Fee for cash buyers???

[TrvlBug]

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 .

 

[Koolau]

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.

 

[donheff]

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.

 

[pb4uski]

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.

 

[ducky911]

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

 

[TrvlBug]

Is this common where if you purchase a new next year vehicle as soon as they come out, the dealers don't haggle? This was our experience when we bought our 2016 SUV in July 2015 and the dealerships had very few on their lots. We've always purchased the current year vehicle towards the end of the current year and have gotten good deals. We're waiting on the 2022s as some will come out with the more advanced features that DH and I are interested in. We plan to purchase as soon as they are available.

 

[youbet]

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?

That would depend on the terms of the loan. Read the paperwork. Pre/early payment penalties are not uncommon. Do not take the dealer's advise on whether you can pay off the loan early. Of course you can. It's the penalities involved that matter.

 

[pb4uski]

^^^^ I've never had a loan of any type that had a prepayment penalty.... though I agree don't trust the dealers say so.... verify that there is no prepayment penalty.

 

[youbet]

^^^^ I've never had a loan of any type that had a prepayment penalty.... though I agree don't trust the dealers say so.... verify that there is no prepayment penalty.

I appreciate that anecdotally you haven't had a loan of any type with a pre-payment penalty, but I have. (My first mortgage in the early 70's.)

If you Google "Car Loan Prepayment Penalty" you'll find there are car loans out there today with various forms of pre-payment penalties. It looks like various schemes aimed at punishing the borrower a bit for early payoff are more likely to be found in dealer brokered loans as opposed to loans direct from a bank or CU. Especially interesting is when they use the "Rule of 78."