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Motorists financing their car receive £1K more in discounts than cash buyers

Motorists financing their car receive £1K more in discounts than cash buyers

New car buyers opting to purchase on finance will receive on average £1075 more in discounts from their dealer than those buying outright in cash, new research from the UK’s leading consumer champion and new car buying platform, What Car?, reveals.

What Car?’s mystery shoppers found the average discount on a new vehicle bought on finance at the beginning of May this year was £3670. However, dealers were only willing to discount models by £2595 when buying with cash – giving finance buyers a £1075 windfall. 

Research by What Car? also reveals 18.8% of drivers do not understand the difference between Personal Contract Purchase (PCP) and conventional Hire Purchase (HP), risking unexpected fees and charges as a result.

PCPs typically feature lower monthly instalments in favour of a larger final payment, with the expectation of using the car’s future resale value to cover the cost. However, buyers using this method are subject to mileage restrictions, with fees incurred for exceeding the agreed terms.

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 £1619. Some premium models, including the BMW 760Li xDrive were offered with more than £17,000 towards the deposit. 

The past 12 months have seen finance discounts on new models rise from £3549 to £3670. Manufacturers have also increased the volume of zero percent interest rate deals on offer by a third. As of May 2019, there were more than 840 make, model and trim deals available with zero percent finance. Manufacturers such as Ford and Volvo dominate the sector with 86% and 34% of their model ranges available with zero percent terms. 

Attractive low rate finance deals are clearly effective. What Car?’s research found 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 terms available. 

Steve Huntingford, editor of What Car?, said: “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*. We are also seeing a larger number of dealers offering zero percent finance terms. With an average deposit contribution of £1619, this means it’s often cheaper for new car buyers to purchase their next vehicle with zero percent finance than outright with cash.”

For more information about vehicle finance, visit:

Top 0% finance discounts**

Make and Model



TP Finance OTR


Deposit Contribution

% TP Savings

Jaguar XJ

3.0d V6 Luxury






Audi A8

50 TDI Quattro






Ford Kuga

1.5 TDCi Titanium Edition






Peugeot Traveller

1.5 Blue HDi 120 Business Standard






Volvo V40

D2 Cross Country






Volvo S90

2.0 D4 Momentum Plus






Jeep Compass

1.4 Multiair 140 Limited






Peugeot 308 SW

1.5 Blue HDi 130 Active







S350d L AMG Line






Toyota Yaris

1.0 VVT-i Icon






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