When customers want to know how much the monthly payment is on a chosen vehicle, the salesperson gives them a monthly inflated figure that represents a higher vehicle purchase price thus creating a negotiation margin.
If the customer (unknowingly) agrees to the inflated monthly payment, the dealer then has a number of ways to get his hands on the additional money.
Frequently the customer can be talked into inclusive high-priced (and high-profit) items like Paint Protection, Extended Warranties, Mats or Car Alarms. Your choice “at little-or-no extra cost.” sound great doesn’t it.
Or the customer might be charged a considerably higher interest rate on their finance package; this allows the dealer to pocket the additional finance charges.
This scheme is frequently used to attract customers to car leases: Dealers simply quote inflated monthly loan payments to make a conventional purchase look a lot more expensive than a lease.
How do I prevent it happening to me?
- Once the all important car has been decided upon, ask for a copy of the Consumer Information Notice (CIN).
- The CIN cash price must include GST, registration and licensing costs. These were often called on-road costs.
- If there is money owed on the car, the security interest box must be ticked. If it’s not ticked and there’s money owing, then it’s not your problem.
- Take note of the vehicle year box this will indicate the year of first registration anywhere in the world for all vehicles first registered after January 2007. For older vehicles, the vehicle year can be either the year of first registration or the year of manufacture or the vehicle year according to the car-maker.
- Once you have a copy of the CIN negotiate down from the physical price shown.
- Once agreement has been reached complete only the vehicle offer and sale agreement (VOSA) and sign then sign the Consumer Information Notice (CIN) take both copies and leave the dealer a small deposit.
- Contact your local Finance Broker and bespoke the Finance and Insuance product that best meets your needs in terms of budget.
- Fax or scan a copy of the VOSA and CIN to your Finance Broker, this will allow the documentation to be raised, and your new vehicle checked that the dealer has finance cleared it for any outstanding finance.
- The documentation can be signed at your leisure prior to collection of your new vehicle and the Dealer paid.
- Collection of your new vehicle without the pressure, enjoy the experience you don’t do it every day!
We hope you are now more motivated to be aware of what can go on when seeking a new car and where your money is going and to really understand how to get the best deal to suit your finances. After all, that is what Bespoke Money is here for.