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First of all, dealers don't pay the manufacturer for the car at time of order. They only pay them at time of "gate release" or invoice date. (When the car is actually built.)
In addition, the terminology and phrasing they use when talking "holdback" is just not accurate. Holdback on the invoice has NOTHING to do with paying for a car as it sits on a lot. That is called floorplan financing which each dealer arranges themselves. There is no holdback account to bleed down or anything like that. Dealer buys the car for $XXX and their floorplan source pays the manufacturer that amount and the debt is settled. Then, the dealer pays the floorplan source interest each day that car sits on the lot. (Usually paid monthly.) If you sell a car quick that just means you get to pay less floorplan charges - the holdback amount doesn't ever change per se.
Whoever wrote that article you linked is clueless.
Many rebates are "hidden" to the customer - yes this is true. Do some research on things like stairstep incentives if you just want one way this is done. In general, the domestics used to advertise a lot more of their rebate money than the Euro/Asian companies but that isn't totally true anymore. The lux brands definitely have more of the hidden dealer cash, though, these days. Dealer's like having *some* hidden money to play with so they can use it if they want, and how they want. Sometimes they throw it on the hood of the car, sometimes they use it to give a customer a higher trade number, and sometimes they have a customer where they know they don't need to give it away. (Talking about you Mr Soccer Dad who's coming back with your wife for your 4th straight Toyota Sienna.)
How do you know your Truecar prices are truly better than what you could get otherwise? Did you get the Truecar price and then try to shop around yourself and beat it? I have....and I did. But I know the business so it's easy for me since I know the Truecar dealers are paying near $500 for that deal. A dealer friend of mine, who's not signed up with Truecar, advertises that he will beat any Truecar price by $250 guaranteed and he gets them every time. So in a nutshell he only pays half the fee Truecar would have charged him in this case. Now he might miss out on some deals by not being a Trucar dealer but that company and owner is a fraud. He's been sued many times (Scott Painter) and is not respected by his dealers. To his credit, he's built his brand name to the point where most of his dealers are signed up because they feel they'd miss out on deals. He's a piece of work, though....I've met him twice and he's a different bird.
Lastly, 2.5% is just not accurate no matter what your linked article states. The Center for Responsible Lending/Consumer Financial Protection Bureau (CFPB) is using that number based on a small subset of data that is not representative of the overall population. Read this:
When looking at the aggregate 20-group data for dealers across the country, which is 100% rock-sold accurate data, the average markup is right at 1%. If you don't know what 20-groups are then look it up - but this is something run through NADA and ATD and represent a large portion of the dealer body. Enough dealers are members to render the aggregate data a good sample size, unlike what the CFPB does.
I do this stuff every day for a living. I know what I am talking about.
So I should just ignore a credible publication which has been in business for many many years because some random anonymous guy on the internet who thinks checks "take a week to clear" tells me so? Uh, call me crazy but I'm going with the credible publication.
Prove that BMW has a $5000 rebate. Pretty strange that all the inside sources who do this for a living have no clue of this mystery rebate yet somehow only you do. Sounds far-fetched, doesn't it?
How do I know Truecar had the best price? Because I checked every other buying service (Costco, Carsdirect, etc.) and tried haggling without coming close to their price. I'm talking about $1000 difference. Who cares if the owner is supposedly a fraud? There are many successful owners who have been sued. Ever been to Las Vegas casinos? Did you know they were developed by mobsters? Yet millions of tourists visit every year. What do I care if I get the best prices?
I went through this same thing with Toyota. I bought a new Toyota a few years ago, and walked in with my financing (check) in hand. I used my local credit union that I knew beforehand they use, and they tried to pull this BS with me. Gave me the whole "Patriot Act" nonsense and whatnot. I had with my my DL, SS card, passport and Birth Cert. Also had my standard credit freeze I keep on my credit (can't be run unless I specifically authorize it).
Scumbags wouldn't budge, so I escalated it and was pointed to the Toyo dealer closest after the one I went to originally. They fell all over themselves to accommodate me, going as far to ship the color/options model I wanted to the dealership for me.
Just be smart, have your credit already on a freeze so when you present your SS card along with other ID, they can't just run it anyway (like they do regardless of your request), and escalate above the dealerships head if need be. And don't forget that Yelp review when it's all said and done.
Doesn't work that way in my area. Personal checks, even when drawn from my own bank, take a few business days.
Check 21 refers to the bank sending the cashed check back to me, which they don't do anymore. There are check guarantee scanners where you can get a same-day guarantee (within minutes) but you have to pay a % to the vendor for those. So yeah, I guess I'd take a personal check if they wanted to add a few percentage points to the price of their car. (Which I don't think most customers would do.)
You really should read up on it because you're clearly wrong.
What is Check 21 and what is its basic purpose?
Check 21 is a federal law that is designed to enable banks to handle more checks electronically, which should make check processing faster and more efficient. Today, banks often must physically move original paper checks from the bank where the checks are deposited to the bank that pays them. This transportation can be inefficient and costly. Check 21 became effective on October 28, 2004.
How will Check 21 make check processing more efficient?
Instead of physically moving paper checks from one bank to another, Check 21 will allow banks to process more checks electronically. Banks can capture a picture of the front and back of the check along with the associated payment information and transmit this information electronically. If a receiving bank or its customer requires a paper check, the bank can use the electronic picture and payment information to create a paper “substitute check.” This process enables banks to reduce the cost of physically handling and transporting original paper checks, which can be very expensive.
Every financing contract I have ever signed has contained the contingency clause. I mean what dealer would be stupid to not include it? If the financing falls through, which often happens, the customers gets to keep the car and pay nothing? Only a fool believes that.
So I should just ignore a credible publication which has been in business for many many years because some random anonymous guy on the internet who thinks checks "take a week to clear" tells me so? Uh, call me crazy but I'm going with the credible publication.
Prove that BMW has a $5000 rebate. Pretty strange that all the inside sources who do this for a living have no clue of this mystery rebate yet somehow only you do. Sounds far-fetched, doesn't it?
How do I know Truecar had the best price? Because I checked every other buying service (Costco, Carsdirect, etc.) and tried haggling without coming close to their price. I'm talking about $1000 difference. Who cares if the owner is supposedly a fraud? There are many successful owners who have been sued. Ever been to Las Vegas casinos? Did you know they were developed by mobsters? Yet millions of tourists visit every year. What do I care if I get the best prices?
You are just making stuff up now - where did I say it took a week to clear? I never said that.
Post #1 on this issue I said this: "If you walked in on a Thursday with a check for a car a dealer could certainly call your bank, with you in the room to provide authorization, and verify you have the funds in your account to pay it. Problem is, you can drive away Thursday night with the car and withdraw that money from your bank on Friday. By the time the check makes it through the system the following week it would bounce. Very common scam...."
Post #2 on it I said this: "Doesn't work that way in my area. Personal checks, even when drawn from my own bank, take a few business days."
"The following week is not the same as saying it WOULD take a week. Thursday to the FOLLOWING WEEK could be Monday, Tuesday, etc, get it?
What credible publication are you talking about - intellichoice? The same publication that states a dealer pays a manufacturer when it orders a car which is 100% totally false? There were several errors in that article you linked. Don't believe me...call some dealers and ask them exactly when they pay for a car they ordered.
I never said the BMW has a $5,000 rebate, either. I just said it *MAY* have some. My exact quote was "many rebates are "hidden" to the customer...blah, blah." My point was there ARE a lot of hidden rebates that people like you won't ever find. If you could find them all then places like Truecar wouldn't exist then right? Why would anyone need them if the pricing/rebates were so easy to get?
Lastly, since you don't seem to get it, all these "buying services" people use, even Costco, CHARGE DEALERS FOR THEIR BIDS. So for the GOOD negotiators they can usually get the car cheaper by NOT using those sites. Get it? The dealer cost of the car is the same no matter if they use a buying service or not, so their net cost of the car is actually higher for those Truecar-like deals. They have an additional markup in there to cover the cost of the service. By negotiating on your own the dealer does not have this additional cost to deal with. For people who aren't good negotiators or just don't want to play the game they can still get a decent price with a car service, but not the BEST price.
You really should read up on it because you're clearly wrong.
What is Check 21 and what is its basic purpose?
Check 21 is a federal law that is designed to enable banks to handle more checks electronically, which should make check processing faster and more efficient. Today, banks often must physically move original paper checks from the bank where the checks are deposited to the bank that pays them. This transportation can be inefficient and costly. Check 21 became effective on October 28, 2004.
How will Check 21 make check processing more efficient?
Instead of physically moving paper checks from one bank to another, Check 21 will allow banks to process more checks electronically. Banks can capture a picture of the front and back of the check along with the associated payment information and transmit this information electronically. If a receiving bank or its customer requires a paper check, the bank can use the electronic picture and payment information to create a paper “substitute check.” This process enables banks to reduce the cost of physically handling and transporting original paper checks, which can be very expensive.
Nowhere here does it say a personal check given to a business today will get immediately cashed and funded (with no additional fees) on the same day. I am familiar with the rules as we have worked with our bank to get our process done as fast as possible since our customer's want their products as soon as they come to purchase them.
Tell me how Check 21 handles that? Keep in mind Remote Deposits (which I do with my bank on checks I get) have limits on how big of a check you can run through your phone, etc. These limits are typically below the cost of a car. In addition, commercial accounts (at least in my area) do not have remote deposit features like this.
As a business owner I have 2 choices when I get a personal check from someone:
1) Physically take it to the bank and let it go through the normal process
2) E-scan it and pay the additional fees to the third-party guarantee company. (The bank itself doesn't do it - they referred us to a third-party partner to buy the check scanner machine.)
The one benefit of the third-party arrangement is we don't have limits. We get checks for large amounts so this was necessary for us. We just don't use it much anymore because most people now pay us via wire transfers, anyway.
You are just making stuff up now - where did I say it took a week to clear? I never said that.
Post #1 on this issue I said this: "If you walked in on a Thursday with a check for a car a dealer could certainly call your bank, with you in the room to provide authorization, and verify you have the funds in your account to pay it. Problem is, you can drive away Thursday night with the car and withdraw that money from your bank on Friday. By the time the check makes it through the system the following week it would bounce. Very common scam...."
Post #2 on it I said this: "Doesn't work that way in my area. Personal checks, even when drawn from my own bank, take a few business days."
"The following week is not the same as saying it WOULD take a week. Thursday to the FOLLOWING WEEK could be Monday, Tuesday, etc, get it?
What credible publication are you talking about - intellichoice? The same publication that states a dealer pays a manufacturer when it orders a car which is 100% totally false? There were several errors in that article you linked. Don't believe me...call some dealers and ask them exactly when they pay for a car they ordered.
I never said the BMW has a $5,000 rebate, either. I just said it *MAY* have some. My exact quote was "many rebates are "hidden" to the customer...blah, blah." My point was there ARE a lot of hidden rebates that people like you won't ever find. If you could find them all then places like Truecar wouldn't exist then right? Why would anyone need them if the pricing/rebates were so easy to get?
Lastly, since you don't seem to get it, all these "buying services" people use, even Costco, CHARGE DEALERS FOR THEIR BIDS. So for the GOOD negotiators they can usually get the car cheaper by NOT using those sites. Get it? The dealer cost of the car is the same no matter if they use a buying service or not, so their net cost of the car is actually higher for those Truecar-like deals. They have an additional markup in there to cover the cost of the service. By negotiating on your own the dealer does not have this additional cost to deal with. For people who aren't good negotiators or just don't want to play the game they can still get a decent price with a car service, but not the BEST price.
Doesn't matter whether you meant a week or 4-5 days..... it's still wrong. The funds would be available as early as the same day or Friday thanks to the Check 21 Act.
Check 21 Act applies to every bank in the US. Doesn't matter what area you live in.
Yes, I'll take the words of Intellichoice over some random anonymous guy on the internet who thinks checks take a week to clear and BMW has secret rebates no one knows about, except him, of course. None of the credible websites that publish manufacturer to dealer incentives (which aren't publicized) don't know about these secret rebates either. You must be special or just making stuff up.
Yes, I am fully aware that dealers pay a small fee to Truecar for customer referrals ($299 not $500 you claim). Why shouldn't they? They're bringing them business after all. But, how does it affect me if I get the lowest price? Like I said, I've compared it to other buying services and it was the cheapest by $1000.
read the back of the standard contract form used by new car dealers… its under recission rights..
its on the back..
bet you didn't read the back..
I bet I did.
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