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Old 08-24-2011, 05:02 PM   #41
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Originally Posted by Coolius View Post
Why not present a counter offer - if you refuse the loan and pay cash, can they knock off another 3-5% off the price of the car?

They must have a cost of money, and a cash offer is usually very attractive compared to a zero interest loan.

However, you have to watch out in case they jack up the price of the car to "compensate" for the loss in financing revenue.

If they refuse the reduced cash offer, you can always revert back to the loan.

I figure it's worth a try - economy sucks nowadays and car buyers are not plentiful around ( especially folks who can offer cash up front ).
Actually, the dealer doesn't give a rip if you pay cash. In fact, they often get paid an additional kick-back if you finance the deal through them. Like a commission for doing the loan.

I'd take the loan, and keep my cash in the bank. Hell, we took a 1.9% loan last year, so that we could keep our cash in an IRA.

On another note: I've used and recommended the USAA buying service several times. Works great. Highly recommended.
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Old 08-24-2011, 05:16 PM   #42
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Actually, the dealer doesn't give a rip if you pay cash. In fact, they often get paid an additional kick-back if you finance the deal through them. Like a commission for doing the loan.

.
Actually I spoke at length to the financing guy about pro/con on the 0% deal and he said that the dealer would rather have cash than have to hassle with Toyota's financing arm in Atlanta. He said if he was buying a car today that getting the 0% deal was a no brainer every time. As an employee though, he is spending time (wasting time?) creating paperwork that will not help the dealer a lick.

My calculations are that I may end up with about $2-300 more after 3 years. Can't turn down $300.
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Old 08-24-2011, 08:04 PM   #43
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Yes I went thru AutoCircle @ USAA (going directly to the fleet mgr is much easier), but that does not stop me from trying to negotiate a bit if I can.
MickeyD, were you successful in negotiating down with the dealer once USAA had played its part?
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Old 08-24-2011, 09:15 PM   #44
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MickeyD, were you successful in negotiating down with the dealer once USAA had played its part?
The dealerships that I spoke to seemed to imply that the USSA rate was THE rate. But they are still salesmen with a lot full of cars to move, so I used that knowledge to wragle a few freebies like free floor mats ($200 value) and a full tank of gas (?$). I tried to get free extra tinted windows but that fell flat.
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Old 08-25-2011, 07:41 AM   #45
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I closed the deal today. There is no rebate if you decline it on this model. A FICO of 720 is required to get a 0% deal. I had never known what my FICO score was, so that was enough to get me to apply. My FICO is 820. The guy said that was one of the highest that he had ever seen in the several years that he had been doing this. So I'm not too impressed with FICO scores if mine is that unique.
820 is very high, anything over 800 is in the top couple of percent.
I don't plan on buying a new(er) car for a couple of years. 73ss454 comments are similar to what I've heard but very helpful to know.
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Old 08-25-2011, 08:22 AM   #46
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I'd take the loan, and keep my cash in the bank. Hell, we took a 1.9% loan last year, so that we could keep our cash in an IRA.
Especially if it is in a TIRA.

I made the mistake shortly after retiring when I purchased my last vehicle. While I have $500/mo. for car replacement in my retirement budget, when it came time to buy, I thought I have the money (in a TIRA MM account), why not just use it?

It turned out that the withdrawl bumped me up into the next tax bracket and additional FIT at the end of the year ...

Next time (assuming the rate is low enough), I'll take the financing. Since I don't purchase cars that often (my last trade was 18 years old), I'll have a couple of decades to worry about it ...
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Old 08-25-2011, 08:57 AM   #47
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Especially if it is in a TIRA.

I made the mistake shortly after retiring when I purchased my last vehicle. While I have $500/mo. for car replacement in my retirement budget, when it came time to buy, I thought I have the money (in a TIRA MM account), why not just use it?

It turned out that the withdrawl bumped me up into the next tax bracket and additional FIT at the end of the year ...
Yeah, managing cash flow from retirement accounts can be a biggie. I'm not there yet, but my general plan will be to withdraw as much as I can while exhausting the low tax brackets (currently, say, up to 15%) and not disqualifying myself from benefits that will likely be means-tested by then. For example, if in late December I see I've left $5,000 unused in the 15% bracket (or have about $5000 to go before I bump into means testing), I'd withdraw another $5,000 or close to it -- and move it to a taxable account as needed. That would have the added benefit of reducing future RMDs.
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Old 08-25-2011, 10:08 AM   #48
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Forgot to respond, but it looks like it is to late as the deal is done....


But I got a 0% rate from a furniture company.... but the fine print was that it was 18% and as long as I made all payments on time etc. etc. for the 4 years I got it all back.... I was surprised how quickly the balance owed grew (even though I am an accountant, watching it on stmts is different than just calculating it)...

I also set mine up for auto pay, but put the due date two weeks early so that I could make sure I made a payment in case the bank screwed up... finished making the payments earlier this year and got a credit for $1800...
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Old 08-25-2011, 10:26 AM   #49
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Why not just buy a used car and save a ton of cash?

Sure, 0% sounds great. But we all know that something that sounds too good to be true - isn't. Someone is making profit in there somewhere. So why bother trying to play their games at all? Why not buy the same car, a year or two old, with 20-30k miles on it, and skip the depreciation, fees, and games altogether?
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Old 08-25-2011, 10:26 AM   #50
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I also set mine up for auto pay, but put the due date two weeks early so that I could make sure I made a payment in case the bank screwed up... finished making the payments earlier this year and got a credit for $1800...
What was the credit of 1800 for?
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Old 08-25-2011, 10:28 AM   #51
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Why not just buy a used car and save a ton of cash?

Sure, 0% sounds great. But we all know that something that sounds too good to be true - isn't. Someone is making profit in there somewhere. So why bother trying to play their games at all? Why not buy the same car, a year or two old, with 20-30k miles on it, and skip the depreciation, fees, and games altogether?
I agree with buying a used car but sometimes people just want a new car. There are no games when the manufacturers finance arm is offering a program such as 0%. It's a tool to move more cars and that's all.

Where in the world could profit be at 0%?
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Old 08-25-2011, 10:50 AM   #52
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I closed the deal today. There is no rebate if you decline it on this model. A FICO of 720 is required to get a 0% deal. I had never known what my FICO score was, so that was enough to get me to apply. My FICO is 820. The guy said that was one of the highest that he had ever seen in the several years that he had been doing this. So I'm not too impressed with FICO scores if mine is that unique.
Wow. Impressive. I've never even heard of a credit score that high.

How's your buying new compare to buying a car that's 2-3 years old, but not yet out of the three-year warranty? Some Toyotas have practically a 0% depreciation curve over that period.

Now that the transportation problem is solved, what are you going to do with your mortgage? Keep the cheap interest rate, or pay it off? Just kidding.
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Old 08-25-2011, 10:55 AM   #53
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The 0% loan is usually instead of a rebate you could receive for paying cash. You can look at Edmunds.com to see what the current rebates and offers are for the particular model you're interested in.
This is what I was thinking. Find the lowest, cash, price with rebates. If they are willing to finance AND knock off even more, go for it.

Last year, I bought a new car for cash w/rebates and they'd knock off another $1000 with financing. I financed the minimum, $5000, and paid it off in the minimum time, 60 days. Net savings for financing: ~ $965
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Old 08-25-2011, 11:05 AM   #54
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Wow. Impressive. I've never even heard of a credit score that high.
Mine is 831............do mickeyd and I get a free decoder ring or something, maybe a GI Joe soldier?
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Old 08-25-2011, 11:16 AM   #55
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Mine is 831............do mickeyd and I get a free decoder ring or something, maybe a GI Joe soldier?
Mine dropped from 833 to now 811. I don't know what happened. Maybe it was that new credit card which will never carry a balance.

I prefer a Barbie.
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Old 08-25-2011, 11:16 AM   #56
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[My FICO] is 831............do mickeyd and I get a free decoder ring or something, maybe a GI Joe soldier?
Are you guys actually bragging about who has the high score in "borrowing money?"

I look forward to the day when I haven't had to borrow money from anyone in years, and my score is 0.

But for the record, at the moment, it's in the 800's.
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Old 08-25-2011, 11:22 AM   #57
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What was the credit of 1800 for?
The were charging me interest all along the way... that was the accrued interest that was 'forgiven' since I paid all payments on time....
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Old 08-25-2011, 11:27 AM   #58
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Why not just buy a used car and save a ton of cash?

Sure, 0% sounds great. But we all know that something that sounds too good to be true - isn't. Someone is making profit in there somewhere. So why bother trying to play their games at all? Why not buy the same car, a year or two old, with 20-30k miles on it, and skip the depreciation, fees, and games altogether?
Not in this case. They are playing on the averages that most people will keep the loan for the whole term. Very few of us can pay it off early like that -we win.

I doubt there is much savings in a 1 or 2 YO car. That's one or two years less of warranty, inevitable repair/maintenance coming 1 or 2 years earlier - and personally, if I'm going to keep a car longer than ten years, it is kinda nice to have it be brand new for that ear or two. Plus, all else being equal, you are going through the process every 8 years rather than 10. No thanks.



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Are you guys actually bragging about who has the high score in "borrowing money?"

I look forward to the day when I haven't had to borrow money from anyone in years, and my score is 0.

But for the record, at the moment, it's in the 800's.

The score is more than for borrowing money (which they aren't doing since, they paid it off), credit scores can affect insurance rates, maybe even your chance to get a 2% reward credit card.

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Old 08-25-2011, 11:29 AM   #59
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Are you guys actually bragging about who has the high score in "borrowing money?"
I look forward to the day when I haven't had to borrow money from anyone in years, and my score is 0.
But for the record, at the moment, it's in the 800's.
It's not about how big it is. It's how you use it.
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Old 08-25-2011, 11:31 AM   #60
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Are you guys actually bragging about who has the high score in "borrowing money?"

I look forward to the day when I haven't had to borrow money from anyone in years, and my score is 0.

But for the record, at the moment, it's in the 800's.
It has nothing to do with what you borrow. It's your record of payment that has the most impact.

Heck, I have no outstanding loans nor any earned/unearned income and my score is above 800 (not bragging - I just paid my debts on time and still do for monthly CC payments - paid in full each month).
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