Interest free credit er no, not really

  v1asco 10:42 22 Apr 06
Locked

The other day I went out to spend loads.

When I got to the store they had a managers offer on for interest free over 5yrs for the car.

The monthly repayments suited my budget better and by the time all the extra equipment had been added I walked out quite content.

Few days later got a call saying can't have the one extra (tyre monitor) without an extra £500 for alloy wheels. Thought this annoying and a ridiculous expense for what I see as a safety feature. So I had to go back to form new contract and was offerred the alloys at half price. Before I did I checked the Companys web site.

My car was advertised on the Companys Web Site at £2000 less with 4 yrs interest free. Please note it cannot be bought over the net but only at a dealership, so is not a special "web" price.

This got me thinking, how can interest free cost more for longer, surely this is interest in one form or another.

I called trading standards who promised to call back.

They didn't before I went back to renew the contract and conditions were not suitable for a postponement.

The good lady at the dealership was surprised when I showed her the Web Print out and explained that there was a premium for 5 yrs interest free.

The dealership was very upfront about everything. They allowed me extra part exchange and as the tyre monitor came with a handling pack or alloys I had the choice of either for no charge. The handling pack is more safety orientated so we picked that. So I opted for the 5 yrs and walked out paying less than originally but a bit more than 4 yrs.

I feel a happy compromise was reached but was still curious about the interest free situation.

Next day trading standards called back and when I explained he understood the problem and we concluded that though there was an 'extra' charge the Dealership was doing nothing underhand but should have pointed out that the 4 year option was available at a discounted price. He was also going to pass the info higher up so they may decide to have a chat with the dealership.

Just a little tale about one of the potential pitfalls when buying goods. No doubt I could have bought my car cheaper elsewhere but this is the 3rd car I have bought from here and have always found them fair.

  spuds 14:08 22 Apr 06

Should this be in Speakers Corner, as it isn't a computer matter!.

Like all finance deals, most have a twist in their tails, and it pays to get all the sums correct from the very start. No finance deal is actually free of interest, because someone, somewhere needs to make some form of profit on money loans. How many dealerships offer free finance, then bang on an administration/handling charge, usually in small print!.

  Forum Editor 16:32 22 Apr 06

and I'll move it over there now.

  v1asco 21:36 22 Apr 06

my mistake. Was thinking along the lines of PC Outlets offering interest free and similar circumstances.

However Spuds, there was no small print, standard paperwork for either transaction. No other charges either, except price, which was still below web sites full price.

Try it this way, if I borrowed £60,000 over 4 yrs at 0% my payments should be £1250 or over 5 years at 0% £1000. Either way it is still £60,000.

My point is interest free is interest free and the same product offerred by the manufacturer for sale at their outlets should be available at that price for the term of payments. If the local franchise/dealership wish to extend the term of payments and call it interest free they should come clean and declare in big print the extra cost or pay it themselves.

As I hope I have demonstrated this is not an attack against the dealers, more an illustration of the grey areas of purchasing.

  anskyber 22:29 22 Apr 06

Well I suppose the obvious question is what would you have paid for the car for cash? Surely the difference is the interest charges.

  v1asco 20:20 23 Apr 06

Thank you, I should have thought of that explanation first.

It is my thoughts precisely if only trading standards agreed

  Starfox 10:57 25 Apr 06

Forgive my ignorance but what's a Tyre Monitor?

  anskyber 11:10 25 Apr 06

It tells you if the pressure is falling inside the tyre, very helpful if you use runflat tyres, ie no spare as BMW and others are employing more and more.

  Starfox 11:23 25 Apr 06

Thanks for that anskybear.

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