Discounted Finance Rates - Motor Vehicles

It is that time of the year when motor dealers offer heavily discounted finance rates of around 2% in their attempt to move older model vehicles from their dealerships.
 
These discounted rates are subsidised by the manufacturers so that the vehicles can be sold at the full retail price.
 
You may be better off by not accepting the motor dealership’s finance offer and rather negotiating a discount on the vehicle price.
 
This can be explained with the following examples:
 
  • Car at full retail: The monthly payments on a new car costing $25,000 payable over 4 years with a nil balloon are $555pm. (Based on a rate of 1.9% and with a $700 origination fee normally charged by the dealer)
  • Car at a discount: The monthly payments on a new car costing $23,800 payable over 4 years with a nil balloon are $545pm. (Based on a rate of 5%)
The overall saving by not using the dealer’s finance is $480.
 
Please do not hesitate to contact us to discuss your finance requirements.
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