Car Dealership Shenanigans

[youbet]

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.

Same here. Just bought a Toyota from a dealer. While the sales guy was the normal sleezebag, we got through the process without coming to blows. The least aggravating part was paying. Wrote a personal check for the agreed upon amount and was done.

 

[bmcgonig]

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.

Normally I'd be in your side of the fence but from everything I've looked at over the last couple months, Carmax is about 5% or thereabouts over the national competition. Im using cargurus as the competition. I'm ok with 5% given the convenience and the fact that they will ship in a car from a different state if necessary ( sometimes free sometimes not)

 

[CRLLS]

My experience with CarMax was pleasurable. Based on my one transaction, I will say that they don't do well in selecting top of the line vehicles for their lots. A couple of years ago, I was looking for a Ford Escape Titanium with a towing package. They had only one car on the lot that met my wants. When we opened the car, it reeked of cigarette smoke so bad that it was like a frat party was held in it yesterday. No way was this my car. I wanted to drive it anyway just to see what one drove like, never having driven one. When we got back from the test drive, the sales guy was so apologetic. No deal.

Long story short, they cleaned and double cleaned out the car and asked me to come back the next day to see what a good job they did. They also disclosed that it had been in a small accident. The service guy and I went over the entire car to find any trace of the repairs. We looked at factory spot welds, door gaps etc. We then put the car up on a lift looking for any detectable signs of damage repair. There was none found other than some barely detectable repaint found. Whoever the body shop was, they did a very good job. The car was priced accordingly. We ended up buying it hoping to get the remaining smell out. We eventually did with the help of an industrial ozone generator.

I found CarMax to be above board and honest. I would recommend them to others.

 

[youbet]

Before buying a certified used Toyota recently, I checked CarMax (among others) and found them to be relatively pleasant to deal with. The Toyota dealer's staff was sorta sleazy and it was frustrating getting them to believe that I wasn't going to pay for finish sealers, fabric protectors, extended warranties and all the usual crap. So I had to listen to the sales pitches which I assume their management mandated they do.

But, we had located a car we wanted at this local dealer via their Internet site, reviewed the CarFax and found their price to be very good and their warranty better than the non-dealer outlets. So, despite preferring the CarMax folks to deal with, we purchased from the Toyota dealer because their deal was better.

It was surprising that CarMax couldn't beat buying CPO from a dealer.

 

[pb4uski]

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.

In most cases my financing "bonuses" were through the manufacturer's finance company, but the last one was a local bank and I was surprised at that. I'm guessing that they make enough interest on the loans that stay to make up for the fact that some pay off early.

And I agree on the last part and always ask them to show me on the loan document where it says that there is no prepayment penalty. Did I mention that I don't trust them... at all.

 

[skipro33]

Just to clarify my lack of enthusiasm for Carmax, I found them to be pleasant, but not able to provide me a decent price on a car or on my trade in. Here's what I did; I went to Carmax looking for MY car, the same I was planning to trade in; year, make model, miles, etc. They offered me a choice of a few from $15,000 to $18,000. Later I bought in my car for sale. They offered me $8,000. Mine had less miles, always garaged and far as I could tell, as clean as a new car but without the new car smell. So, marking up a car 100%, from $8,000 to buy it from me to $16,000 to sell it to the next guy put me in the mood to sell it myself. Which I did on craigslist. Sold in a couple days for cash at $12,000.
Usually folks on this forum are tighter with a buck than Scrooge McDuck himself, so I am at a loss as to how folks find Carmax to be anything more than just a pleasant experience. Heck, any car dealer would be a pleasant experience with that kind of mark up and customers willing to pay. It's only when you try to dicker a dealer down do they work at keeping as much of your money as they can.

 

[Rianne]

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.

The very contract I signed was on the website and it stated there was no pre payment penalty. Yes, I believe that is illegal.

 

[CRLLS]

The very contract I signed was on the website and it stated there was no pre payment penalty. Yes, I believe that is illegal.

Just a caution for others, make sure that the contract on the website that you review is the one that you sign. It could be that the website is out of date, or there are different "contracts" for different "customers". It wouldn't be the first time. What one signs is the legal document, not the one on the website.

 

[Car-Guy]

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.

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.

I haven't taken out a loan on a car (or anything for that matter) since the mid 90's.... Some transactions have even been for "folding cash" but most cash deals I've done have been with checks... Sometimes using folding cash is preferred . But I have never had anyone balk at taking cash.

 

[pb4uski]

I didn't say that they balked at taking cash... they just didn't know how to process a sale for cash.... it seemed like a foreign concept to them. But I have done a few cash sales with other dealers since that were seamless, so that one time may have been an anomaly.

 

[Car-Guy]

I didn't say that they balked at taking cash... they just didn't know how to process a sale for cash.... it seemed like a foreign concept to them. But I have done a few cash sales with other dealers since that were seamless, so that one time may have been an anomaly.

Just semantics - to me no matter why they didn't just grab the cash/check, it's balking. Or maybe I didn't know the meaning of "flummoxed". I'm just a simple Texas boy. However it really doesn't matter... But I think you are right, it was probably a one off.

 

[Souschef]

One problem with paying cash is if it over $10K, the dealer will file a Form 8300 with the IRS and send you a copy.

 

[CardsFan]

One problem with paying cash is if it over $10K, the dealer will file a Form 8300 with the IRS and send you a copy.

And? What is the issue?

 

[Car-Guy]

^^^^^ Several, but potential money laundering is high on the list


Banks must file CTR's on any cash coming in over 10k... They file SAR's too if they are suspicious of the transaction(s)... And they won't tell you they are filing the forms nor will they send you a copy.


Just easier to say big brother is watching.

 

[travelover]

One problem with paying cash is if it over $10K, the dealer will file a Form 8300 with the IRS and send you a copy.

That's odd. Paid cash for the last two cars and got no form 8300.

 

[CardsFan]

^^^^^ Many, but potential money laundering is on the list

I am talking about a check. I guess walking into a dealer with 500, $100 bills could be a problem.

 

[Car-Guy]

I am talking about a check. I guess walking into a dealer with 500, $100 bills could be a problem.

Never heard of any issues with a check.. And I never got any 8300 forms even when the check was over 100k.

 

[pb4uski]

Just semantics - to me no matter why they didn't just grab the cash/check, it's balking. Or maybe I didn't know the meaning of "flummoxed". I'm just a simple Texas boy. However it really doesn't matter... But I think you are right, it was probably a one off.

Totally different concepts.

 

[Car-Guy]

^^^^^^



Actually I knew the meaning of flummoxed and balked. Hadn't heard flummoxed recently. Often hear the word balked but usually in a baseball context.

Read my posts closely... In summary, because they were flummoxed they balked at the transaction.

 

[CardsFan]

Never heard of any issues with a check.. And I never got any 8300 forms even when the check was over 100k.

I think we are in agreement.

Actually, when we bought DW's car a few months ago, I told them I needed to sell some funds and it would be 2-3 days until it settled. They said no problem, give us the check and we will hold it for 3 days before cashing.

We drove away with a $4x,xxx car, and they had a check they knew would bounce if they cashed it that day.

Yeah, I know, they held the title filing, etc.

 

[Car-Guy]

I think we are in agreement.

Actually, when we bought DW's car a few months ago, I told them I needed to sell some funds and it would be 2-3 days until it settled. They said no problem, give us the check and we will hold it for 3 days before cashing.

We drove away with a $4x,xxx car, and they had a check they knew would bounce if they cashed it that day.

Yeah, I know, they held the title filing, etc.

I've written checks that I didn't have enough in a particular account to cover... As soon as I would get home I'd do a quick funds transfer... Hate to do that.


But on-line banking is a wonderful thing.

 

[CoolRich59]

Yes, loans & leases & service are the money makers. We, cash payers, are pariahs - which tells u what u should do.

Yep. I recall an article in the WSJ earlier last year where it described that financing was how dealers made their money these days.



They are really interested in people with 60 and 72 month loans who are willing to roll the remainder of their existing loan into a new car such that they are financing both the new car and the remainder of their previous car.

 

[JoeWras]

The shenanigans are complicated by our local powerful media moguls. These TV station owners will place story after story on their news about disadvantaged people, tug at heartstrings, rally for change to government, etc. Fine.

But they don't talk about the day to day issues we face at dealerships. They won't rally the government to limit junk doc fees. In my case, North Carolina is known to be one of the worst states for doc fee shenanigans due to complete lack of laws and regulations in this area, compared to other states. This is just one example.

Why? Because our moguls make a huge amount of money from auto stealerships in ad revenue. Car dealerships pay for your news and local programming.

Money talks. Blinders go up in the newsroom. Your local consumer reporter won't touch the subject. Strange bedfellows are made.

The cool thing is that the subject is almost completely bipartisan. Something everyone in power (both political parties and local media moguls) can agree on. Nice.

 

[SmallCityDave]

Is the 0% financing offered on new cars real? Is it impossible to qualify for or part of some kind of a bait-n-switch tactic?

From my experience it's real.not real you can choose 0% or $2000 off but not both.

 

[SmallCityDave]

My recently FIREd DGF found it impossible to buy a new or used car at a local dealership. We went to lot and requested a specific vehicle that's apparently rare because of the desired color. The salesman located two new 2020's out of state and we negotiated a price. As we were on the way to the dealership to buy a car they called and told us they were BOTH sold. We walked across the lot and talked to their used car manager. He found a 2019 vehicle that met our specs at another dealership. Great! We put a $500 deposit on it on Tues. night to reserve the vehicle. After returning to the lot Wed. afternoon and spending over an hour with the salesman confirming features, warranty and whatnot, the manager came out and told us that the car was already sold and offered to refund the $500 deposit. He had never done anything with the deposit to reserve the vehicle.


So, why did the dealer refuse to take our money? Is it because we were paying cash? After spending some quality time with google, we found another copy of this 'rare' vehicle out of state with less mileage, and same warranty. We contacted the remote dealer and he appears very willing to sell us the car at significantly less than the local dealer.


Why would the local dealer not have found this particular car, marked the price up, and taken our cash? I don't know if they really didn't have access to the vehicles or hoped to bait and switch us to a more expensive vehicle that required financing.



Is financing the only way they make money these days?

My "guess" is that they agreed on a price with you but they were negotiating with the other dealership to increase their profit and the other dealership sold it at full retail.