Is group buying the way forward to cut-price cars?
Consumers warned of the dangers of signing up for a lease contract motor deal. Chiara Cavaglieri reports
Sunday 01 April 2012
Group buying sites are now a common weapon in the armoury of savvy shoppers looking to grab huge discounts on everything from theatre tickets to pottery classes. The concept is simple – the sites secure savings from companies on the proviso they will get bulk orders – but can it stretch to big-ticket items such as cars?
Website CarRush.co.uk, dubbed the Groupon for cars, is promising to take the group-buying model to a new level, using it save you up to 40 per cent on showroom cars.
"CarRush is about limited time, limited quantity deals so if you're in the market for these cars the message is to come and get it," says director and co-founder Mark Peatey.
Buying on the site works in one of two ways. First, you can buy a refundable CarRush coupon for between £99 and £199 to secure one of the deals available. Once financed is approved, the car is delivered to your door complete with a full manufacturer's warranty and servicing available from the local dealer.
Alternatively, if you don't see any cars that take your fancy, CarRush also offers "reverse group buying". Here you can sign up as a member and request a deal for a particular car so that once there is enough interest, they can go to dealers and manufacturers to get a deal.
But all CarRush's deals are Personal Contract Purchases (PCPs). With PCP, the car remains the property of the finance company but you make monthly payments for between two and four years with the right to drive the car (with an agreed annual mileage). At the end of the contract, you can either buy the car outright for a previously agreed total cost (the balloon payment), or arrange to return it with no further liability.
The current Peugeot 107 hatchback deal, for example, is priced at £79 a month, paid back over two years. This requires a £1,600 deposit (20 per cent of the recommended price of £7,995) and at the end of the contract you can either buy the car outright for £2,417.50 or return the vehicle having paid £5,313 in total over the four years. As with other PCPs you are limited to a particular annual mileage (6,000) and charged if you go outside of this, in this case at £0.015 per mile.
"The deals look good but this is a very particular sort of deal, with a particular type of financial arrangement which might not be to everyone's taste," says Chas Hallet, What Car?'s editor in chief.
His warnings are echoed by Paul Harrison, the head of motor finance at the Finance & Leasing Association. "As with anything bought online, use caution, and remember your consumer rights," he says. Not only are you protected under the Consumer Credit Act, but distance selling regulations also mean you have 14 days to cancel and return the goods.
It is also important to do your homework, read the fine print and compare other deals to work out whether CarRush represents good value.
"In my experience people can do a lot worse than going to a dealership and haggling," says Mr Hallet. "Any initiative to save car buyers cash is great, but you should never take anything at face value without really looking at the figures with a forensic eye."
- 1 Husband creates spreadsheet detailing wife's 'excuses' for turning down sex
- 2 Apple has installed security backdoors on 600m iPhones and iPads, claims security researcher
- 3 Saneie Masilela, 9, marries Helen Shabangu, 53 years his senior, for the second time
- 4 UK pirates will get four warning letters a year
- 5 Why I'm on the brink of burning my Israeli passport
Malaysia Airlines flight MH17 crash: 'Nine Britons, 23 Americans and 80 children' feared dead after Boeing passenger jet is 'shot down' near Ukraine-Russia border
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
iJobs Money & Business
£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...
£28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...
£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...
£70000 - £90000 per annum + Job Satisfaction: Harrington Starr: Project Manage...
Day In a Page
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar