What’s the catch?

The big problem with the Seat is its residual value. It's a small brand and its secondary value is fairly low so the dealership needs to do something to encourage people to buy these cars.

In terms of the low monthly payments this is a very nice offer. But buyers could have a problem when it comes to selling the car - particularly if they want to repeat this sort of offer with another model such as a Japanese car.

Other cars would be worth more on the secondary market so when buyers sell these cars they could pay off most of their original loan and afford a deposit for a better car.

At any time that you settle a car loan agreement you have an amount outstanding to the bank. When you first buy a car, it loses some value straight away and because you borrowed a lot of money to buy it, for the first year it may be that you owe more to the bank than the car is actually worth - this is called negative equity.

With cars that have a high residual value as you pay off your loan, you reach a point somewhere down the line when you get into equity with the vehicle so the car is worth more than the loan. It's likely with this car that the payments are over 60 months - a long period of time and that's why the monthly payments are so low.

Another reason why the dealership would want to find ways to encourage buyers to take this car is that customers often assume that the service and maintenance of a European brand of car like this would be more expensive than for a Japanese car like the Nissan.

This is not necessarily the case at all - and in fact most of the servicing costs for the Seat and indeed any European brand are fairly reasonable. The dealer though knows that people worry about the cost of service and maintenance which is why it has offered it free for three years - so all you have to worry about is whether you like this car.

The three years unlimited service and maintenance is also offered because the dealer recognises that all cars are all built to good quality nowadays. This dealer recognises that no car really costs much anymore to service and maintain and that's another reason why they are offering this deal.

This car has some excellent specifications - you tend to find this with cars like the Seat - when they are not the most popular the manufactures will put on high specifications to encourage people to look at the brand.

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