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My #3 above is, perhaps more than any other issue, THE prima facie evidence that the below market rate is tied to the purchase price of the vehicle, something that you have steadfastly denied throughout this discussion.
Let's be clear, no one has ever denied that at some point upstream in the process, far before a consumer ever even thinks about buying a car, the manufacturer has factored in profit and anticipated incentives and accounted for those.
But there is no direct correlation between the price a consumer ultimately pays for the car, which is all that really matters from a practical perspective, and incentivized financing.
Let's be clear, no one has ever denied that at some point upstream in the process, far before a consumer ever even thinks about buying a car, the manufacturer has factored in profit and anticipated incentives and accounted for those.
But there is no direct correlation between the price a consumer ultimately pays for the car, which is all that really matters from a practical perspective, and incentivized financing.
Bingo. It's already been factored in long before we as consumers step into a dealership.
Let's be clear, no one has ever denied that at some point upstream in the process, far before a consumer ever even thinks about buying a car, the manufacturer has factored in profit and anticipated incentives and accounted for those.
But there is no direct correlation between the price a consumer ultimately pays for the car, which is all that really matters from a practical perspective, and incentivized financing.
I posted this a little while back:
Quote:
I have purchased several new cars where the manufacturer was offering teaser rates on financing. In every instance, upon paying cash, I received an additional discount off of the purchase price, approximately equal to the difference between the teaser interest rate and the current market rate for similar loans. YMMV.
My experiences aren't unique. There most certainly is a relationship between manufacturer sourced financing and vehicle price.
I haven't moved the goalposts at all. The two points that you bring up are two sides of the exact same coin. There are three issues, and they are all tied together.
1) Below market rates on manufacturer provided financing are tied to the price of the car.
2) Money is never free, and a below market rate results in a higher price for the car. This is evidenced by the fact that after negotiating best price, paying cash for the car will result in a further discount (rather than a higher price resulting from the use of the "cheap" financing). 3) The 0% rate on loans is ONLY available when purchasing a product that the lender has an interest in. It is IMPOSSIBLE to get the same 0% financing if one ISN'T buying a product in which the lender has an interest.
My #3 above is, perhaps more than any other issue, THE prima facie evidence that the below market rate is tied to the purchase price of the vehicle, something that you have steadfastly denied throughout this discussion.
I really don't see how this could be any more clear.
That's what I have been saying all along. Never stated anything contrary to that.
But you can't wrap your head around the fact that two people with two separate credit histories can negotiate the same exact price for the same exact car models from the same dealership. Except one could conceivably end up paying 0% while the other 2.9%. Somehow this is inconceivable in your world.
Bingo. It's already been factored in long before we as consumers step into a dealership.
Read my above post. If it's "already been factored in" it would be impossible to get additional discounts as a result of NOT using the teaser rate financing.
That's what I have been saying all along. Never stated anything contrary to that.
But you can't wrap your head around the fact that two people with two separate credit histories can negotiate the same exact price for the same exact car models from the same dealership. Except one could conceivably end up paying 0% while the other 2.9%. Somehow this is inconceivable in your world.
I have no trouble wrapping my head around that. If you believe otherwise based on what I have posted, you haven't been paying enough attention.
My point is quite simple. Let's add a third person to your example above. The third person pays cash for the vehicle, and as a result of not using the special financing, receives a discounted price lower than that paid by either of the two people in your example.
Your person #1 paid a market rate rate of interest, not 0% (based on the difference in final price paid by him, and my guy that paid cash). Your person #2 paid a greater than market rate. Remember, both #1 and #2 pay a higher price for the car. Only #3 pays the true market price of the car (which he is able to do because he didn't use the "0%" financing).
I have no trouble wrapping my head around that. If you believe otherwise based on what I have posted, you haven't been paying enough attention.
My point is quite simple. Let's add a third person to your example above. The third person pays cash for the vehicle, and as a result of not using the special financing, receives a discounted price lower than that paid by either of the two people in your example.
Your person #1 paid a market rate rate of interest, not 0% (based on the difference in final price paid by him, and my guy that paid cash). Your person #2 paid a greater than market rate. Remember, both #1 and #2 pay a higher price for the car. Only #3 pays the true market price of the car (which he is able to do because he didn't use the "0%" financing).
In my buying experiences paying cash was a negative. Take the financing with a discount and pay it off the next month. Car deals are so transient, there really is no consistent method to their final pricing. These days they make more money off the financing than the car sale it seems, with the Internet offering near perfect competition. If you read most special offers you either get the 'cash back' or you get the low financing, not both, are there exceptions made I'm sure but that isn't the norm.
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