9 top tips when comparing monthly car offers.
With so many car deals around and so much jargon battered about, how do you know what is right for you.
Having worked in the Motor Trade for almost 15 years both in sales and marketing, the tactics for these firms to “hoink you in” is endless.
In these days of financing everything, monthly costs are now what most firms use to get you interested. Gone are the days of cash price deals, they just aren’t profitable for car dealers.
Here are some top tips to have to hand when comparing monthly car deals:
- Higher initial payments hidden within the small print can make the monthly rental seem really cheap. But when comparing deals calculate the total cost of both the initial rental and the subsequent rentals and divide this by the term, this way it gives you the true cost.
- Don’t be fooled in thinking that a used car maybe cheaper! Financing rates for PCP and leasing is always higher than on a new vehicle and the funders drop the residual value as they don’t know the real state of the vehicle.
- Manufacturers almost always use their high specification models when promoting special offers, you’ll most likely find that the “lead in price” is for the basic model and their will be a “step up” sheet on hand to upsell the customer.
- Everyone forgets the maintenance side of the vehicle when buying new, many offer servicing packages (which can be big profit for dealers). Our top tip here is to ask them what Service A and B would cost and roughly work out a set of tyres by a firm such as Blackcircles. Then calculate this over the period of time. When doing 10–15k per annum, it can work out in your favour.
- Again, look at the small print when it comes to PCP and Leasing. Most deals really should be advertised at 10k per annum, which for most is plenty. But recently many manufacturers and brokers have been advertising vehicles with 5k per annum, you then need to justify the difference between walking or driving.
- Commitment Phobia? There is a huge difference between leasing and PCP, if you aren’t willing to keep the same car for 24, 36 or 48 months then don’t lease or contract hire. You won’t be able to get out of it without huge penalties. PCP is much better giving you the option to settle early, trade in using equity that has hopefully built up in the vehicle or in some cases early terminate once an agreed amount has been paid off.
- So you do have Commitment Phobia, its not an issue then take a look at Short Term Car Leasing or Car Subscriptions. This allows you to take a car for a shorter period of time, almost allowing you to upgrade/downgrade with the changing of the seasons. It works extremely well when it comes to more prestigious cars as there is little difference between long term and short term monthly figures.
- Be careful of 0% finance schemes, they aren’t always as good as they look. Dealers and brokers generally have to pay the finance companies subsidies to offer this deal. It can occasionally work in your favour to negotiate a discount and take it on a traditional Hire Purchase agreement. Just ask the dealer/broker to compare the two quotes and look at what you’d be paying out overall.
- Finally, don’t be swayed by servicing plans, gap insurance and paint protection. These are all major profit areas for a dealer and most sales people will be targeted on hitting quotas. You may get one thrown in, but believe me, you’ll be paying for it somewhere.
Why I started Cocoon Vehicles
I was working for a major car dealer group in the UK and worked from retail sales to fleet to eventually marketing. I’d seen and created many tactics to get sales on the board and hated every second of my initial post of retail sales.
I wanted to be able to offer a service where we were upfront and honest about the vehicles and deals we offer, we had to disclose everything at the beginning so customers don’t get a nasty shock.
When it comes to Contract Hire, it doesn’t work for everybody or every car. German brands are fantastic value for money on contract hire and generally work out cheaper than purchasing, your everyday brands such as Ford and Vauxhall are probably best suited to PCP’s with a guaranteed future value or traditional HP.
Each car and option will have a different residual value and it really is an endless task, but thats why Cocoon differs. I will tell customers if a certain deal doesn’t suit them, if they then go ahead I feel good that I have been upfront.
We also specialise in Car Subscriptions and Short Term Car Leasing. I get bored very easily with the car I drive, so I am a big believer in being able to swap cars often. Its a fantastic and affordable way to change your car without the normal tie’s ins of a long term deal.
Take a look at the Cocoon Vehicles website at https://cocoonvehicles.co.uk