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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...

audreyh1 06-09-2021 07:41 PM

Quote:

Originally Posted by REWahoo (Post 2618302)
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?

For some reason the dealers lots seem full of cars down here.

REWahoo 06-09-2021 08:00 PM

Quote:

Originally Posted by audreyh1 (Post 2618402)
For some reason the dealers lots seem full of cars down here.

According to their website the Toyota dealership in Brownsville has a total of 54 new cars on their lot. Not sure what their inventory would usually run but that seems a small number to me.

Most dealerships have tried to load up on late model used cars which could be masking the number of new cars on their lot.

Bflotomny 06-09-2021 08:45 PM

Why? Why? Why? Why is buying a car such a process. Think about all the things we buy year around. Think about your house. You may look at many houses and finally settle on one. But you know going in what the price is. Sure you may negotiate some but the list price is still somewhat near the price paid. And once you move in you know your neighbor who purchased two days after you didn't pay $25,000 less because he could negotiate better than you.
Car buying and shopping is a joke.

harley 06-09-2021 10:50 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.

If you have any links I would appreciate seeing them. DD is car shopping and I'm trying to convince her to wait awhile. I googled it but only got hits on what the best months to buy a car are.

bobandsherry 06-10-2021 05:58 AM

Quote:

Originally Posted by Bflotomny (Post 2618433)
Why? Why? Why? Why is buying a car such a process. Think about all the things we buy year around. Think about your house. You may look at many houses and finally settle on one. But you know going in what the price is. Sure you may negotiate some but the list price is still somewhat near the price paid. And once you move in you know your neighbor who purchased two days after you didn't pay $25,000 less because he could negotiate better than you.
Car buying and shopping is a joke.

Not sure of your analogy. Not a resell home as you can't find the "same" home in a resell market, not typically. Maybe with buying a new construction home vs new car. But I can assure you, if you don't negotiate with a new construction home purchase you have overpaid. I have a new construction home, my price was the same as my neighbors. But I got more money to cover "closing costs", I walked out of closing with a credit. I also had thousands of dollars of options added in. I paid less than my neighbors. They didn't know you could negotiate.

You can negotiate on many large ticket purchases. When we bought an appliance package years ago I was able to negotiate a lower price and got them to also include free delivery.

So I guess car buying is hard because people expect to negotiate. Tesla changed that model, but it still hasn't caught on. Yet Ford, with the Mach-E stuck to a set price, so maybe learning or maybe just because it's new.

REWahoo 06-10-2021 06:24 AM

Quote:

Originally Posted by harley (Post 2618461)
If you have any links I would appreciate seeing them. DD is car shopping and I'm trying to convince her to wait awhile. I googled it but only got hits on what the best months to buy a car are.

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

https://www.youtube.com/watch?v=IBIgfbIfpQs&t=389s

Ready 06-10-2021 09:28 AM

Tesla raised pricing on its Model 3 and Model Y five times in the past two months. And, there is a 2-3 month wait to get a car.

Demand is very high right now for many new cars. And supply constraints are limiting production capacity. So we have a basic supply/demand issue right now. Until supply catches up dealers are not going to be highly motivated to sell cars they have little inventory of.

T-Minus 06-10-2021 10:37 AM

There are several new car dealers between me and my local Costco (about 10 miles each way). Yesterday on a shopping run, I drove slowly and looked at the various makes to “see what I could see”. Keep in mind, there’s Porsche, Ferrari, MB, BMW, Audi, Range Rover, Chevrolet, Toyota, GM, Nissan, Cadillac, Chevrolet, Lexus, Genesis, Subaru and a couple others. Most of the dealer lots are almost completely empty, to the point where they have to space what cars they have with 10’ gaps between them (or more) and at angles - just to make the lot look fuller. Previously, cars had been parked with 2’ at most between the vehicles. And, almost all of the displayed cars are used and other brands - like a Lexus dealer with a used Ford pickup. The exception that I observed was Nissan - they had a LOT of new vehicles on their lot. Perhaps they just aren’t as in demand as the other makes? Long story short, with minimal inventory, it’s a seller’s market.

beernutzbob 06-10-2021 01:08 PM

This BS is why I now only buy cars from fixed price dealers.

donheff 06-10-2021 03:35 PM

Quote:

Originally Posted by Bflotomny (Post 2618433)
Why? Why? Why? Why is buying a car such a process. Think about all the things we buy year around. Think about your house. You may look at many houses and finally settle on one. But you know going in what the price is. Sure you may negotiate some but the list price is still somewhat near the price paid. And once you move in you know your neighbor who purchased two days after you didn't pay $25,000 less because he could negotiate better than you.
Car buying and shopping is a joke.

I agree that car buying is awful but in my area houses are a reverse negotiation. Bidding wars can take the price up 10% or more over the listed price with no contingencies. People write letters explaining why they are the best to take your lovely home.

CSdot 06-10-2021 06:05 PM

Quote:

Originally Posted by harley (Post 2618461)
If you have any links I would appreciate seeing them. DD is car shopping and I'm trying to convince her to wait awhile. I googled it but only got hits on what the best months to buy a car are.

One argument you see for the car shopping crunch is something about a shortage or lack of computer chips due to Covid.

chassis 06-10-2021 07:41 PM

Car dealers have some of the lowest business ethics of anyone in the economy.

Buying a car from a dealer is the worst purchase experience I can think of. I have purchased more than a few cars.

Don’t pay the fee.

dm 06-10-2021 08:04 PM

1 Attachment(s)
One thing that helped was my 2017 Jeep with 30,000 miles was worth more than I thought.

Of coarse the new ones are quite a bit more, but they always seem to be.

And I wrote a bad check, told them not to cash it till I could transfer fund into it, or it would bounce. They said just give them a call when it was good.

Here is a pic of what I bought.

oiseux 06-11-2021 10:23 AM

Quote:

Originally Posted by harley (Post 2618461)
If you have any links I would appreciate seeing them. DD is car shopping and I'm trying to convince her to wait awhile. I googled it but only got hits on what the best months to buy a car are.

The surge in demand from 2020 is quite high, after a year that saw car sales down about 15%. On top of this, a major fire at a chip plant in Japan and the deep freeze in Texas caused some pretty large supply disruptions. Because demand from all other types of products is quite high due to COVID-recovery based demand, the car manufacturers have been caught flat footed with insufficient inventory and a lack of orders on the books with suppliers or with the aforementioned supply chain events. Thus, major manufacturers have had to idle plants while they procured enough supplies.

As of March, US inventories were the lowest in 10 years and April/May demand grew even stronger:
https://lmc-auto.com/news-and-insights/us-inventory-how-low-can-it-go/
(LMC tracks auto sales and production)

It is a disproportionate effect. Players like Ford were particularly hard hit, and have prioritized pickup production and other higher profit cars. Things are starting to improve from the worst impacts but will last for quite a while.
https://www.thedrive.com/news/40739/...car-production
https://www.nytimes.com/2021/06/03/business/general-motors-chip-shortage.html

CoolRich59 06-11-2021 11:18 AM

Quote:

Originally Posted by racy (Post 2617967)
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.

Don’t want to hijack the thread, but I think these Kevin Hunter car buying videos are terrific. I watched a bunch of them before car shopping. (But, now I’m waiting for inventory levels to come back. There’s no way I’m walking into a stealership and getting into a “bidding war” for a car. :nonono:)

CoolRich59 06-11-2021 11:57 AM

Quote:

Originally Posted by racy (Post 2618007)
:) Yes! Even better if you have a tired & whiny 1 year old along! (We bought a Bronco II back in the day like that).

LOL!

Way back in ‘94 I bought a Nissan Maxima. I brought along two of my boys who would have been about 6 and 8 at the time.

It did not take long for them to get bored and start climbing on top of cars, honking horns, and generally causing chaos. I pretended not to notice as the stealership staff tried (unsuccessfully) to reign them in.

I knew the price I was wanted to pay and was willing to haggle as long as it took. Those boys certainly helped get the deal closed a lot faster than if I’d been by myself. :laugh:

The icing on the cake came a few days later.

It seems that in the haste to wrap things up, the salesman made a big mistake in the paperwork and no one caught it at the time. The stealership’s general manager called me up and asked me to come in and sign the corrected paperwork. I said I’d drop by that evening. I met the GM in his office and he laid out the corrected forms and offered me a pen. I asked “First, what are you going to give me for agreeing to this change?”

He was not amused.

Another round of negotiations commenced, much less pleasant; it even included threats of lawyers and “repossession” of my new car. I said, fine, cancel the deal. You can take back your (now used) car and give me back my old car (which I suspect had already been shipped off to a wholesaler).

In the end, I *graciously* agreed to sign in exchange for two years of free oil changes. ;D

freedomatlast 06-11-2021 12:07 PM

Quote:

Originally Posted by beernutzbob (Post 2618744)
This BS is why I now only buy cars from fixed price dealers.

That way you almost guarantee that you overpay.

teetee 06-11-2021 02:53 PM

It is not a thing. It sounds like you did the negotiation with them thinking you are going to finance the car but not so they want their profit back.

Did they exclude the destination charges or dealer paperwork fee?

If you are paying those then that dealer is scamming you. If you are buying a used car, or they offer xx months free maintainence, just leave. No need to waste time dealing with liars.

lauradrops 06-11-2021 03:16 PM

Quote:

Originally Posted by teetee (Post 2619278)
It is not a thing. It sounds like you did the negotiation with them thinking you are going to finance the car but not so they want their profit back.

Did they exclude the destination charges or dealer paperwork fee?

If you are paying those then that dealer is scamming you. If you are buying a used car, or they offer xx months free maintainence, just leave. No need to waste time dealing with liars.

We didn't get that far. I corresponded online to confirm they had what I was looking for. When I went in to talk price and possible trade, she wanted to go through the entire finance thing. I said I was undecided about that and was more interested in the price of the car first, then we could discuss possible trade in and how I would pay.

At that point is when she said they charge 1500 for cash buyers. I have bought many cars, cash and finance, and never heard it put that way. I have heard of many different incentives, financing or otherwise, but never a cash fee. Just struck me as an odd.

But in the end, I got the car I wanted for what I wanted to pay and have been very happy since.

beernutzbob 06-12-2021 07:00 AM

Quote:

Originally Posted by freedomatlast (Post 2619176)
That way you almost guarantee that you overpay.

Almost everything for sale on Amazon could be bought elsewhere for less.

ncbill 06-12-2021 02:11 PM

Quote:

Originally Posted by beernutzbob (Post 2618744)
This BS is why I now only buy cars from fixed price dealers.

I used a broker to negotiate my last lease.

Stuck my kid on a cheap flight to pick it up & drive it back.

If I ever buy a new vehicle I'll use a broker as well.

tenant13 06-12-2021 05:52 PM

It may sound strange but at the ripe age of 57 I just bought my first car from a dealer.

25 or so years ago I had a Nissan 240SX but I bought it for cash from a dude who was selling reconditioned post-accidents vehicles. Then I lived in NY and and didn't need a car. This time around I went to a few Subaru dealers and eventually got myself a slightly used 2021 Outback "loaner": this is what dealers loan to people while their cars are being repaired. The car itself is kind of meh - it moves like a cow (I passed on the XT engine) and the seats suck - but I only need it for my across country road trip and that will mostly take places on the back roads. So I guess I don't need a sprinter... And I won't drive long hours.

As to financing. They were quite open about not wanting to do any cash deals - they make money on originating loans and selling them to financial institutions. In this case Chase had a sweet deal of 0.99% financing through some special relationship with Subaru so I went for it. I can definitely make more than 1% with that money so I'll hold off with paying off the loan until my trip is done and I'm ready to sell.

frank 06-13-2021 06:03 AM

Quote:

Originally Posted by ncbill (Post 2619681)
I used a broker to negotiate my last lease.

Stuck my kid on a cheap flight to pick it up & drive it back.

If I ever buy a new vehicle I'll use a broker as well.

what kind of broker do you use and where do you find them. never heard of a car purchase broker.

braumeister 06-13-2021 06:33 AM

Quote:

Originally Posted by frank (Post 2619838)
what kind of broker do you use and where do you find them. never heard of a car purchase broker.

This may be helpful:

Car Brokers

Using a Car Broker to Buy Your Next Vehicle

ncbill 06-13-2021 02:14 PM

Quote:

Originally Posted by frank (Post 2619838)
what kind of broker do you use and where do you find them. never heard of a car purchase broker.

Bunch of lease brokers here:

https://forum.leasehackr.com/c/reviews/11

Note with a purchase there's only one variable to negotiate. :)

24601NoMore 06-13-2021 03:18 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.

BIL is a Chrysler mechanic at a very large area dealer and says "I'd hate to be a sales guy right now..we have NO. CARS for them to sell".

Said he's never seen the sales lot so totally empty in the 30 or so years he's been there.

Even used cars are going for way above pay-off value. I read a story the other day about CarVana (?) and other places paying MORE than people owe on their leases and/or loans just to get vehicles. Sometimes a LOT (as in $5K over) more. You can apparently go to their website, key in your car's info and get a buyout quote either real-time or very quickly. They are apparently totally desperate for cars..but will then turn around and sell what they paid you thousands to much for to some other person for...even more thousands above what they paid you.

Yeah..if you don't ABSOLUTELY need a car right now (or a house), stay far away from either market. They both have no inventory and prices in both are totally bonkers and inflated beyond words.

aja8888 06-13-2021 04:19 PM

1 Attachment(s)
Today I checked the value of my 2005 Mustang convertible (base model, not GT) with 64,000 miles on it. I used Kelly Blue Book as they are pretty good with average retail and trade in values.

The car is Mint and has new tires, new A/C, perfect paint, etc. Last year, from memory, the "Private Party Average Retail" was about $6 K. Today's value puts it at $9,010. This is nutty money for a 17 year old V6 automatic Mustang.

Attachment 39222

mz44 06-13-2021 04:25 PM

1 Attachment(s)
Quote:

Originally Posted by aja8888 (Post 2620053)
Today I checked the value of my 2005 Mustang convertible (base model, not GT) with 64,000 miles on it. I used Kelly Blue Book as they are pretty good with average retail and trade in values.



The car is Mint and has new tires, new A/C, perfect paint, etc. Last year, from memory, the "Private Party Average Retail" was about $6 K. Today's value puts it at $9,010. This is nutty money for a 17 year old V6 automatic Mustang.



Attachment 39222

I'll have to check on my 07 Gt conv w 33K.Attachment 39223

jr6035 06-13-2021 04:39 PM

Quote:

Originally Posted by lauradrops (Post 2617962)
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.

I paid cash on a new Honda in November. No fee. I would move on to a Toyoya then.

aja8888 06-13-2021 04:42 PM

Quote:

Originally Posted by mz44 (Post 2620054)
I'll have to check on my 07 Gt conv w 33K.Attachment 39223

Nice! :coolsmiley:

retired1 06-13-2021 05:04 PM

Quote:

Originally Posted by racy (Post 2617977)
I take their financing option then immediately pay it off (after confirming that's an option without penalties).

+1

Bongleur 06-13-2021 11:20 PM

Quote:

Originally Posted by teetee (Post 2619278)
Did they exclude the destination charges or dealer paperwork fee?

If you are paying those then that dealer is scamming you. If you are buying a used car, or they offer xx months free maintainence, just leave. No need to waste time dealing with liars.

I suppose when you get a price from a car buying service like thru a credit union or Consumer reports, those items are rolled into the "discount" - or is there any chance of telling them you know those are bogus & you need them struck off of the buying service price?

NW-Bound 06-14-2021 12:43 AM

Quote:

Originally Posted by lauradrops (Post 2617962)
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...

When I bought a new Chevy in January this year, the same thing happened to me at one dealer. I guess he suspected that I was going to pay cash, because I kept pressuring them on the "out-the-door" number. He tried to steer me into a finance deal with a high interest rate, even though my credit score was perfect. I suspected that he got kickback from that bank. When I said I was going to pay cash, he wanted more money, $1500 IIRC.

I got pissed off and went to AutoNation. They were cool with my paying cash, and gave me the same price as the other guy, but without the BS extra fee for cash. Deal!


About the shortage of cars, both new and used, I read that even car rental agencies now go buy used car to restock their fleet, because they could not get new cars. Desperate time!

DrRoy 06-14-2021 04:55 AM

I have not heard of this, but demand is up and supply is down. I would give 60 seconds notice of walking out.

Badger 06-14-2021 07:29 AM

Quote:

Originally Posted by racy (Post 2617977)
I take their financing option then immediately pay it off (after confirming that's an option without penalties).

+1
I have done this 4 times now. But first I make an initial payment at the dealership with a CC. They only allowed about $3-4k otherwise I would have made the entire payment by CC for the points. I had to make at least 3 payments on the financing before paying it off. They had some "discount" for financing so I netted about a $1k savings.


Cheers!

seattledan 06-15-2021 03:58 PM

Quote:

Originally Posted by racy (Post 2617967)
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.


Holy crap. I never knew. Wow, this business got even sleazier.

Parfumeur 06-15-2021 04:00 PM

>> She said DO NOT buy a new car right now unless you absolutely need to.

This is very good, BUT what is the rationale for that statement??

CardsFan 06-15-2021 04:09 PM

Quote:

Originally Posted by Parfumeur (Post 2620831)
>> She said DO NOT buy a new car right now unless you absolutely need to.

This is very good, BUT what is the rationale for that statement??

I think you quoted me.

The fact is the dealers, at least the one she works for, have very low inventory and are not dealing. I suspect they also only have the "loaded" versions available, though she did not say that.

TappyGee 06-15-2021 04:16 PM

I bought a Honda Accord at the dealer August 2020. Paid cash. No mark-up for cash. They were surprised that I arrived with a written price from an online company on that specific car. They tried to add $3 grand on. I did not permit them too. ����*♀️

msanniee 06-15-2021 04:19 PM

Quote:

Originally Posted by racy (Post 2617977)
I take their financing option then immediately pay it off (after confirming that's an option without penalties).

There is an underwriting fee for car loans the dealer generates. They make $$ if you finance through them.

ragabnh 06-15-2021 04:41 PM

Do Car Dealers still make their cut if you pay off the car Loan immediately,

Earlygirl 06-15-2021 05:02 PM

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.

ragabnh 06-15-2021 05:20 PM

Quote:

Originally Posted by Earlygirl (Post 2620873)
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.

Earlygirl 06-15-2021 05:28 PM

Quote:

Originally Posted by ragabnh (Post 2620879)
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.

ragabnh 06-15-2021 05:33 PM

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.

pb4uski 06-15-2021 05:34 PM

Quote:

Originally Posted by Earlygirl (Post 2620883)
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.

ncbill 06-15-2021 06:02 PM

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.

pb4uski 06-15-2021 07:07 PM

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?

freedomatlast 06-16-2021 05:12 AM

Quote:

Originally Posted by ncbill (Post 2620901)
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.

Mykle57 06-16-2021 06:06 AM

Quote:

Originally Posted by freedomatlast (Post 2621000)
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?

jazz4cash 06-16-2021 06:29 AM

Quote:

Originally Posted by Mykle57 (Post 2621007)
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.

jazz4cash 06-16-2021 06:38 AM

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.

Gearhead Jim 06-16-2021 03:24 PM

Quote:

Originally Posted by racy (Post 2617977)
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.

mn54 06-16-2021 06:55 PM

Quote:

Originally Posted by REWahoo (Post 2618517)
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

https://www.youtube.com/watch?v=IBIgfbIfpQs&t=389s

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.

Walt34 06-17-2021 03:53 PM

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.

TrvlBug 06-17-2021 05:51 PM

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 :laugh:.

Koolau 06-17-2021 08:50 PM

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 06-18-2021 05:35 AM

Quote:

Originally Posted by Koolau (Post 2621807)
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 06-18-2021 09:25 AM

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 06-19-2021 12:20 PM

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 06-19-2021 01:56 PM

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 06-19-2021 02:48 PM

Quote:

Originally Posted by pb4uski (Post 2620916)
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 06-19-2021 03:29 PM

^^^^ 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 06-20-2021 01:26 PM

Quote:

Originally Posted by pb4uski (Post 2622641)
^^^^ 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."


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