New car buyers...you should consider financing

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protagonist
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New car buyers...you should consider financing

Post by protagonist » Mon Nov 20, 2017 9:50 am

I'm a "pay with cash, hate any debt" guy.
That said, I took a new car loan at 5.9%, and I will explain why. I think my story is common.

When I offered to pay cash, the dealer said he could offer a loan at 0.9% (some say 0%), and I said fine, knowing I am making 1.35% in an internet bank account.

Then when I went to pay the "finance manager" pulled a bait and switch.

He told me that to get that rate I needed to pay more for the car. I got a special incentive for financing.

So I said, "Fine, give me the 5.9% loan....I will pay it off tomorrow".

But that was not the only catch.

There was an $85 fee to get the loan, that was not called a fee....there was some kind of obfuscating language buried deep in the contract. I insisted he remove it since I was paying more for the car than we agreed, and he did. Don't take "no" for an answer. Just check the paperwork carefully to make sure that the final price you are paying for the car is not one penny over your negotiated price or walk out.

He really wanted to give me the financing, so the next thing he did was write 3 months of financing payments into the contract and said that I can easily pay it off after 3 months. I said...no...I want to pay it off tomorrow. He hemmed and hawed and tried to scare me by saying that if I did I wouldn't get my title for up to a year. Whatever. I said I didn't care. His last ditch effort was a guilt trip....a plea to help them out since they were giving me such a good deal on a car. I said I would rather help my daughter out, thanks.

I took the 5.9% loan. That was Saturday. Make sure you get the name and phone number of the finance agency.

I called the finance agency this morning (Monday). They said I couldn't pay it off yet because they don't have an account number for me...they have to get it from the dealer. I said that I am paying interest, you own my car, and if I can't pay it off today I will report to the MA Consumer Protection Agency. She got me a supervisor who immediately said "No problem. We will get your account number by 4 PM today and you can pay it off". All was handled professionally with no raised voices or arguments.

I imagine this scenario is more typical than an exception. Keep it in mind when you buy a new car.

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JupiterJones
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Re: New car buyers...you should consider financing

Post by JupiterJones » Mon Nov 20, 2017 10:04 am

What a pain. Actually, your story makes me not want to consider financing.
Stay on target...

researcher
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Re: New car buyers...you should consider financing

Post by researcher » Mon Nov 20, 2017 10:09 am

It is not clear why you decided to finance the vehicle at 5.9%, or why you are suggesting that others should consider financing.

You stated that when you offered to pay cash, they offered you 0.9% financing.
You agreed to this because you can earn more in your savings account.

But when they said you'd have to pay more for the car to get the 0.9% rate, why didn't you just say...
"Never mind then, I'll just pay cash for the car like I intended to before you offered the 0.9% rate."

What was the point of you financing the car at 5.9%? Why didn't you just pay cash?

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BolderBoy
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Re: New car buyers...you should consider financing

Post by BolderBoy » Mon Nov 20, 2017 10:18 am

researcher wrote:
Mon Nov 20, 2017 10:09 am
What was the point of you financing the car at 5.9%? Why didn't you just pay cash?
My understanding of the OP's post is that the final price of the car was tied directly to the financing interest rate and the lowest price offered was for the 5.9% rate.

After I read the OP and about the dealership's shenanigans, I felt like I needed to bathe.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

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goingup
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Re: New car buyers...you should consider financing

Post by goingup » Mon Nov 20, 2017 10:23 am

protagonist wrote:
Mon Nov 20, 2017 9:50 am
I'm a "pay with cash, hate any debt" guy.
That said, I took a new car loan at 5.9%, and I will explain why. I think my story is common.

When I offered to pay cash, the dealer said he could offer a loan at 0.9% (some say 0%), and I said fine, knowing I am making 1.35% in an internet bank account.

Then when I went to pay the "finance manager" pulled a bait and switch.

He told me that to get that rate I needed to pay more for the car. I got a special incentive for financing.

So I said, "Fine, give me the 5.9% loan....I will pay it off tomorrow".

But that was not the only catch.

There was an $85 fee to get the loan, that was not called a fee....there was some kind of obfuscating language buried deep in the contract. I insisted he remove it since I was paying more for the car than we agreed, and he did. Don't take "no" for an answer. Just check the paperwork carefully to make sure that the final price you are paying for the car is not one penny over your negotiated price or walk out.

He really wanted to give me the financing, so the next thing he did was write 3 months of financing payments into the contract and said that I can easily pay it off after 3 months. I said...no...I want to pay it off tomorrow. He hemmed and hawed and tried to scare me by saying that if I did I wouldn't get my title for up to a year. Whatever. I said I didn't care. His last ditch effort was a guilt trip....a plea to help them out since they were giving me such a good deal on a car. I said I would rather help my daughter out, thanks.

I took the 5.9% loan. That was Saturday. Make sure you get the name and phone number of the finance agency.

I called the finance agency this morning (Monday). They said I couldn't pay it off yet because they don't have an account number for me...they have to get it from the dealer. I said that I am paying interest, you own my car, and if I can't pay it off today I will report to the MA Consumer Protection Agency. She got me a supervisor who immediately said "No problem. We will get your account number by 4 PM today and you can pay it off". All was handled professionally with no raised voices or arguments.

I imagine this scenario is more typical than an exception. Keep it in mind when you buy a new car.
protagonist-
How much did you save by doing all that? I'm not sure what $$ amount would be worth it to me to go through all that irritation. I'm a cash-buyer in cars to avoid the kind of scenario you went through (and will continue to wrestle with). :| I hope it was worth it!

pennywise
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Re: New car buyers...you should consider financing

Post by pennywise » Mon Nov 20, 2017 10:27 am

JupiterJones wrote:
Mon Nov 20, 2017 10:04 am
What a pain. Actually, your story makes me not want to consider financing.
I refuse to indulge in that silliness when purchasing a car. I'd never have allowed the conversation to devolve into accepting a bogus higher interest for financing after the deal is already closed. If the dealer reneged on the price at the last minute I would have thanked him for his time and left with no car and all my cash. I"d bet a car payment that would have stopped that game in its tracks.

As for haggling post purchase with the finance company, no way! I have to haggle enough in life for stuff that I can't avoid, why in the world would I deliberately set myself up to do it because of a bait n switch at the car dealership!?

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Re: New car buyers...you should consider financing

Post by The Wizard » Mon Nov 20, 2017 10:28 am

I've never done car financing through a dealer and I'm not starting now...
Attempted new signature...

KlangFool
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Re: New car buyers...you should consider financing

Post by KlangFool » Mon Nov 20, 2017 10:29 am

BolderBoy wrote:
Mon Nov 20, 2017 10:18 am
researcher wrote:
Mon Nov 20, 2017 10:09 am
What was the point of you financing the car at 5.9%? Why didn't you just pay cash?
My understanding of the OP's post is that the final price of the car was tied directly to the financing interest rate and the lowest price offered was for the 5.9% rate.

After I read the OP and about the dealership's shenanigans, I felt like I needed to bathe.
BolderBoy,

1) OP should ask the dealer for the price that he needs to pay to take the car home.

2) OP should not sign the deal and just walk away from the car. But, for whatever reason, he chooses to trust and proceed with the deal when it smells bad.

In summary, if the deal smells bad, walk away. In fact, if the person does not sound honest, just walk away. You as the customer does not have to put up with people that you cannot trust.

KlangFool

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jazman12
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Re: New car buyers...you should consider financing

Post by jazman12 » Mon Nov 20, 2017 10:31 am

thax for the post
I'm about to take a walk into the new car jungle for my wife and I am dreading even the thought of it.
Act soon... time is running out

protagonist
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Re: New car buyers...you should consider financing

Post by protagonist » Mon Nov 20, 2017 10:45 am

researcher wrote:
Mon Nov 20, 2017 10:09 am
It is not clear why you decided to finance the vehicle at 5.9%, or why you are suggesting that others should consider financing.

You stated that when you offered to pay cash, they offered you 0.9% financing.
You agreed to this because you can earn more in your savings account.

But when they said you'd have to pay more for the car to get the 0.9% rate, why didn't you just say...
"Never mind then, I'll just pay cash for the car like I intended to before you offered the 0.9% rate."

What was the point of you financing the car at 5.9%? Why didn't you just pay cash?

Bait and switch.

If I took 0.9%, they would have removed a $500 incentive for the car.

Why not take 5.9% financing (or any financing) if you can pay the entire loan off the next day after paying a few dollars of interest to save $500 ???

And no, it wasn't as big a pain in the neck as I made it sound. Probably involved 10 minutes of discussion with the finance officer at the dealership and a 10 minute phone call to the finance company. There were no hostile exchanges. Saved me a few dollars short of $500 including my finance charges. Even when working as a physician I didn't make close to $1500/hour (and I had to work a lot harder).
Last edited by protagonist on Mon Nov 20, 2017 10:50 am, edited 1 time in total.

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BolderBoy
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Re: New car buyers...you should consider financing

Post by BolderBoy » Mon Nov 20, 2017 10:49 am

jazman12 wrote:
Mon Nov 20, 2017 10:31 am
thax for the post
I'm about to take a walk into the new car jungle for my wife and I am dreading even the thought of it.
Do a search here on the forum for "new car purchase" and the like. There are some excellent "how-to" postings that make the process MUCH more sanitary than OP's experience.

And Klangfool's advice is salient - be prepared to turn on your heel and walk away instantly.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect

protagonist
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Re: New car buyers...you should consider financing

Post by protagonist » Mon Nov 20, 2017 10:54 am

BolderBoy wrote:
Mon Nov 20, 2017 10:49 am
There are some excellent "how-to" postings that make the process MUCH more sanitary than OP's experience.
I agree. This is more of a real life experience post as an addendum to those you mention, addressing some fine points that you may encounter ("tricks of the trade"). I think I made it sound much more difficult than it actually was. Really, I didn't spend more than 20 minutes doing this. Posting, reviewing and replying to the posts on this thread is taking at least as much time.
And Klangfool's advice is salient - be prepared to turn on your heel and walk away instantly.
Definitely.

researcher
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Re: New car buyers...you should consider financing

Post by researcher » Mon Nov 20, 2017 11:18 am

protagonist wrote:
Mon Nov 20, 2017 10:45 am
If I took 0.9%, they would have removed a $500 incentive for the car.
Why not take 5.9% financing (or any financing) if you can pay the entire loan off the next day after paying a few dollars of interest to save $500 ???
You're saying the $500 incentive would have been removed had you taken the 0.9% financing rate.
But you did not take the 0.9% rate!

Are you saying the $500 incentive was only available if you took their financing AND the loan rate was >0.9%?

What make/model vehicle did you purchase? I've never seen manufacturing incentives structured this way.

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Re: New car buyers...you should consider financing

Post by bloom2708 » Mon Nov 20, 2017 11:40 am

JupiterJones wrote:
Mon Nov 20, 2017 10:04 am
What a pain. Actually, your story makes me not want to consider financing.
+1

Did you mean to title your post "...you should NOT consider financing"?
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DrGoogle2017
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Re: New car buyers...you should consider financing

Post by DrGoogle2017 » Mon Nov 20, 2017 11:43 am

I would have just walked out without buying the car.
Last edited by DrGoogle2017 on Mon Nov 20, 2017 12:38 pm, edited 1 time in total.

omgbirdman
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Re: New car buyers...you should consider financing

Post by omgbirdman » Mon Nov 20, 2017 11:59 am

researcher wrote:
Mon Nov 20, 2017 11:18 am
You're saying the $500 incentive would have been removed had you taken the 0.9% financing rate.
But you did not take the 0.9% rate!

Are you saying the $500 incentive was only available if you took their financing AND the loan rate was >0.9%?

What make/model vehicle did you purchase? I've never seen manufacturing incentives structured this way.
Disclaimer: I am not OP.

I suspect you had to finance through the dealership to receive a $500 incentive. The .9% rate was not through the dealership. 5.9% was the dealership's finance offer.

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Alexa9
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Re: New car buyers...you should consider financing

Post by Alexa9 » Mon Nov 20, 2017 12:25 pm

I told the dealer that I would finance or pay cash whatever they preferred and would get me a lower OTD price. There are sometimes incentives either way.

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Re: New car buyers...you should consider financing

Post by nisiprius » Mon Nov 20, 2017 12:33 pm

protagonist wrote:
Mon Nov 20, 2017 9:50 am
I'm a "pay with cash, hate any debt" guy.
Stop right there.
That said, I took a new car loan at 5.9%.
Oops.

Skimming over your story. Obviously neither the dealer nor anybody else expects you to take out a loan and pay it back the next day--or makes money when you do. So my impression is that you pulled a perfectly a legal but slightly unethical trick (in retaliation for all the customary legal-but-unethical tricks dealers customarily do to everyone), and it was harder than you expected, but eventually you scored a small win. Congratulations!

I am, however, reminded of an interview I read once with a car salesman who said "I sell three cars every day, you buy one car every three years, and you come in and think you are going to get the better of a deal with me?"

(My personal approach to car buying is to assume I am going to get rooked, not worry too much about that, and focus on walking out with a car I really want. One of the things that makes me feel "rich" is feeling that I can afford to get cheated in small ways).
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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Re: New car buyers...you should consider financing

Post by chinchin » Mon Nov 20, 2017 10:01 pm

Got pre-approved for a loan from a credit union. Went to dealer. Test drove a car. Sat down to go over the deal. Was told that to buy the car I would have to fill out a dealer credit application first. Argued that was BS. Said I wanted to pay cash to avoid the BS. They said they did not like to accept personal checks (went on several minutes explaining why what was a bad idea) and but if I did write one, I could not take delivery until the check cleared. Eventually they let me do the CU financing if I filled out a CU application. Thought it was stupid since I already had CU pre-approval but I did it just to move the process forward (mistake). Manager comes back with a quote and asks me to sign it. It has in small print that the financing will be through the dealer. Went home and now I will never do business with them ever again and probably will not buy that brand of car (Toyota). Do they give better service at the slightly higher end dealers (e.g. Audi, Lexus, etc?)

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Re: New car buyers...you should consider financing

Post by prince » Tue Nov 21, 2017 6:37 am

I hate the bait and switch, it happens so often now no one is surprised. Like even while it was happening I'm like "really? you are doing this right in my face so obviously?!" I walked and they had no qualms about it knowing if I'm not a sucker the next guy is. Since then my last two cars were bought at Carvana and I could not have been happier. Carmax has good prices too but Carvana was extremely convenient for me without any of that "dealer fee" nonsense.

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DaftInvestor
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Re: New car buyers...you should consider financing

Post by DaftInvestor » Tue Nov 21, 2017 6:49 am

I would have walked out on the bait and switch.
Plenty of other dealers in my area that would match a negotiated price - I would never be comfortable giving my hard earned money to a sleezy one - I am not sure why you felt compelled to do so.

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Re: New car buyers...you should consider financing

Post by yatesd » Tue Nov 21, 2017 7:05 am

On my last two purchases, I did two things ahead of time. Got a guaranteed trade-in value from CarMax and looked online to see the lowest interest rate available to me through my own financing options (non-subsidized). I negotiated price & trade-in and agreed to use their financing as long as they could match.

Both purchases were "no hassle" experiences.

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Re: New car buyers...you should consider financing

Post by midareff » Tue Nov 21, 2017 7:58 am

PenFed is offering 1.49% 36 month financing on new cars up to $100K. Apply in advance, get a draft and use it for the amount you choose. Took that deal (if was 60 month then) for my car and paid it off in 4.5 years. Can you make more than 1.49% in the market? VWIUX is distributing 2.8% tax free so I don't need a lot of time to think about this as I ordered my next car earlier in the month.

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Re: New car buyers...you should consider financing

Post by nhdean » Tue Nov 21, 2017 8:11 am

It is unfortunate that this particular dealership is being shady. In most cases the subsidized interest rate usually means you give up a rebate to have it. The finance person marked up the rate substantially to 5.9% because he makes money on the the difference from the buy rate from the bank and what he charges. If you have good credit 5.9% is really way to high of a rate to get for a car loan right now anyways. If you pay it off before the the third payment the dealership gets charged back and he loses the money had made off of you. He actually flat out lied to you about the title taking up to a year to get to you.

I would let the general manager know of his practices. It may not do anything, but in man cases the dealership is completely unaware of what he is doing.

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Re: New car buyers...you should consider financing

Post by Lynette » Tue Nov 21, 2017 8:24 am

When I bought a new car two years ago, I think that the Dealer got an incentive from the manufacturer who owned a credit company. I was OK with that as I had suddenly decided to buy a new car when a good deal came up and I did not have the cash as I had to move my money around to pay it off. The hassle was that I had to unfreeze my credit with the credit bureaus. The dealer told me that the manufacturer would be extremely displeased with them if they did not do this. I always buy a new car late in the year when the dealers are trying to sell of the current year's models. I got nearly $10,000 off a car by searching the manufacture's website of available cars. I went home and unfroze my accounts and came back about one hour later and took delivery of my new car.

protagonist
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Re: New car buyers...you should consider financing

Post by protagonist » Tue Nov 21, 2017 1:28 pm

nisiprius wrote:
Mon Nov 20, 2017 12:33 pm
protagonist wrote:
Mon Nov 20, 2017 9:50 am
I'm a "pay with cash, hate any debt" guy.
Stop right there.
That said, I took a new car loan at 5.9%.
Oops.

Skimming over your story. Obviously neither the dealer nor anybody else expects you to take out a loan and pay it back the next day--or makes money when you do. So my impression is that you pulled a perfectly a legal but slightly unethical trick (in retaliation for all the customary legal-but-unethical tricks dealers customarily do to everyone), and it was harder than you expected, but eventually you scored a small win. Congratulations!

I am, however, reminded of an interview I read once with a car salesman who said "I sell three cars every day, you buy one car every three years, and you come in and think you are going to get the better of a deal with me?"

(My personal approach to car buying is to assume I am going to get rooked, not worry too much about that, and focus on walking out with a car I really want. One of the things that makes me feel "rich" is feeling that I can afford to get cheated in small ways).
I pulled an unethical trick???
Hardly.
Sequence of events:
1. Dealer gave me price on car and told me I could only get that price if I took a loan. He told me loan was at 0.9%. I agreed. I still "hate any debt" (as I stated), but if I can make 50% more in interest by taking a loan and leaving my money in the bank (in this case at 1.35%), I will jump at it.
2. As we were doing the paperwork, finance officer pulled bait-and-switch and said that if I wanted the price offered I could only get it by paying 5.9%, or the car would cost me $500 more.
3. I immediately thought of just walking out in anger as some suggested, but I spent a lot of time and effort to get to this point. If I did that, both the dealer and I would have lost- I would have had to start at square one without the car I wanted and worked so hard to get, and the dealer would have lost the sale he worked so hard to get.
So I told the dealer I was willing to take the 5.9% deal but I would pay off the debt the next day. I was honest and transparent. The dealer also could have walked away at this point and lost the sale. Instead, with minimal haggling, we both got what we wanted...I got the car at the agreed price (plus about $10 in finance charges but whatever), and he got the sale. Win-win. Two pretty happy people, rather than two angry people.

My whole purpose in starting this thread was to point out a financing trick played by car dealers and a way to deal with it that worked for me. I assumed this trick was a common one. I thought my strategy might be helpful to others faced with the same situation. I am sorry if this rubbed some the wrong way, but I maintain that I did the right thing, saved myself a lot of hassle, and the outcome was the best possible for all parties under the circumstances.

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Re: New car buyers...you should consider financing

Post by bgf » Tue Nov 21, 2017 2:04 pm

no wonder carmax exists.
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Re: New car buyers...you should consider financing

Post by pennywise » Tue Nov 21, 2017 2:05 pm

protagonist wrote:
Tue Nov 21, 2017 1:28 pm

2. As we were doing the paperwork, finance officer pulled bait-and-switch and said that if I wanted the price offered I could only get it by paying 5.9%, or the car would cost me $500 more.

3. I immediately thought of just walking out in anger as some suggested, but I spent a lot of time and effort to get to this point. If I did that, both the dealer and I would have lost- I would have had to start at square one without the car I wanted and worked so hard to get, and the dealer would have lost the sale he worked so hard to get.
However, speaking for myself I never walk out 'in anger'. I never allow myself to get emotionally attached to a car to the point I feel a pang at terminating the negotiations because I 'wanted and worked so hard' etc etc. Actually I won't do that either. I've told several dealers that I don't have time to wait around--it's another trick they use. I've gone in search of that elusive manager the salesman has to talk into giving 'us' a great deal and I"ve walked in while the guys were chatting and I"ve told them I will be leaving unless they are ready to continue. I think that's the error in judgment here, IMO.

So I wouldn't have tolerated all the switch ups on the price, and as soon as the deal changed after it was concluded I would (and have) said pleasantly but firmly 'that's not what we agreed so this won't work for me.' If the salesman wouldn't return to the already negotiated arrangement I would have pleasantly but firmly said 'well, we can't come to an agreement so I'm leaving now'.

Then I would have stood up and been on my way. I guarantee the salesman would have backed down. After all, he is the one working hard to sell a car. YOU are the buyer--you have all the power in this situation, particularly if you have cash on hand. All you need to do is go somewhere else and get the car at another dealer. Or wait a week. Or a month. All of this is a mental game, nothing more. Once you convinced yourself you needed that car and that your sunk cost (hard work negotiating) was part of the transactional expense, you were done and susceptible to all kinds of flim flam.

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tarnation
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Re: New car buyers...you should consider financing

Post by tarnation » Tue Nov 21, 2017 5:54 pm

Anyone purchased one on credit card before? Navy Federal CC has 0% for a year on any purchases over $500.
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arcticpineapplecorp.
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Re: New car buyers...you should consider financing

Post by arcticpineapplecorp. » Tue Nov 21, 2017 6:22 pm

another thing worth mentioning here is read the contract closely. Not only did the OP catch something there that was not disclosed but I'm assuming s/he saw there was no prepayment penalty (charge for paying off early without them earning interest).

Those of you hoping to pay off a car loan early to avoid paying interest should make sure the contract language doesn't include "sum of digits" or "rule of 78". read more here:
With a pre-computed loan, the interest owed over the life of the loan is calculated using a standard amortization table. Once you sign on the dotted line for this type of loan, you’re obligated to pay back principal plus the full amount of interest that will accrue over the entire term of the loan.

To sum up, interest on a pre-computed loan is calculated in advance and you’re on the hook for every penny of it when you sign.
http://www.bankrate.com/loans/auto-loan ... oan-trick/
make sure it's simple interest calculation always IF you're considering financing.
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Re: New car buyers...you should consider financing

Post by nhdean » Tue Nov 21, 2017 6:38 pm

Walking out over losing the $500 rebate if you do not finance with them doesn't get you anywhere. It is a manufacturer rebate not a dealership rebate. No matter where you go it will be the same program.

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Re: New car buyers...you should consider financing

Post by jabberwockOG » Tue Nov 21, 2017 7:01 pm

pennywise wrote:
Tue Nov 21, 2017 2:05 pm
protagonist wrote:
Tue Nov 21, 2017 1:28 pm

2. As we were doing the paperwork, finance officer pulled bait-and-switch and said that if I wanted the price offered I could only get it by paying 5.9%, or the car would cost me $500 more.

3. I immediately thought of just walking out in anger as some suggested, but I spent a lot of time and effort to get to this point. If I did that, both the dealer and I would have lost- I would have had to start at square one without the car I wanted and worked so hard to get, and the dealer would have lost the sale he worked so hard to get.
However, speaking for myself I never walk out 'in anger'. I never allow myself to get emotionally attached to a car to the point I feel a pang at terminating the negotiations because I 'wanted and worked so hard' etc etc. Actually I won't do that either. I've told several dealers that I don't have time to wait around--it's another trick they use. I've gone in search of that elusive manager the salesman has to talk into giving 'us' a great deal and I"ve walked in while the guys were chatting and I"ve told them I will be leaving unless they are ready to continue. I think that's the error in judgment here, IMO.

So I wouldn't have tolerated all the switch ups on the price, and as soon as the deal changed after it was concluded I would (and have) said pleasantly but firmly 'that's not what we agreed so this won't work for me.' If the salesman wouldn't return to the already negotiated arrangement I would have pleasantly but firmly said 'well, we can't come to an agreement so I'm leaving now'.

Then I would have stood up and been on my way. I guarantee the salesman would have backed down. After all, he is the one working hard to sell a car. YOU are the buyer--you have all the power in this situation, particularly if you have cash on hand. All you need to do is go somewhere else and get the car at another dealer. Or wait a week. Or a month. All of this is a mental game, nothing more. Once you convinced yourself you needed that car and that your sunk cost (hard work negotiating) was part of the transactional expense, you were done and susceptible to all kinds of flim flam.


100% correct. Buying a car and not getting robbed and treated like a fool during the process requires a cool, unemotional, and business like approach. If the deal changes in any way even by one dollar once the purchase price has been accepted the ideal move is to quietly but quickly state that the deal is not as agreed and walk out the door. They will almost certainly call you back once they accept that you refuse to be screwed over. As others have posted the sales folks and finance guys, etc are experts and pros at lying and manipulating any one that will let them do so all to increase profit on the sale (because they believe that is the only way they "earn" more money).

pennywise
Posts: 451
Joined: Sat May 31, 2014 6:22 am

Re: New car buyers...you should consider financing

Post by pennywise » Wed Nov 22, 2017 8:57 am

tarnation wrote:
Tue Nov 21, 2017 5:54 pm
Anyone purchased one on credit card before? Navy Federal CC has 0% for a year on any purchases over $500.
The dealerships I've dealt with (South Florida, not sure of other places) have a credit card limit on purchases, usually ~$5000. I always put the maximum allowed on my credit card to get the points and pay the rest in cash. Of course I pay off the cc charge at the end of the month. That's a no brainer.

bhsince87
Posts: 1636
Joined: Thu Oct 03, 2013 1:08 pm

Re: New car buyers...you should consider financing

Post by bhsince87 » Wed Nov 22, 2017 10:23 am

I did the same thing last year. But I'll preface this with the fact that I've been doing business with this dealer for 18+ years.

After picking out the truck I wanted from their inventory, I told the salesman I was ready to buy that day, but I wanted to deal with his manager. No problem.

I told them I wanted to pay cash, but would be willing to finance if I could get a better deal. I know what that truck should sell for, so just give me a decent offer.

He took me over to their "finance guy". He ran a credit check, and poked around on his computer for about 20 minutes.

He came back with an offer: $22k down, finance $9000 at 5.9% for one year. Financing got me $750 off, and he found another $500 incentive for being a "loyal Ford customer".

So I wrote them a check for $22,000. When my first bill came a month later, I sent in a check for something like $9040, and was done with it. Easy!

All in all, I paid about $4000 less than I was prepared to pay!
BH87

snowox
Posts: 170
Joined: Wed Nov 08, 2017 9:17 am

Re: New car buyers...you should consider financing

Post by snowox » Wed Nov 22, 2017 11:47 am

Always go in being truly prepared to walk away from the deal.. At the end of the day they want to push cars out the door. Don,t tell them cash till you get your price negotiated to where you want it. IF your haggling over a small amount or interest rate get up and walk. I bet they chase you out the door. Hate buying cars so it makes me just black and white about the whole thing if I even do it.

david_that_guy
Posts: 26
Joined: Sat Oct 01, 2016 9:15 am
Location: Massachusetts

Re: New car buyers...you should consider financing

Post by david_that_guy » Wed Nov 22, 2017 11:49 am

I've been thinking of financing my next car purchase just to improve my credit score. Since I paid cash for my last 3 cars and paid off my mortgage more than 10 years ago, I have not had any loans for a long time. The credit score report always notes a lack of loans. I was thinking to pay mostly cash and have a small loan balance that I would pay off after 3 months because I read somewhere that the credit score algorithm needs to see at least 3 months of loan payments.

My credit score is very good but not near the very top. I'm not sure if it really matters or how much it would be improved by one small loan for 3 months. I'm not even sure why it bothers me that my credit score is not near the top. I guess I'm competitive about everything!

protagonist
Posts: 5291
Joined: Sun Dec 26, 2010 12:47 pm

Re: New car buyers...you should consider financing

Post by protagonist » Wed Nov 22, 2017 2:12 pm

tarnation wrote:
Tue Nov 21, 2017 5:54 pm
Anyone purchased one on credit card before? Navy Federal CC has 0% for a year on any purchases over $500.
I didn't encounter a dealer who would accept a credit card for anywhere near the whole purchase price.

My dealer took $2500 on my CC (max). The Honda dealer said $2K was his max. This is typical, at least in my region.

HardHitter
Posts: 398
Joined: Wed Jan 08, 2014 11:41 pm

Re: New car buyers...you should consider financing

Post by HardHitter » Wed Nov 22, 2017 4:28 pm

I've owned 18 cars in my 15 years of driving and I have only bought 1 car off the dealership.

I did my research knowing what is a fair price people are getting their cars for and what I'm willing to pay. I walked in, told them I want this price out the door and that was it. It took about 2 hours of negotiating and it sounded like the same kind of strategy

- Sat me down and said they couldn't do the price, but could offer close to it if I took a loan (I told them I was going to pay cash). The internet sales manager was straight forward and said if you took a loan and paid it off tomorrow, then it's more likely they'll accept the price because they make more money through financing.

- So I finally said I'd finance if they could get me the low rate they initially told me. He came back and said, good news, we got the price you want but have to finance at a higher rate. I said, OK that wasn't the interest rate you promised me, you just accepted the price and since you didn't give me the rate, I'm buying cash.

Their manager came over and tried to talk me away from it but I stayed stern and said I'm paying the price you accepted, all cash, I'll go get the money now or else you just wasted 2 hours of mine, your employees and your time for nothing.

He accepted.

The whole experience reminded me why I don't buy from dealerships.

bhsince87
Posts: 1636
Joined: Thu Oct 03, 2013 1:08 pm

Re: New car buyers...you should consider financing

Post by bhsince87 » Wed Nov 22, 2017 5:46 pm

david_that_guy wrote:
Wed Nov 22, 2017 11:49 am
I've been thinking of financing my next car purchase just to improve my credit score. Since I paid cash for my last 3 cars and paid off my mortgage more than 10 years ago, I have not had any loans for a long time. The credit score report always notes a lack of loans. I was thinking to pay mostly cash and have a small loan balance that I would pay off after 3 months because I read somewhere that the credit score algorithm needs to see at least 3 months of loan payments.

My credit score is very good but not near the very top. I'm not sure if it really matters or how much it would be improved by one small loan for 3 months. I'm not even sure why it bothers me that my credit score is not near the top. I guess I'm competitive about everything!
My credit score dropped a bit when I took out the loan. But it stayed above 800.

After I paid it off, a bit more than a month later, it crept up a bit each month for a while, until it was back to where it was earlier.

I'd say it really didn't make much difference in the big picture.
BH87

mortfree
Posts: 1050
Joined: Mon Sep 12, 2016 7:06 pm

Re: New car buyers...you should consider financing

Post by mortfree » Wed Nov 22, 2017 6:49 pm

Me: (via email). Hi Mary I would like to purchase 2017 Honda Accord LX (stock number xxxxx) for $20xxx plus tax and tags transferred. I will finance with Honda Financial at the 0.9% for 48 months. I will trade in my 2011 Accord that you sold to me. I will be in tomorrow at 4pm.

Mary: Ok. I can do that deal.

Next day
Test drive
Trade in value
Cleans up the new car
Out the door in 2 hours.



I did have a Toyota dealer play the interest rate game when we were shopping for my wife. CPO offer was 0.9% but they acted like that didn’t exist. We left. Bought from another Toyota dealer and it went basically same as my Honda story above- all done via email.

Just trying to offset the scary stories that others have posted here.

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