay out.

The car itself never belongs to the dealer, all they ever see is a sum to pay to BMW and another sum for their profits (what BMW gets is either your money less that amount if you pay cash, or another lump sum from the finance company, probably equal to the cost of the car to them) Since it's all worked on the wholesale price of the car, not what the brochure says, they can say the on the road price is anything they like. It's how much it costs you that's the important bit.

[malvolio]

Ignore that, the bit that matters is total cash payable... That's what you have to pay out.

The car itself never belongs to the dealer, all they ever see is a sum to pay to BMW and another sum for their profits (what BMW gets is either your money less that amount if you pay cash, or another lump sum from the finance company, probably equal to the cost of the car to them) Since it's all worked on the wholesale price of the car, not what the brochure says, they can say the on the road price is anything they like. It's how much it costs you that's the important bit.

And £41k is a lot to pay for something that's actually not as good as the current Mondeo. At least get the six cylinder diesel, that is worth the money.

[ASB]

Yes there are two kinds of deposits if you click on the link in my original post.

Dealer deposit contribution £2,274.15
BMW UK deposit contribution £3,000.00

But this is what they are paying, so why would someone buy for cash and what about finance interest?

Missed that link.

discounts 5274.15

Add 'em in. And it'll be 35 payments. Then it adds up.

No, you wouldn't pay cash. You'd pay cash based on a minimum of the 5274 discount.