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."
Compare with the Independent: See how much you could save by switching credit cards. Compare now
- 1 Refugee facing deportation from Sweden saved by fellow passengers refusing to let plane leave
- 2 The best movies on Netflix: 32 films that will end your endless scrolling
- 3 Naked yoga: the bare truth - it's already big in the US, and has now landed here
- 4 24 people applied for the 'world's toughest job', here are their interviews
- 5 Drugs giant GlaxoSmithKline bribed doctors to boost sales, says whistleblower
David Cameron: 'Jesus invented the Big Society – I'm just continuing God's work'
US Navy christens huge $3 billion destroyer ship USS Zumwalt that appears as a fishing boat on enemy radar
Nigel Farage fatigue? Half of voters ‘immune’ to Ukip’s appeal
Nigel Farage on Have I Got News For You: Ukip leader ridiculed over expenses and party 'fruitcakes'
The food poverty scandal that shames Britain: Nearly 1m people rely on handouts to eat – and benefit reforms may be to blame
Refugee facing deportation from Sweden saved by fellow passengers refusing to let plane leave
iJobs Money & Business
£40000 - £50000 per annum + BONUS + BENEFITS: Harrington Starr: A leading, Cit...
£35000 - £50000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...
£45000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: Corporate Acti...
£350 - £400 per day: Harrington Starr: An opportunity has arisen at a FCA regu...
Day In a Page
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
A newly refurbished one-bedroom flat in the heart of Mayfair, close to Grosvenor Square
A charming four-bedroom house overlooking Burleigh Square Park, close to Thorpe Bay
A three-bedroom farmhouse with a large inglenook fireplace and exposed beams
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds