Motorists financing their new car get better deals than cash buyers Motorists financing their new car get better deals than cash buyers

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.”