Car Dealership Shenanigans

I found when buying a new car, finance 5k - 10k with them and they are happy. Pay it off after 4 months and be on your way. The dealer gets their kickback from the parent corp, and you are out all of about $100 in interest - and walked out with a great (net) deal.
 
Living in Europe it is an entirely different matter for buying a car than in the US. They don't make money from commissions or from financing as that doesn't even exist at the dealership. They make money from normal markups only and there are no discounts from manufacturers at all. However, they also have zero inventory (so no impetus to dump cars on the lot which they paid for and are merely losing value) and every car is ordered direct from the factory.

My last purchase was a 2014 VW Passat and it took 6 weeks to arrive after ordering. I had wanted to buy a Skoda Superb but there weren't any in our country to even look at. I could have bought a Mercedes as they are manufactured here in Hungary but I would have had to drive 3 hours to the factory to see one. On the other hand all the dealers are honorable and honest men and we have become good friends with them and have a good relationship. It is a profession here which is taken seriously.

I could also buy a car at the PX in Italy which is back to the US high pressure sales methodology. Being retired military the import duties are weird and add roughly 35% to the cost of the car and a ton of legal paperwork to import the car. Active duty military bypass this as their intent is to ship it back to the US. Many just sell them second hand in Europe and get around the rules especially in Italy where defying government taxes is an art form.

What is interesting, is that as an ex-pat American and non-Hungarian citizen I was actually forbidden to buy a car at all as I was on a temporary (3 year) visa. We had to have our full time gardener buy the car in his name and then sign it over to us later when we got permanent residence visas (which are actually only for 5 years). We had to drive around with a special "permission" book allowing us to drive his car which we paid for. The insurance was in my name though. The car is actually in my wife's name so it is super weird. Luckily, Hungarian police always are very friendly and terrified of dealing with Americans so I am always sent on my way with a smile as none of them speak English. My wife doesn't drive much at all and leaves that to me. I am glad they treat us that way as I don't actually have a valid driver's license as I cannot pass the written exam which is 500 questions in badly translated Hungarian which is impossible to understand. American licenses are not valid after 90 days in Hungary. The reason? The USA doesn't recognize Hungarian licenses so it is a tit for tat. I also had to take a 6 month driver's course (which a "friend" fixed for me but I can't get past the test. I stay legal (more or less) as we travel a lot and if I go outside the country to a non-EU country (Bosnia for example) then I remain legal. The reality is no one cares. They have much larger problems than expired licenses of ex-pat Americans. I also never break any laws at all and drive very sensibly which is very irritating to Europeans. I even use my turn signals which no one seems to know about here. But, in Europe there is none of this probable cause nonsense for police. They can stop you at will for any reason and frequently set up roadblocks and check everyone. Driving under the influence is their main interest and they check everyone. Personally I don't mind it too much and the delays are brief.

My wife got her driver's license easily as she is Russian by birth and emigrated to the US in 1991. She had an old Soviet license which expired in 1992 but they took that in exchange for a Hungarian license without exam or any hassle at all (despite the fact that country hasn't existed since 1992). Me? No soup for you!!

I keep hoping Hungary will finally adopt the EU mandate that US driver's licenses be accepted but Hungary is pretty slow to adopt things mandated by the EU as they still believe in State's Rights. There is a lot of varying degrees of acceptance of the EU as a federal body especially by the former Soviet aligned countries who are not treated equally in the EU. That is another topic for another day.
 
We bought a 2019 Hyundai Sonata, loaded. Took out the loan at 9% to get all the discounts. They lowered the price to our liking. I signed all the loan papers.

I paid 2 payments then paid it off all at once. Gave my credit rating a boost, not that I care. They did not want us to pay in cash and did not offer all the discounts with cash. So we got the discounts and I think I paid @ $17 in interest.
 
Rianne said:
We bought a 2019 Hyundai Sonata, loaded. Took out the loan at 9% to get all the discounts. They lowered the price to our liking. I signed all the loan papers.

I paid 2 payments then paid it off all at once. Gave my credit rating a boost, not that I care. They did not want us to pay in cash and did not offer all the discounts with cash. So we got the discounts and I think I paid @ $17 in interest.
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Yes. I did that too when I bought a Mazda RX-8 about 10 years ago. $2,500 free money. The F&I guy knew what I was doing and advised that I make the payments until the title came through the state DMV and I got my mailed copy. He said things could get screwed up if Mazda processes a lien release while the title was in process. I took his advice, so my $2,500 probably cost me $200 in interest.

Looking back, I probably should have asked how small a loan I could take and still get the spiff.
 
Ditto here. Dealer asked that I make a couple payments before paying it off, which I did. I suspect that if it pays off before two payments that the bank gets to clawback some of what it paid to the dealer, but that is just a guess on my part.
 
Looks like a minefield for someone to take out a car loan with the plan to pay it off ASAP, even if it is to get a lower price or some other perks with the car. I'd never want to deal with the added aggravation and stress. I'll just pay cash, drive the car home, and be done with it all. I just borrow the money from myself and pay it back on whatever schedule I see fit.
 
I'll be buying a 2019 or so car in the near future, and am thinking of going to Carmax. They advertise no haggle prices and refund after 7 days and things like that. Had anyone here used them or know much about them?
 
bmcgonig said:
Had anyone here used them or know much about them?
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I have not but one BIL (the smart one) bought his pickup truck there. Fifteen years later he's still driving it. It was two or three years old when he bought it, the ideal time for a used vehicle.

Carmax is not the rock-bottom lowest price you'll find, but my understanding is they are legit, give the vehicle a thorough checkover, change all fluids, and perform any state inspections that are required. When I buy my next vehicle I'll give them serious consideration if I don't buy new.
 
IDK about buying, but Carmax is a very easy way to sell a car. Got rid of my last two with them and it was quick, easy, and painless. Price was roughly the same as what the dealer was offering as a trade-in. DW also sold her last car to Carmax and was equally pleased with the experience.
 
scrabbler1 said:
Looks like a minefield for someone to take out a car loan with the plan to pay it off ASAP, even if it is to get a lower price or some other perks with the car. I'd never want to deal with the added aggravation and stress. I'll just pay cash, drive the car home, and be done with it all. I just borrow the money from myself and pay it back on whatever schedule I see fit.
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+1

I don't want to deal with things like liens on my title and car insurance and making/stopping payments. If it were for a few thousand $ I might but not for a few hundred or less.

Plus paying cash is faster too. I once bough a new car on-line and told the salesman that this would be an all cash deal and I didn't want to waste my time waiting on the paper work, loans, hearing about all their "specials", etc. They drove the car to my house that I had selected and I drove it back (the test drive). When we got to the dealership, I walked in, signed the prepared paper work, gave them my check and I was gone in less than 15 mins. That's how car buying should be! YMMV
 
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bmcgonig said:
I'll be buying a 2019 or so car in the near future, and am thinking of going to Carmax. They advertise no haggle prices and refund after 7 days and things like that. Had anyone here used them or know much about them?
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Nope, not Carmax. The last couple of cars I have bought were also one model year old, but never sold. Two were new in the dealer inventory, found with online search. One was sold as "Certified Used" but was a never-sold car driven by a manufacturer employee. Probably a zone rep or zone service rep.

These new cars can be less expensive than a similar age used one and come with the full mfg. warranty. Something to think about anyway.
 
bmcgonig said:
I'll be buying a 2019 or so car in the near future, and am thinking of going to Carmax. They advertise no haggle prices and refund after 7 days and things like that. Had anyone here used them or know much about them?
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I bought my 2017 Expedition at Carmax last year. Very quick and painless, no pressure about anything, no hidden defects, decent price.
 
My experience with CarMax was very positive. DD had her heart set on a specific make model and color. This was due to a sleazy local dealer that sold her dream car out from under us. Just so happened CarMax had one ~100 miles away and they transferred it to the local store for $75. She even got the CM extended warranty and it was honored by the local OEM dealer. If they have a car that does not sell in xx days they lower the price. I sold them a pickup truck and it was quick and painless.
 
When I traded in my car before buying a new car at the dealer the salesman have me a good price which I accepted for my trade-in. He didn't even notice that several lights in the interior of the car and dashboard were out and the fuel gauge read empty when I drove the car to the dealer basically on fumes. Tip- trade in your car during the day preferably in sunlight.
 
^^^^^
Caveat Emptor
 
bmcgonig said:
I'll be buying a 2019 or so car in the near future, and am thinking of going to Carmax. They advertise no haggle prices and refund after 7 days and things like that. Had anyone here used them or know much about them?
Click to expand...

I purchased an off lease F-150 from the in 2018. The process was fairly easy but the original truck I ordered (it was being shipped in) was damaged in transit. I wasn't told about it until I showed up, and wasn't very happy about it. The good news was I was able to get another truck with a nicer trim level for the agreed upon price of the original truck. The price was fair (at the time) and oddly enough...I sold that truck a couple years later to Carvana for more than I paid for it.

I recently purchased an older Accord and *almost* bought one through Carmax. I say almost because after doing some research, I figured out that their prices were not very competitive and were valued higher than they should have been. Example: I bought an 85K mile 2012 Accord for about $10K from a traditional dealer. Carmax had a couple 2010/2011 Accords (same trim level) with over 100K miles and they were asking $12-13K. So, while they make it easy to buy (no haggle), I think you need to be aware of the values...you could get taken if you aren't careful.
 
Car-Guy said:
... Plus paying cash is faster too. ...
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I think generally speaking you're right, but I do remember trying to close on in all cash deal with the dealer back in the 1990s and they were totally flummoxed as to how to process a purchase where I was just writing a check and no loan was involved.
 
pb4uski said:
I think generally speaking you're right, but I do remember trying to close on in all cash deal with the dealer back in the 1990s and they were totally flummoxed as to how to process a purchase where I was just writing a check and no loan was involved.
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That surprises me. I've bought all my cars since the 70s by paying cash and the dealer has never even raised an eyebrow when I handed him a personal check. People here talk about having to get a bank check but such a thing was never even mentioned in my case. I don't think I have such an impressively honest face that they would bypass their procedure, but you never know. :D
 
MrsHaloFIRE said:
i worked at a car dealership in the HR dept. Lets just say it was a fulltime job getting the salesman sales licenses and approved to drive on the dealership insurance policy because of all the DWIs they had. Not a fun time. Very sleazy.
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I worked for a major auto manufacturer for 24 years, and dealt with dealerships all day long.

The dominant dealer in our market cut a deal with his insurance company to get a $200K yearly discount on his insurance if they'd purge their ranks of employees that had 3 or more moving violations. It was a business decision to fire a few dozen employees (in 8 local dealerships)--some of which were really great employees and salesmen. But $200K is $200K.

Many of the salesmen ended up at one area dealership. Every Monday morning, we'd get a phone call where one of their demonstrators had been totaled out. After so many wrecks, the dealership was hit with a 10% deductible. Then 20% deductible. Some of the salesmen were old time car men and alcoholics obviously. It was somewhat amusing.

Times have changed, and I've noticed the good, career automobile salesmen to be harder to find. Now, I see bilingual salesmen and sales managers and even salesmen from all over the world. It's difficult to find people willing to work from 9:00 to 9:00 6 days a week with marginal employee benefits and the promise that if they don't meet their sales objectives they're going to be fired.
 
OldShooter said:
Yes. I did that too when I bought a Mazda RX-8 about 10 years ago. $2,500 free money. The F&I guy knew what I was doing and advised that I make the payments until the title came through the state DMV and I got my mailed copy. He said things could get screwed up if Mazda processes a lien release while the title was in process. I took his advice, so my $2,500 probably cost me $200 in interest.

Looking back, I probably should have asked how small a loan I could take and still get the spiff.
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I think I got the title after I paid off the loan. Anyway, there were no issues. I"m sure the sales guy got his commission. It's the loan company that was not happy. The key to this whole thing (IMHO) is figuring out everything on the website. They posted a copy of the loan agreement, I read through that. Clicked around to make sure I understood the payoff amount, the interest accrued etc. I did not talk to a single person. Although, the sales guy helped us after the purchase with figuring out all the electronic detail.
 
After spending 24 years working for a major auto manufacturer, I've seen every dealer trick and shenanigan there is. But someone will always seem to come up with a new angle to buying and leasing. It's pretty much a month to month high pressure business, and if you do a great job and exceed your objectives, the companies just raise sales and profit goals to ridiculously high levels.

I could write a book on the auto business and the way people are treated. But I've been out of the business since 1996 and things have changed somewhat.

I still find the end of a sales program to be a great time to buy vehicles, especially the Friday before the end of a month. There are national sales incentive programs in force and if sales are lagging the dealership's region can come up with unpublished sales incentive programs to push them over the top. This is often seen even more often at the end of December, March, June and September.

Car dealers are terribly competitive, and there is often a pecking order in any given big city retail market. There will always be one dealer that sells cars cheaper than others, and the dealers often will cut prices in order to knock them out of a sale. The trick is to find that dealer that sells cheaper and to build a relationship with them.

Another angle is to do business with an independently owned car dealer. I am not a fan of buying from national chain stores as their Documentary Fees of $799 is simply profit and not something independent dealers have to charge. And those national stores will attempt to hammer buyers on the "back end." I'm talking Extended Service Plans, Credit Life Insurance and Accident and Health Insurance, and GAP insurance among other big profit makers.

I quickly tell the F&I guys they call "Business Managers" that I've also gone to all the F&I schools and am also a fully trained F&I guy. They leave me alone and are quick to get me out the door. I also have found dealing with internet managers is a good way to do business if you know what's a fair price for a vehicle. And I always arrange for my own money asking for their "out the door price."
 
Rianne said:
I think I got the title after I paid off the loan. Anyway, there were no issues. I"m sure the sales guy got his commission. It's the loan company that was not happy. The key to this whole thing (IMHO) is figuring out everything on the website. They posted a copy of the loan agreement, I read through that. Clicked around to make sure I understood the payoff amount, the interest accrued etc. I did not talk to a single person. Although, the sales guy helped us after the purchase with figuring out all the electronic detail.
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Just to clarify, my impression is that all these financing "deals" come from the manufacturers' captive finance companies Mine came from Mazda's. There would be no reason for an independent lender to offer deals unless the manufacturer was compensating them. I interpret the $2500 I got as simply a discount on the car with a string attached -- Mazda hoping to get a few bucks back by profiting on the loan.

One other caveat: In our state prepayment penalties on loans are illegal. I don't know that to be true everywhere. So that has to be the first question if someone is looking at one of these maneuvers.
 
There's simply no way I would use Carmax but I would recommend them for someone looking to get a used car who knows nothing about cars. You'll pay a premium for them to weed through the chaff. However, if you know cars well enough to identify the condition, or have a mechanic who will for you and you are willing to do the legwork of getting private sellers to have their car inspected by your mechanic, then you'll save roughly 25 to 30% over Carmax costs.

I never tell the dealer I want an out-the-door price. If they get whiff I have that much cash at my disposal, they'll try to grab more of it. I always let them work it out as if I'm barely able to qualify for a loan or very unwilling to put anything down. Then when I get to the finance guy for paperwork, I tell HIM I'm paying cash. They don't like it, thinking they were gonna get some extra though financing, but too bad.
 
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