Welcome to City-Data.com Forum!
U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Automotive
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 03-14-2015, 08:22 PM
 
7,280 posts, read 10,885,525 times
Reputation: 11491

Advertisements

OP, apparently you think you have some leverage over the dealership, you do not.

The reason they have you fill out a credit app is to protect the dealership. Read your sales contract, it likely says that if your own financing doesn't go through, they can process your loan through the lender with whom they do business.

Here is how it works. Would you let someone drive of the lot with a new car that can't be resold as new if you return it? Once the title is made it becomes a used car, period. So you drive off and for some reason your load doesn't close. It could be any number of reasons and it happens.

So there you are with a brand new car, now used and with no financing in place. The dealers have seen this happen before so they protect the dealership, as any business would.

What else can you buy for that kind of money with a loan that isn't 100% done before you take the property away with you?

Its time to be realistic. If you don't want to use the dealer financing then show up with financing already done, as in check in hand. Go make your deal, get the quote and give it to your bank. They can process your loan and if approved, give you a check or draft made out the dealer. Then go pick up your car and the previously negotiated price.

But that isn't what you want is it? Nope, you want to finagle deals and financing and then want immediate gratification.

People with stellar credit can and do walk onto the lot and walk away within 30 minutes driving a new car. Their credit is so good they can demand the lowest rates and the best terms. Apparently you aren't in that situation so, you get in the cattle line with most of the others.

That is just how it works. Save your money and put it in the bank, then get a loan ahead of time and go get your car. You aren't going to run the dealer around, they deal with people in the same situation as you all day long, every week, month and year. You aren't someone special.
Reply With Quote Quick reply to this message

 
Old 03-14-2015, 08:27 PM
 
79,900 posts, read 43,866,989 times
Reputation: 17184
Quote:
Originally Posted by mangoarrow View Post
Just because MSRP is $25k doesn't mean that's what the dealer paid. They pay invoice, which is less than MSRP. For example:

2015 Honda Accord
MSRP: $25,854
Invoice: $23,618

So dealer paid $2,236 under MSRP. Whats more, this car is selling for $23,627, which means a profit of $9 per car. So how do they make money? Financing. Not only do they get kickbacks from banks but they also jack up the rates to keep the interest for themselves.

Cars bring in the customers but it's financing that makes them money. Do you now understand why they don't care if a cash buyer walks?
Not true or complete. They may have dealer cash. Money Honda has as incentives to move more cars. They also make hold back from that price so they may be making who knows. $800-1200 there. With todays ultra low interest rates they aren't making much on financing. Generally if they are offering you the manufacturer rate special, they might actually be losing money. There are times where the dealer has to kick in some. I can't imagine that's going on much right now but it does happen. Usually they want to finance you to control the whole thing. They want you leaving, sign sealed delivered.

A dealer can't jack a rate up to 5% when 2.5% is offered elsewhere. Yes, conceivably they can do it but competition is so fierce that it doesn't happen often.

A small dealer may let a customer walk as they only get so many cars. A big dealer isn't going to let anyone walk if they are making money, period. Yes, I sold cars. In small markets and big pressure markets. You did whatever you could profitably to get a buyer to leave that day with your car. If you didn't the next guy will.
Reply With Quote Quick reply to this message
 
Old 03-14-2015, 08:32 PM
 
79,900 posts, read 43,866,989 times
Reputation: 17184
Quote:
Originally Posted by Lowexpectations View Post
They also get paid by the manufacture for number if units sold
Some do, some don't. Toyota was big on that. It's been awhile and I can't say today what is what but when I sold cars and you wanted a Toyota you went on the last day of the month late into the day. If they needed one more car to get an extra $200 per car sold for the month you might get the car at actual dead cost. For a big dealer that could mean an extra 20k.
Reply With Quote Quick reply to this message
 
Old 03-14-2015, 08:45 PM
 
922 posts, read 1,139,709 times
Reputation: 1195
Quote:
Originally Posted by pknopp View Post
Not true or complete. They may have dealer cash. Money Honda has as incentives to move more cars. They also make hold back from that price so they may be making who knows. $800-1200 there. With todays ultra low interest rates they aren't making much on financing. Generally if they are offering you the manufacturer rate special, they might actually be losing money. There are times where the dealer has to kick in some. I can't imagine that's going on much right now but it does happen. Usually they want to finance you to control the whole thing. They want you leaving, sign sealed delivered.

A dealer can't jack a rate up to 5% when 2.5% is offered elsewhere. Yes, conceivably they can do it but competition is so fierce that it doesn't happen often.

A small dealer may let a customer walk as they only get so many cars. A big dealer isn't going to let anyone walk if they are making money, period. Yes, I sold cars. In small markets and big pressure markets. You did whatever you could profitably to get a buyer to leave that day with your car. If you didn't the next guy will.

Holdback on Honda is 2%, so $500 on a $25k car. But they must first meet certain sales quotas. Some manufacturers such as BMW, Audi and Jaguar do not have holdbacks.

Manufacturer to dealer incentives are often passed on to the customer so there's really no profit there.

Avg interest rate on new cars is around 4.5%. If you don't have top tier credit, you will end up close to 13%. Dealers jack up the rate by 2.5% on avg which can amount to several thousands, which they can keep.
Reply With Quote Quick reply to this message
 
Old 03-14-2015, 08:53 PM
 
79,900 posts, read 43,866,989 times
Reputation: 17184
Quote:
Originally Posted by mangoarrow View Post
Holdback on Honda is 2%, so $500 on a $25k car. But they must first meet certain sales quotas.
No they don't.

Quote:
Some manufacturers such as BMW, Audi and Jaguar do not have holdbacks.
You aren't going to buy one for $9 over either.

Quote:
Manufacturer to dealer incentives are often passed on to the customer so there's really no profit there.
Sometimes but the example had the person buying at $9 over with no consideration as to what other money the dealer was making.

Quote:
Avg interest rate on new cars is around 4.5%. If you don't have top tier credit, you will end up close to 13%. Dealers jack up the rate by 2.5% on avg which can amount to several thousands, which they can keep.
On average, not they do not. If you want to discuss what people with bad credit pay that is another topic but they aren't buying new cars. They also are not getting pre approved at low rates as was presented by the OP.
Reply With Quote Quick reply to this message
 
Old 03-14-2015, 09:10 PM
 
Location: Earth, a nice neighborhood in the Milky Way
3,583 posts, read 2,589,411 times
Reputation: 1560
Quote:
Originally Posted by North Beach Person View Post
They had the exact car he wanted. Apparently there isn't another dealer with what he wants.

I have to wonder what you guys do to have so much trouble at dealers. Really, I do. I've been buying new cars (and some used ones) for 40 years and have never had the issues some of you seem to have every time.

I've had my own financing and used the dealer financing (actually the last truck I bought last year the financing came through the dealer. Neither my credit union nor my bank could match it. In fact they even steered me from Ford Credit which was a couple points higher than Wells Fargo.) I've also paid full cash a few times. Never have I had the issues some of you have on a daily basis.

If the dealer makes a couple bucks handling the credit, so what? As I said, all he had to say was that he was ready to buy the car and were they ready to sell it. He would have been out the door with it in 30 minutes.
There's always another dealer. Most cars are not unique, you know? It's not rocket science. I'd rather finance through my credit union. Better rates, more consumer friendly, and after all, I'm a member owner...

I've managed to buy a car just fine from a dealer. Not all the dealers are the same. Those that play games lose my business.

It's not as if you have encountered every dealer out there. Maybe you can give a little credence to the experience of others?
Reply With Quote Quick reply to this message
 
Old 03-14-2015, 09:12 PM
 
Location: East TX
2,116 posts, read 3,021,619 times
Reputation: 3349
Quote:
Originally Posted by biafra4life View Post
I had heard folks say that about Capital One. Ironically the dealership that said no was to UP2DRIVE, which is actually a BMW finance company. Supposedly with a rock solid reputation.

I read too many stories about the games played by the Finance Depts at car dealerships..."pretending" to lower your monthly payments on the front end while extending the months on your loan on the back end...and my personal favorite, letting you sign for one rate, only to call you back after you've had the car for two weeks talking about "the financing for the great rate you had fell through, you are going to have to come back in and get this MUCH HIGHER rate"...all true stories by the way. So getting my own financing was seen as the best way to avoid all the scams/games played.
1. If you cannot read a contract and understand it, then you shouldn't sign it. Once a contract is signed a dealer cannot change the terms. Anyone who has let them is an id10t.

2. Financing over the internet is somehow safer than dealing with a person at a business with a written contract? Interesting concept.

You are complicating your life too much with fear of getting screwed which is more likely due to your fear. See the cycle here?
Reply With Quote Quick reply to this message
 
Old 03-14-2015, 09:38 PM
 
922 posts, read 1,139,709 times
Reputation: 1195
Quote:
Originally Posted by pknopp View Post
No they don't.


You aren't going to buy one for $9 over either.



Sometimes but the example had the person buying at $9 over with no consideration as to what other money the dealer was making.



On average, not they do not. If you want to discuss what people with bad credit pay that is another topic but they aren't buying new cars. They also are not getting pre approved at low rates as was presented by the OP.

You're right, I can't buy one for $9 over invoice.... I can get one for $1,858 UNDER invoice.

2015 BMW 320i
MSRP: $33,900
Invoice: $32,365
Selling price: $30,507

(Verified purchase price from Truecar)

$9 is the only sure profit, not the $800-1200 you claimed. Even with the 2% holdback, it's not even close to that. Manufacturers can refuse to pay holdbacks for dealer performance. Incentives are often seasonal and not year round.

People with bad credit do not buy new cars? LOL

Many do and head to the dealership for financing because their banks rejected them. That's when those unscrupulous finance or lienance managers prey on them by sticking them with 15-20% rates, of course including their usual 2.5% padding. Heck, even people with good credit end up with high rates because they were fooled.
Reply With Quote Quick reply to this message
 
Old 03-14-2015, 09:44 PM
 
79,900 posts, read 43,866,989 times
Reputation: 17184
Quote:
Originally Posted by mangoarrow View Post
You're right, I can't buy one for $9 over invoice.... I can get one for $1,858 UNDER invoice.

2015 BMW 320i
MSRP: $33,900
Invoice: $32,365
Selling price: $30,507

(Verified purchase price from Truecar)

$9 is the only sure profit, not the $800-1200 you claimed. Even with the 2% holdback, it's not even close to that. Manufacturers can refuse to pay holdbacks for dealer performance. Incentives are often seasonal and not year round.
Look, if you want to argue that the extreme examples are the norm I am wasting my time.
Reply With Quote Quick reply to this message
 
Old 03-14-2015, 09:48 PM
 
922 posts, read 1,139,709 times
Reputation: 1195
Quote:
Originally Posted by pknopp View Post
Look, if you want to argue that the extreme examples are the norm I am wasting my time.
Extreme? It was the first car I looked at. LOL
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Automotive

All times are GMT -6.

© 2005-2024, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top