Thoughts on buy or lease new car, Technology changing fast

[FinanceDude]

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Originally Posted by rjk514 Check out reports from new car show, see a lot of electric/gas talk by 2009, at lower costs than todays cars...another push to lease for 2 yrs or so then see what is going on in the marketplace...a lot of new styles and concepts, and my thought is that it will happen fast as the American public will demand that car mfg's build cars that are gas misers...

Or just buy a stick shift corolla that gets 40 mpg, and be done with it...........

[lazygood4nothinbum]

or this one has some nice technology you might enjoy http://tinyurl.com/ykwny7

0-60 in 5.5 with a v6 turbo at 300 hp woof

[laurence]

So DW and I bought a 2005 Volvo S60 from the dealer in December of '05. It was his courtesy car, and it had about 7500 miles on it. Retailed for 30k+ and we got it for ~19.5k. Full warranty, free oil changes, free courtesy car if it needs overnight work (which it hasn't yet, thankfully), and despite being a 5 cylinder (Volvo has to be different, eh?) I get 28 mpg combined in the worst traffic in San Diego county (78 east to 15 south, for those who know). I get well over 30 on the highway and the engine packs plenty of horses ( 177, I believe). My plan is to keep this car until I can get a good deal on a plug in hybrid model that gets 100 mpg, however long that takes.

[rs0460a]

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Originally Posted by FinanceDude It is??

Yes. Floor Plan charges . The dealer "buys" the car from the factory, and takes a short term loan to cover the value of the car until it is sold by the dealership. This charge (interest only) usually is due the 1st of the month.

Most folks forget that the dealer does not "hold inventory" for the factory. The factory actually "sells" the vehicle to the dealer. If the manufacture delivers a vehicle, it is already paid for (either by the dealer, or a special order from a customer who has ordered through the dealer).

Floor Plan charges (e.g. interest) could be funded by a financial arm of the manufacturer (such as Ford Credit) or a local bank. Depends what the best deal is.

That's why the dealer will give you a slight break the last few days of the month. He knows he has a "bill" coming due...

- Ron

[FinanceDude]

Quote:

Originally Posted by Ron'Da Yes. Floor Plan charges . The dealer "buys" the car from the factory, and takes a short term loan to cover the value of the car until it is sold by the dealership. This charge (interest only) usually is due the 1st of the month. Most folks forget that the dealer does not "hold inventory" for the factory. The factory actually "sells" the vehicle to the dealer. If the manufacture delivers a vehicle, it is already paid for (either by the dealer, or a special order from a customer who has ordered through the dealer). Floor Plan charges (e.g. interest) could be funded by a financial arm of the manufacturer (such as Ford Credit) or a local bank. Depends what the best deal is. That's why the dealer will give you a slight break the last few days of the month. He knows he has a "bill" coming due... - Ron

I was being facetious.........I worked in the industry for 7 years, and know all about paying "juice" and other various things.............

Most of the time, the dealer gets 90 days of "free financing", and then there's a monthly credit carrying cost to the dealer (juice)........most dealers try to sell the cars that are costing them extra dough each month first. As far as dealer holdback, it's only credited to the dealer 4 times a year, so there's often an imbalance on the dealer's balance sheet in months where the "juice" is high (aged inventory), and the credit for holdback back to the dealer to balance the books.......

In addition, many dealers belong to dealer groups that do local advertising, or are part of an advertising program through their zone that raises the true invoice cost of the car.........but I digress.

I believe you can get a good deal any time you want, unless the car is a "must have" with a 3 month waiting list...........

[F M All]

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Originally Posted by FinanceDude I believe you can get a good deal any time you want, unless the car is a "must have" with a 3 month waiting list...........

Except sales quotas and manufacturer's incentive schemes usually end at the end of a month.

When we bought our Beetle, a couple of years ago, the salesman had to sell 2 cars by the end of April to make his number, which would make his manager's number, which would get the dealership some extra kickback. They were ready to deal.

[FinanceDude]

Quote:

Originally Posted by F M All Except sales quotas and manufacturer's incentive schemes usually end at the end of a month. When we bought our Beetle, a couple of years ago, the salesman had to sell 2 cars by the end of April to make his number, which would make his manager's number, which would get the dealership some extra kickback. They were ready to deal.

if you have the knowledge, you can deal anytime............

[Nords]

Quote:

Originally Posted by F M All Except sales quotas and manufacturer's incentive schemes usually end at the end of a month. When we bought our Beetle, a couple of years ago, the salesman had to sell 2 cars by the end of April to make his number, which would make his manager's number, which would get the dealership some extra kickback. They were ready to deal.

Or at least that's what they told you. Another reason I don't like setting foot in a car dealership.

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Originally Posted by FinanceDude if you have the knowledge, you can deal anytime............

A long-term poster once mentioned that the car dealer told him "You're really good at negotiating!" Another long-term poster let the air out of his ego by pointing out that the goal shouldn't be getting compliments from a car dealer, it should be getting such a good deal on the car that the dealer gives you the type of dirty look that says "I know you poisoned my dog but I just can't prove it"...

[F M All]

I thought someone would say something like that! At least I got a better deal than he was prepared to do a couple of weeks earlier.
Was his story the truth? I think I've commented enough on (un)professional liars this morning.........

[FinanceDude]

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Originally Posted by F M All I thought someone would say something like that! At least I got a better deal than he was prepared to do a couple of weeks earlier. Was his story the truth? I think I've commented enough on (un)professional liars this morning.........

Hard to know..........and here's a real life example. A friend of mine at the time was a GM at a Chrysler dealership. He only calls me when "the manufacturer's are being stupid"........... So, I get a call from him in February 2004. If his dealership sells 30 minivans that month, the mnaufacturer gives them $1500 per vehicle for each van sold. The dealer has the option to pass it on to the consumer or keep it.

Bottom line, I payed invoice, less a $6000 rebate, less the $1500 dealer cash..........and although I was not looking, I got rid of my 99 Grand Caravan with 130,000 miles on it..........

I'll bet some other folks didn't get the $1500, but if push came to shove, the dealer would give it away to sell a car..........

[laurence]

When I look at your car I'm guilty of at least 2 of the seven deadly sins, lust and envy!

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Originally Posted by Laurence When I look at your car I'm guilty of at least 2 of the seven deadly sins, lust and envy!

When I was your age, I was not even close to driving the nice Volvo that you are currently driving. So you are in pretty good shape! I was also wishing for a better ride. This was one of my motivations for saving in my 30's and 40's. Now that I'm an old fart of 55, I can splurge on cars! 8)

[laurence]

You are right, I just remember what I'm saving for - believe me, I'll be splurging in my 50's, too!

[Nords]

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Originally Posted by Cut-Throat Well.........I just bought a car in New Jersey. I live in Minneapolis. I saved about $3 Grand.

Yeah, but you had to fly to New Jersey and then, against all logical thought & bodily instincts, drive back across the northeast/northcentral winter US to get back to more winter... sure hope those leather seats included heating coils.

[FinanceDude]

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Originally Posted by Cut-Throat Well.........I just bought a car in New Jersey. I live in Minneapolis. I saved about $3 Grand. - If you are buying a car that is in high demand, it may not matter what negotiating tactic you use. My local dealer told me to go to N.J. because he could sell the car to someone else. So I did! East coast has more competition among Lexus Dealers. - Here is the new ride! [img width=750 height=562]http://img.photobucket.com/albums/v230/Cutthroat-trout/NewRide.jpg[/img]

Nice car..............GS350

Yup!

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Originally Posted by Nords Yeah, but you had to fly to New Jersey and then, against all logical thought & bodily instincts, drive back across the northeast/northcentral winter US to get back to more winter... sure hope those leather seats included heating coils.

Heated seats as well as Air conditioned seats!

[FinanceDude]

Those cars are nice..........

I read your posts about saving money on a Lexus by going East Coast? Pretty common.

A friend of mine works at a Lexus dealer here. He told me that Lexus has on average a 17% markup from invoive to sticker. If we extrapolate, that means the involce on a $50,000 Lexus is roughly $41500. With an $8500 markup, there's a lot of room to deal. However, a LOT of people pay sticker for them, so a lot of dealers feel they don't need to budge much. Let's say the Minneapolis dealer wanted $47500, and the NJ dealer did it for $44500. They both made money, but the one that's looking for volume will deal more, or have to.

Did you try Chicago?

[MasterBlaster]

I wonder if you really had to go all the way to New Jersey or not. ?

Perhaps walking into the local dealer, offering your reasonable but lowball price and saying no to counteroffers would work.

Some dealers don't really start negotiating in good faith until you are headed out of the sales office, heading towards your (previous) car and on the the way home.

Some of them have silly rules like you have to have touched the exit door handle before you get the good price. This is for real beleive it or not.

One of my best deals was negotiated a week later on a car that the owner "just couldn't get close to" and that we were "way far apart" on.

[FinanceDude]

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Originally Posted by Cut-Throat I tried Chicago and they were $1500 higher than Jersey. I tried Philly, Pittsburgh, St. Louis, Denver, Phoenix, Chicago, New York Ended up getting the car from the largest Lexus dealer on the east coast. My car's sticker was $52800, the invoice was $46200 - I closed the deal at $47K

I'll bet it cost you less than $3000 to fly there, drive back, and enjoy life along the way................

You could afford the time to shop the US.........not mnay folks can...........