Revealed: The new cars that are actually cheaper to buy on finance

Time 12:03 pm, July 9, 2020

People can save more than £10,000 buying a new car on finance rather than paying by cash, according to research by What Car? 

After checking more than 6,000 Target Price offers, the new car buying platform found that 14 per cent of new cars – around one in seven – actually cost customers LESS with a finance deal!

Top of the savings list was the BMW 7 Series M760Li, which was a whopping £10,247 cheaper on PCP. At the other end of the scale, customers could save £883 on the Peugeot 108 1.0 72 Allure.

Other bargains included the Volvo S60 2.0 B5 R Design (£2,019 saving on finance), the Vauxhall Grandland X 1.5 Turbo D Griffin (£1,500), the Volkswagen Touareg 3.0 V6 TDI 231 4Motion SE (also £1,500), and the Ford Focus 1.0 Ecoboost 125 Titanium X (£1,250).

The savings take into account interest payments plus the final balloon payment, as well as dealer deposit discounts.

Pat Hoy, head of What Car?’s Target Price mystery shopping team, said: ‘Buying on finance works out cheaper when the car maker’s deposit contribution is greater than the maximum discount offered for a cash purchase – as indicated by our Target Price saving – and the finance interest rate is either zero or low enough not to cancel out that saving.’

What Car? said making some vehicles cheaper on finance allowed car makers to discount a new model without making it obvious they were looking to boost sales. Manufacturers also preferred to get customers on PCP deals because of the repeat business when finance agreements ended.

What Car? editor Steve Huntingford said: ‘Before buying, consumers should work out the total amount payable for a car, both as a cash deal and on finance, and compare the two to ensure they pay the lowest price.

‘Our New Car Buying platform allows buyers to compare both cash and finance offers on their car, giving them a quick comparison tool to determine which is the best offer for them.’

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John Bowman's avatar

John has been with Car Dealer since 2013 after spending 25 years in the newspaper industry as a reporter then a sub-editor/assistant chief sub-editor on regional and national titles. John is chief sub-editor in the editorial department, working on Car Dealer, as well as handling social media.

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