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-   -   Fee for cash buyers??? (https://www.early-retirement.org/forums/f28/fee-for-cash-buyers-109567.html)

lauradrops 06-09-2021 05:47 AM

Fee for cash buyers???
 
I went car shopping at some local Honda dealers looking for a new or CPO car. I did most of it online so I could cut down time at the dealership. Went to see one in person and was told if I pay cash they would charge $1500 more.

Is this a thing? I never heard of such a thing. I obviously left, but not before I let it play out for a few minutes. She asked me to give her a minute to talk to her manager before I left to "see what he could do". I thought maybe they were going to say they would wave the cash fee and expect me to pay full ask instead like it was a bargain. Nope, manager said it would be full asking plus 1500 cash fee.

I did purchase at another dealer who was happy to negotiate a great deal for me in cash. I was really just shocked by the first dealer and wonder if anyone else ever heard of such a thing.

braumeister 06-09-2021 05:50 AM

They don't need too many suckers to bite on a racket like that to make a nice profit.

This is why some dealerships succeed and others fail.

racy 06-09-2021 06:00 AM

Yes, it's thing. There are YouTube videos on 'how to negotiate for a car'. https://tinyurl.com/y6oa2l5o The usual advice is to not disclose that you're paying in cash until you're in the Finance office.

Aerides 06-09-2021 06:03 AM

I've heard of it, usually not so openly disclosed. This is why you always negotiate to a firm price before discussing payment, and if anything, hint you'll be interested in their financing.

If they won't talk price without determining payment, it means they are making profit in their financing.

racy 06-09-2021 06:18 AM

Quote:

Originally Posted by Aerides (Post 2617968)
... This is why you always negotiate to a firm price before discussing payment, and if anything, hint you'll be interested in their financing. ....

I take their financing option then immediately pay it off (after confirming that's an option without penalties).

lauradrops 06-09-2021 06:24 AM

Quote:

Originally Posted by Aerides (Post 2617968)
I've heard of it, usually not so openly disclosed. This is why you always negotiate to a firm price before discussing payment, and if anything, hint you'll be interested in their financing.

If they won't talk price without determining payment, it means they are making profit in their financing.

So my intention was to negotiate a price before going to the dealership. I contacted 5 dealerships through their online department and none would negotiate without coming in. I told all I would inquire about financing after a price was reached, and I was undecided about a trade in.

This was the only dealership that told me they had a cash fee. Maybe they said that to push me toward financing, but at that point they didn't know if I was paying cash or financing.

The one I bought from worked with me on the phone first and said their price was the same cash or finance. They still would not negotiate over the phone, but said it was definitely negotiable. I had already done my research and knew what I should be paying. After we agreed on the price, I told them it would in fact be cash and I did wind up trading in because they gave me a price $500 more than all the others. I like the trade in aspect because it came off the top so I paid less tax.

I did learn that if you go in 40 min. before they close, they become more motivated to get to the bottom line quicker.;D

latexman 06-09-2021 06:35 AM

Quote:

Originally Posted by lauradrops (Post 2617962)
Went to see one in person and was told if I pay cash they would charge $1500 more.

I wonder if you chose one of their "bait and switch" cars too? That would give them more reason to stick to their finance ploy.

GravitySucks 06-09-2021 07:02 AM

Bought a Hyundai Elantra in 2011and got a $500 rebate for financing at 0%. Never understood that one but was happy to take the free money.

Bamaman 06-09-2021 07:48 AM

Buying a car can quite a maze with many different sales incentives thrown at the dealer and ultimately you the customer.

You have a rebate from the manufacturer. You have a rebate from a captive finance source if you use their standard rate financing. You have a low APR program that is subvened by the manufacturer to their captive finance company. And then they sometimes will pay your first 3 monthly payments. All such options come with a net difference in the "COST" of the vehicle to the dealer.

When I bought my 2020 F150, it took a dales manager half an hour to figure out the different options and what the net cost would be for them. Ford was throwing around so many sales incentives at the time. And they also sent me a $3000 off coupon in the mail.

The car business is just not simple. Maybe the dealer up charging $1500 for cash buyers was because all prices quoted were already minus factory incentives for low APR's since so few buyers pay cash?

racy 06-09-2021 07:53 AM

Quote:

Originally Posted by lauradrops (Post 2617978)
...I did learn that if you go in 40 min. before they close, they become more motivated to get to the bottom line quicker.;D

:) Yes! Even better if you have a tired & whiny 1 year old along! (We bought a Bronco II back in the day like that).

bobandsherry 06-09-2021 08:17 AM

If you were looking at a new car, my guess is there is an incentive being offered for financing by lender (usually an arm of the manufacturer) and not specifically the dealer charging you more. That's not uncommon. My son and daughter just bought a car, in addition to an attractive rate there was also $1,500 bonus cash. This is also offered many times on leases.

ncbill 06-09-2021 08:17 AM

Surprisingly, there can be $1000+ incentives for financing through the OEM's lending arm...but you can usually pay it off with the first statement.

So given the above, even if it cost me a few bucks in interest before I could pay it off in full, I'd sign up for the financing to get the incentive.

RetiredAndLovingIt 06-09-2021 11:48 AM

I've always bought the bait and switch car at thousands less than the MSRP.
They were usually stick shifts which was fine me and as long as they had a/c I was good.
I'd visit the lot before they opened, walk the lot and find the car. When the salesman tried to tell me it was gone already I'd walk right to it. Didn't make any friends at the dealerships doing that but saved a ton of money.
I'm a cash buyer as well but if it manufacturer financing was needed to get a rebate, I was happy to do that and pay it off in full the next month.

MrsHaloFIRE 06-09-2021 02:49 PM

Wouldn't negotiate on the phone? This must be one heck of a car sales market we are in. I negotiated the sh#t out of a new car on the phone with 2 dealers in july 2019. I don't know that i want to do business with anyone in this environment that requires it be done in person short of medical procedures

REWahoo 06-09-2021 03:06 PM

Quote:

Originally Posted by MrsHaloFIRE (Post 2618275)
Wouldn't negotiate on the phone? This must be one heck of a car sales market we are in.

As I understand it, yes, it is. I've seen reports saying it is the worst time since the end of WWII to try to buy a car, new or used.

braumeister 06-09-2021 03:10 PM

Quote:

Originally Posted by REWahoo (Post 2618289)
As I understand it, yes, it is. I've seen reports saying it is the worst time since the end of WWII to try to buy a car, new or used.

Highly variable. DW bought a new Toyota Venza in March. She had a great experience and got a good price. Has it really gone downhill so quickly?

CardsFan 06-09-2021 03:17 PM

Quote:

Originally Posted by REWahoo (Post 2618289)
As I understand it, yes, it is. I've seen reports saying it is the worst time since the end of WWII to try to buy a car, new or used.

We have friend that works in finance for a large dealership. She said DO NOT buy a new car right now unless you absolutely need to.

REWahoo 06-09-2021 03:22 PM

Quote:

Originally Posted by braumeister (Post 2618293)
Highly variable. DW bought a new Toyota Venza in March. She had a great experience and got a good price. Has it really gone downhill so quickly?

I've seen info saying all the news about new car shortages saw dealerships crowded with panicked eager buyers in April and May. Many if not most sales were at or very near sticker price, or even above for in-demand trucks and SUVs. The rush left little in inventory and not much is in the pipeline to re-fill dealer lots. As a result, most new car dealerships are now primarily used car dealers.

FWIW, I checked the inventory of a couple of large Toyota dealers in San Antonio last week. One had 33 new vehicles on their lot, another had 55. Each would normally have several hundred.

Edit: I just checked both those Toyota dealers again and found each of them says they have one (1) new Venza on their lot. What are the chances of negotiating a good price on one of those today?

braumeister 06-09-2021 03:37 PM

I guess you're right. Just checked around here and the MSRP is nearly $1,000 higher than in March, and there are hardly any available.

Texas Proud 06-09-2021 06:55 PM

Quote:

Originally Posted by lauradrops (Post 2617978)


/snip/


I did learn that if you go in 40 min. before they close, they become more motivated to get to the bottom line quicker.;D


Not always the case... I was in a dealership 2 hours after closing as it was dragging on and on.... I finally left as they would not drop the last $500...


It was funny that the manager said he thought he had me earlier.... I told him he almost did!!!


Got the deal I wanted from another dealer that matched a price from one up in Dallas... cheaper than what I was willing to agree to at the other dealer...


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