0.00% Loan Interest Rate

[73ss454]

My last two car buying experiences were....experiences.-ERD50

You should try selling them.

 

[ERD50]

Originally Posted by ERD50
My last two car buying experiences were....experiences.-ERD50

You should try selling them.

heh-heh - I'm sure it's a pain on that end also. No, I wouldn't chose to sell cars for a living, it just isn't in my 'skill set'.

I know there was a thread on this maybe a year ago, I should go look it up I guess. But it just seems to me so much of the pain of transacting a car purchase is self-inflicted.

I can buy many things in the multi-thousand $ price range easily and confidently, often with a few mouse clicks. Something 10x more expensive might take a bit more effort, but why should it entail so much more frustration - especially for something so many people 'love' (I don't, it's just transportation).

-ERD50

 

[73ss454]

It all comes down to one thing, Price!

If you were willing to pay the price that you are told it would make the whole process easy, no?

How many other things do you buy where the price is the problem? I've always found that car buyers in most cases don't know where the end is. This causes a problem for the buyer and the seller. Even when I pulled out the invoice no one want's to believe it's real. There in is the problem.

If folks would just walk in and pay the asking price it would would be a piece of cake.

 

[brewer12345]

It all comes down to one thing, Price!

If you were willing to pay the price that you are told it would make the whole process easy, no?

How many other things do you buy where the price is the problem? I've always found that car buyers in most cases don't know where the end is. This causes a problem for the buyer and the seller. Even when I pulled out the invoice no one want's to believe it's real. There in is the problem.

If folks would just walk in and pay the asking price it would would be a piece of cake.

The problem is that the auto retailing industry has made price discovery tough for the customer, at least in most cases. I have bought at traditional dealerships (games galore to find the price) and I have bought at a no-haggle dealership. Huge difference in customer experience. Its not the dealers' fault, it is the way the industry is set up. The flat price services like those offered by USAA, Costco, etc. are a way to get past the usual BS to get to price discovery quickly.

 

[73ss454]

Dealers love USAA,Costco buyers etc.. Makes the whole thing very easy.

At least the customers believe USAA, Costco and others. When the dealer shows the invoice for proof of cost no one believes it. I'm not saying everyone, but most.

Funny thing is that the prices customers get from buying services are mostly higher than the dealer prices. Just adding another middle man, but hey, what ever works.

 

[ERD50]

It all comes down to one thing, Price!

If you were willing to pay the price that you are told it would make the whole process easy, no?

How many other things do you buy where the price is the problem? I've always found that car buyers in most cases don't know where the end is. This causes a problem for the buyer and the seller. Even when I pulled out the invoice no one want's to believe it's real. There in is the problem.

If folks would just walk in and pay the asking price it would would be a piece of cake.

Except there is no 'asking price'. There is MSRP and Invoice, but those don't mean much as there are other ways that dealers make money (sales incentives, service, financing, etc).

But I don't want to go to the effort of figuring out a company's business model. I don't have the info I need to do it anyhow. But with most other products, if I see product A sells for $YYY and product B sells for $ZZZ, I make up my mind based on those prices, features, quality, etc. And if it is advertised for $ZZZ, I don't go there to find they added another $ZZ 'worth' of extras I didn't ask for and don't want.

-ERD50

 

[73ss454]

The asking price is always MSRP but if you ask for a price from a salesperson one will be provided for you. At that point is where the problem starts. Is that the price you are willing to pay? I doubt it!

You are correct that most dealers add items that people don't want in most cases and add to the MSRP. In an area where there are a lot of dealers it makes it harder for the dealers to play games as the other dealers will eat them up.

Most any info you need is on the internet today so the buying process today is easier than ever. Customers who have done their homework are the best customers. They know what cost is and in most cases know that the dealer has to make a reasonable profit. Who used to say "the educated customer is our best customer" I think it was Sy Sims who said that. Maybe he's out of business by now. (heh)

 

[chinaco]

I used USAA's buying service earlier this year to buy my truck and was very happy with the deal. I paid less than the price Edmund's said was the going rate and enjoyed not having to spend hours engaging in tag-team negotiations with the salesman and his manager.

Would you mind sharing... How much lower than the Edmund TMV did USAA negotiate (on a % basis)?

 

[REWahoo]

Would you mind sharing... How much lower than the Edmund TMV did USAA negotiate (on a % basis)?

Nothing dramatic - about [-]3%[/-] 1% under TMV.

EDIT: I came up with the 3% number by looking at the current TMV vs. what I paid through USAA. After I posted I took a look at the window sticker off my truck and realized the current list price shown on Edmunds is higher by a little more than $1k due to a price increase from GM. Using the correct numbers I now come up with about a 1% savings.

 

[rescueme]

Maybe he's out of business by now. (heh)

Actually no - still see "his" ads on TV...

He died in 2009, but the company is still going strong...

 

[Texas Proud]

When my mom bought her car she got a $1,000 rebate only if she took out a loan... when I asked the finance guy what the interest rate was he said "who cares, you pay it off next month"... which she did....

No loan, no $1,000... but she did get a good rate



As for showing invoice to a customer, that does not mean it is the true cost to the dealer... with hold backs, incentives etc. etc. (you know more about this than I do... I just know it is there)... the true cost is less...

One time I bought a car and a friend of mine went to buy from the same place.... his credit was not that good and he was denied.... but the paperwork was all filled out etc... and it was the end of whatever sales cycle where if the dealership had sold ONE more care they got a lot of money... they could not get another sale done for some reason (backdating or whatever they did)... so they dropped the price of his deal another $2,000 or so, he upped his down payment and the deal went through.... his price was WAY under invoice...

 

[73ss454]

Texas, please understand that most dealers get an additional 3% under invoice to keep the doors open. Usually no one gets paid on this money and it is used to defer some of the costs to keep the cars in stock and keep the lights on. A dealer who has 600 cars in stock can pay tons in floor plan costs and that's what this money is for.

Also the manufacturers are now doing deals with dealers to move more product. Let's say a Nissan dealer gets a factory offer to move 60 Altimas for the month. Nissan will offer an additional 500 for each car delivered if they hit this #. So dealers will take losers to get to that #. If they don't hit it they are out the money on the losers.

This is not always the case so the invoice is the real # to work off of. The last day of the month is always the best day to buy a car for the reason I mentioned.

Many times folks would come into my office to discuss finance and there would be a program for the customer for an additional rebate if they finance with the manufacturers finance wing. So as in your case the finance guy told you to pay the loan off in one month and take advantage of the rebate.

 

[mickeyd]

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.

Anyway, no extra fees; I can pay off the balance at any time; final price divided by 36 is what I pay monthly. It's a promotion that Toyota is doing and the dealer is not part of it. I will set it up to draft automatically each month. I walked out with a new car and did not spend a dime today.

 

[ziggy29]

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.

Anyway, no extra fees; I can pay off the balance at any time; final price divided by 36 is what I pay monthly. It's a promotion that Toyota is doing and the dealer is not part of it. I will set it up to draft automatically each month. I walked out with a new car and did not spend a dime today.

Yeah, if there is absolutely no negotiating a discount instead of the 0% financing, I'd take it too -- and immediately move the purchase price from my primary savings account into another account where I would make the payments -- and consider the money already spent.

 

[73ss454]

Good for you mickeyd, sounds like it was a painless deal.

 

[ArizonaJay]

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.

 

[mickeyd]

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.

 

[Pajaro]

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?

 

[mickeyd]

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.

 

[clifp]

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.

 

[rescueme]

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 ...

 

[ziggy29]

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.

 

[Texas Proud]

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...

 

[kombat]

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?

 

[73ss454]

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?