How to Save Thousands of Pounds on Your Next Car

Numerous automobile purchasers opt to finance their purchase, but what many are unaware of is an obscure method to outsmart the dealers and save substantial amounts on a new vehicle. This tactic, completely permissible under the Consumer Credit Act, allows customers to leverage the incentives provided by car dealers for financing, and subsequently terminate the agreement within a 14-day cooling off period, settling the entire sum in a single payment.

By adopting this approach, customers can still avail themselves of the benefits and reductions extended by car dealers to promote financing, such as deposit contributions, without being subjected to the exorbitant interest rates associated with borrowing.

The crux lies in entering a car finance arrangement, such as a personal contract purchase (PCP) or hire purchase agreement (HP), assenting to the terms, and then annulling the agreement within the cooling off period. Upon cancellation of the finance agreement and full payment, customers can retain the deposit contribution and any supplementary offerings provided by the dealer, such as complimentary servicing or an extended warranty.

One reader, Chun, recently employed this tactic to economise approximately £2,500 on a newly acquired BMW financed purchase. He rescinded the agreement within the cooling off period, disbursed the remaining sum in full, and retained the deposit contribution and additional features without incurring supplementary expenses. He characterised the process as straightforward and expressed astonishment that more individuals are not cognisant of this cost-saving stratagem.

Whilst this loophole is entirely legitimate, there are some caveats to consider. For instance, customers must have the full sum available for a lump sum payment, and those financing a car for over £60,250 will not benefit from the 14-day cooling off period under the Consumer Credit Act. Furthermore, certain finance agreements may encompass clauses mandating customers to adhere to the agreement for a specific duration to receive the benefits, therefore, purchasers should meticulously scrutinise the contract prior to attempting this methodology.

This loophole represents a valuable resource for discerning automobile buyers seeking to economise on their acquisition, but it is imperative to thoroughly comprehend the process and potential risks before proceeding. By seizing the opportunity presented by the 14-day cooling off period, customers have the potential to accumulate substantial savings on a new car without incurring steep interest rates associated with conventional finance arrangements.