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Old 06-15-2021, 04:41 PM   #61
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Do Car Dealers still make their cut if you pay off the car Loan immediately,
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Old 06-15-2021, 05:02 PM   #62
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The dealers make money doing auto loans. That's why they don't want you to pay in cash. But you can get your best deal with a loan, and then pay off the loan as soon as you want to. You can also refinance the loan, if you find a better rate at a bank or credit union. There is usually no charge to refinance an auto loan.
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Old 06-15-2021, 05:20 PM   #63
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The dealers make money doing auto loans. That's why they don't want you to pay in cash. But you can get your best deal with a loan, and then pay off the loan as soon as you want to. You can also refinance the loan, if you find a better rate at a bank or credit union. There is usually no charge to refinance an auto loan.
Yes, I am aware of that, but if you buy and finance the car, then pay off the loan immediately then the financing company still pays the dealer their cut or not.
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Old 06-15-2021, 05:28 PM   #64
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Yes, I am aware of that, but if you buy and finance the car, then pay off the loan immediately then the financing company still pays the dealer their cut or not.

I used to do auto loans. When people were getting a manufacturer rebate, along with their loan, we would tell them to wait six months, just to be safe. I'm not certain if that applies when you are getting the loan only. It seems like it would be best to at least wait a couple of months. I doubt it would matter after that.
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Old 06-15-2021, 05:33 PM   #65
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I bought a used car from a dealer 6 months ago, then I paid off the loan within a week, I received my title 4 months later, I was just wondering if the dealer made any money on the financing since I paid the loan within a few days and before first payment was due.
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Old 06-15-2021, 05:34 PM   #66
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I used to do auto loans. When people were getting a manufacturer rebate, along with their loan, we would tell them to wait six months, just to be safe. I'm not certain if that applies when you are getting the loan only. It seems like it would be best to at least wait a couple of months. I doubt it would matter after that.
I always thought that the reason the dealer asks you to wait was because if the loan pays off right away then the lender can claw-back part of the origination fee that the lender paid to the dealer.

If that was true, in the case of the dealer that insists on an extra $1,500 for cash, I'd be tempted to say okay I'll take the financing and then pay it off the very next day.
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Old 06-15-2021, 06:02 PM   #67
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IIRC from online posts people say their dealers requested they make 2 or 3 monthly payments before paying off the loan..

I guess that's long enough for the dealer to be able to keep their commission.
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Old 06-15-2021, 07:07 PM   #68
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Yeah... so if I really object to a dealer insisting on a $1,500 fee if I pay cash I can screw with them by agreeing to financing but paying it off right away so they lose their commission, right?
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Old 06-16-2021, 05:12 AM   #69
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IIRC from online posts people say their dealers requested they make 2 or 3 monthly payments before paying off the loan..

I guess that's long enough for the dealer to be able to keep their commission.
Yes, that was what it was in our case. The dealer asked us if we would wait three months to pay it off so they could keep their full commission. At a 0.99% interest rate, we agreed.
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Old 06-16-2021, 06:06 AM   #70
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Yes, that was what it was in our case. The dealer asked us if we would wait three months to pay it off so they could keep their full commission. At a 0.99% interest rate, we agreed.
My understanding of loan amortization is that the first 3 monthly payments of a loan are predominantly interest and very little principal. Regardless of the interest rate. So, are you simply adding to the purchase price of the vehicle?
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Old 06-16-2021, 06:29 AM   #71
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My understanding of loan amortization is that the first 3 monthly payments of a loan are predominantly interest and very little principal. Regardless of the interest rate. So, are you simply adding to the purchase price of the vehicle?


No, a fully amortized auto loan does not include front loaded interest. Try any loan calculator. Borrow $35k @3% for 5 yrs the payment is approx $628/mo and the 1st month interest is ~$88. Back in the day they used “sum of the digits” or some other scheme that amounted to a prepayment schedule.
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Old 06-16-2021, 06:38 AM   #72
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Fee for cash buyers? These topics always make me wonder what exactly is cash?
A duffle bag full of currency?
A personal check for the purchase price?
A cashiers check from a bank/credit union?

In our market dealers have generally been keen on credit union financing. I don’t see how the bank/credit union check would not be considered cash. Navy Federal sends a voucher for the maximum your are approved for and you fill in the actual amount. Usually 100% PLUS DMV fees which much higher LTV than a house but it’s
a depreciating asset.
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Old 06-16-2021, 03:24 PM   #73
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I take their financing option then immediately pay it off (after confirming that's an option without penalties).
We did the same on our last two cars. In each case the financing deal was fair, but their interest rate was marginally above what I could earn with the money in a CD, so I paid it all off almost immediately.
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Old 06-16-2021, 06:55 PM   #74
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Try searching news for "Wait to buy a car".

Here's the first link that came up for me: https://lifehacker.com/why-its-a-ter...you-1846985137

And there is this on YouTube: Here's Why Now is the WORST TIME in HISTORY to Buy a Car

I subscribe to this youtube channel. father and son team. he has been in the business for 40 years. very educational and entertaining. used the info on their website to help price and negotiate my latest purchase of 2021 honda accord hybrid.
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Old 06-17-2021, 03:53 PM   #75
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Re the scarcity of new cars, here's a data point of one. Driving past the local GMC/Cadillac/Buick dealer today I was struck at the emptiness of the lot. I've never once seen it like that and have lived here for 19 years. I'd bet they didn't have a dozen new vehicles on the entire lot. Normally it's more like fifty.
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Old 06-17-2021, 05:51 PM   #76
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DH and I will be replacing our SUV with a 2022 and have started looking at features of the 2021s and what's in store for 2022 if changes are known.

Dearth of new cars at the 2 dealerships we have visited. Actually, our current cars were in for service, so we just happened to be there and looked. Have been looking at the MSRP stickers of the SUVs we're interested in and got a surprise today...a $4,995 MARKUP at the 2nd dealership. Off to the right of the sheet, the MSRP price was listed, then the markup added. Cost of vehicle went from $53K to $58K . I'm pretty sure they'll also add a 'cash' fee .
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Old 06-17-2021, 08:50 PM   #77
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I hope not to find myself in need of a car any time soon. I hate dealing with dealerships and it looks like they have the upper hand in the "supply and demand" situation right now.

BUT, I have found one negotiation tactic that has never failed me. Upon the very first "surprise" (like when the salesman supposedly goes to talk to the sales manager and comes back with practically no discount) I push my chair back, stand, extend my hand (well, pre-Covid) and tell the salesman "Thanks, if you change your mind, you have my phone number." I've never gotten further than the front door without getting my price. That $1500 for a cash deal - they'd have to chase me all the way to my car to give me my price but YMMV.
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Old 06-18-2021, 05:35 AM   #78
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I hope not to find myself in need of a car any time soon. I hate dealing with dealerships and it looks like they have the upper hand in the "supply and demand" situation right now.

BUT, I have found one negotiation tactic that has never failed me. Upon the very first "surprise" (like when the salesman supposedly goes to talk to the sales manager and comes back with practically no discount) I push my chair back, stand, extend my hand (well, pre-Covid) and tell the salesman "Thanks, if you change your mind, you have my phone number." I've never gotten further than the front door without getting my price. That $1500 for a cash deal - they'd have to chase me all the way to my car to give me my price but YMMV.
I had a successful fail using a variation on that technique. In about 1992 I wanted to buy a minivan and negotiated the guy to a price I was willing to pay. He took it to the manager and came back higher. I told him to go back to the manager and get me my price within 5 minutes or I was walking and would not come all the way back out to the dealership if they changed their mind later. Five minutes later I walked as the two of them watched me from a glass office one floor up. About two hours later the salesman called me to say they agreed with my price. I blew him off and went for a Jeep instead of the minivan. Been driving SUVs ever since.
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Old 06-18-2021, 09:25 AM   #79
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One negotiating ploy that I have used a few of times where we were at an impasse is to write a check to the dealer for my maximum acceptable out-the-door price and not sign it... give it to the salesman and tell him/her that if they want to do a deal for that amount for that vehicle then I am in, but otherwise I'm done and then I walk away.

It has worked 2 out of the three times I have tried it. One time I got the check back from the dealer in the mail a couple days later.
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Old 06-19-2021, 12:20 PM   #80
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My last truck was a 2018 model bought new in 2017 so no deal from dealer. I opted to go the costco no haggle rout and was very pleased. Did still get into a fuss on my trade in and had to go to a second dealer but all worked out...plus got a costco gift card
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