To be clear, car dealers will ALWAYS sell credit if they can. It is much better than taking cash. I had an interesting conversation with the owner of a dealership once; he said that finance included commission for the dealer and the salesman. They could offer a better rate if they cut out the dealers commission but rarely cut out the salesman’s commission. That's why it's cheaper to buy directly from a finance company. Your credit rating will also influence the rate you pay. The three main sources of revenue for car dealers are selling cars, selling finance and servicing.
Should you wait 'till December or January to trade in against a second hand car? I don't know but I suspect that the best time to buy a second hand car from a main dealer is April/ May, before they offload them in bulk to someone like Merlin Motor City. Like any business cash flow is king and minimising overheads like interest on overdrafts and credit is also very important.
Your local Toyota or Ford or VW dealer orders a couple of million euro worth of cars at the end of one year for the start of the next. He has to pay his manufacturer for those cars, they are not sale or return. He will negotiate credit terms with his manufacturer, the terms of which will vary depending on his size. After X amount of time he will have to start paying interest on the wholesale value of the cars he has not sold. In other words he has the cars interest free up to X month and after that he has to start paying interest on the ones he hasn't paid for. Most dealers will use the manufacturers credit company (Toyota credit, Ford Credit etc), but some also use other credit companies.
When he has sold his X million euro worth of pre-ordered cars he will be stuck with Y million euro worth of second hands. He will not have cleared any profit from the sale of the new car ‘till he sells the second hand one. That’s why this is a good time of the year to buy a second hand car for cash.
