New car buyers opting to purchase on finance will receive on average £1,075 more in discounts from their dealer than those buying outright in cash, new research from What Car? has revealed.
What Car?’s mystery shoppers found the average discount on a new vehicle bought on finance at the beginning of May this year was £3,670. However, dealers were only willing to discount models by £2,595 when buying with cash – giving finance buyers a £1075 windfall.
Finance terms are further incentivised through dealer deposit contributions – payments made by dealers towards the deposit on the vehicle – with the average contribution standing at £1,619.
The past 12 months have seen finance discounts on new models rise from £3549 to £3,670, and manufacturers have also increased the volume of 0% interest rate deals on offer by a third.
Attractive low-rate finance deals are clearly effective. What Car? found that more than a third of new car buyers would consider a car that wasn’t on their initial shortlist if they saw it advertised with interest-free credit.
“Finance plays a huge role in the modern car buying decision – the latest figures show seven in 10 private new car purchases are made on finance,” Steve Huntingford, the Editor of What Car?, said. “We are also seeing a larger number of dealers offering 0% finance terms. With an average deposit contribution of £1,619, this means it’s often cheaper for new car buyers to purchase their next vehicle on finance than outright with cash.”