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Informed buyers reduce the buying process to a yes or no...
Problem is many are unwilling to be informed.
Then there are the ones that buy based on payments.
Oh it's not just that. Dealers and salesmen intentionally look for the uninformed buyers. That's the ones they want. So they actively encourage it. So they can make extra money off of them.
Just bought a car 2 weeks ago. Knew exactly what I wanted. Online search located one at a dealership about 20 miles away. I emailed them, said this is the car I want, and this is what I'm willing to pay. If you can do it, I'll be there tomorrow to sign the papers. First reply started asking questions, yada, yada. I simply replied that they just need to say yes or no, and anything else is a waste of my time and would be the last interaction we had. They said yes, I went in and bought it the next day. I hate dealerships and car salespeople. Finance guys are pretty slimy too. The less time I can spend in a dealership, the better.
Luckily mine was kind of like that as well. I knew the car I wanted just not the trim level and luckily my neighbor is a Nissan dealer so we talked about all the details before I even walked through the door. I even had them saved as texts on my phone to make sure I had evidence if needed. So I walked in the door and found the trim level and color I wanted and walked out of there in less than an hour with the financing we agreed on.
I would put the whole car on the CC if they would let me. That's a lot of points.
So would I. I tried to do that with the last car I bought, but the dealer wouldn't let me. I was a bit upset with them about it. They gladly take credit cards in their service department, but refused to do it for a purchase. I really wanted all those points!
So would I. I tried to do that with the last car I bought, but the dealer wouldn't let me. I was a bit upset with them about it. They gladly take credit cards in their service department, but refused to do it for a purchase. I really wanted all those points!
I have purchased three new vehicles and tried to pay with CC. The best I could do was 5000 on two and 3000 on the other.
So would I. I tried to do that with the last car I bought, but the dealer wouldn't let me. I was a bit upset with them about it. They gladly take credit cards in their service department, but refused to do it for a purchase. I really wanted all those points!
They didn't want to pay the credit card processing fee on a car. If they finance you, the interest and fees go in their pocket instead. They prefer that.
I had a really strange experience at the car dealership yesterday. Still can't figure it out. We were negotiating and the sales person asked me for a credit card to take to his manager to "show we're serious" about buying the car. Said he wasn't going to charge anything on it (I would love to put the whole thing on there. POINTS!!). I refused.
What did he want with the credit card? I already said I was paying cash, so it shouldn't be for a credit check.
Decades ago I got the same line, but all I was asked for was $10. Boy have times changed.
They didn't want to pay the credit card processing fee on a car. If they finance you, the interest and fees go in their pocket instead. They prefer that.
It used to be more or less the merchant fees (for very large items like jewelry and cars, typically a $35 fee plus around 2%, or $5-600 on a $25k car), but the immediate financial issue isn't the reason any more - most dealers would be happy to take a $500 below-the-line hit to have someone pay in full and drive off (having been padded on the sale anyway).
These days, it has more to do with the merchant terms of credit cards, and the many protections given buyers when a card is used. Visa or Amex can poke all kinds of holes in a deal that is otherwise "over and done" when the customer drives off the lot.
Plus, anyone who has a good enough credit card to buy a car has good enough credit to do it more sensibly - and with better return for the dealer - so they are not going to lose the sale by refusing.
It used to be more or less the merchant fees (for very large items like jewelry and cars, typically a $35 fee plus around 2%, or $5-600 on a $25k car), but the immediate financial issue isn't the reason any more - most dealers would be happy to take a $500 below-the-line hit to have someone pay in full and drive off (having been padded on the sale anyway).
These days, it has more to do with the merchant terms of credit cards, and the many protections given buyers when a card is used. Visa or Amex can poke all kinds of holes in a deal that is otherwise "over and done" when the customer drives off the lot.
Plus, anyone who has a good enough credit card to buy a car has good enough credit to do it more sensibly - and with better return for the dealer - so they are not going to lose the sale by refusing.
I do have good enough credit to pay with a credit card, which is why I was approved by AMEX to do it. I called them and asked before I even started looking at cars. AMEX told me that I could charge as much as I wanted to. The dealer didn't want to have to pay the fees on such a large purchase - at least that's what they told me. They did let me put a portion of it on the card. I was ready to walk and they knew it. I didn't need a car, I wanted a car - so no hurry on my part at all.
To me, paying by CC was the most sensible way to do it. I would have gotten all those points and then paid of the entire balance prior to having any interest charged. I did end up financing it through the dealer, but I don't see how that was an advantage for them, because the interest rate was zero and I paid it off in full almost as soon as I got home, prior to even ever getting the first bill. Not sure how that was any advantage to the dealer, unless they enjoyed filling out paperwork - lol.
I pay everything I possibly can with my AMEX card and always pay them the full balance every month, so I am never paying any interest on it.
I always get good deals on cars when I buy them. For example, about 12 years ago, I bought a car knowing I got a great deal. I didn't realize exactly how great a deal it was until 2 years later. Someone rear-ended me and my car was totaled. I got a payout from the insurance company - the amount was almost exactly to the penny, what I had paid for the car 2 years prior.
The part of your post that I bolded - could you explain to me what you mean? What would be a more sensible way to do it? Serious question - I really want to know. Thanks!
To me, paying by CC was the most sensible way to do it. I would have gotten all those points and then paid of the entire balance prior to having any interest charged. I did end up financing it through the dealer, but I don't see how that was an advantage for them, because the interest rate was zero and I paid it off in full almost as soon as I got home, prior to even ever getting the first bill. Not sure how that was any advantage to the dealer, unless they enjoyed filling out paperwork - lol.
I DO understand how it was an advantage for the dealer, if you paid off their 0% interest loan immediately.
No commercial lender is going to loan you money at 0% interest. In a case like that, the interest charges are rolled into the purchase price. IOW, the dealer or manufacturer are paying the interest, out of their profit. If you pay off the loan early, they would love it, because now they avoid that interest subsidy, and get to keep that much more profit, because they factored that interest subsidy into your purchase price. Often in those situations, you either choose 0% interest, or a rebate (or a larger rebate), but not both.
A couple of years ago, I was furniture shopping. Many furniture stores were offering 0% interest financing, OR a percentage off the $ price tag, but not both. I wonder why?
I DO understand how it was an advantage for the dealer, if you paid off their 0% interest loan immediately.
No commercial lender is going to loan you money at 0% interest. In a case like that, the interest charges are rolled into the purchase price. IOW, the dealer or manufacturer are paying the interest, out of their profit. If you pay off the loan early, they would love it, because now they avoid that interest subsidy, and get to keep that much more profit, because they factored that interest subsidy into your purchase price. Often in those situations, you either choose 0% interest, or a rebate (or a larger rebate), but not both.
A couple of years ago, I was furniture shopping. Many furniture stores were offering 0% interest financing, OR a percentage off the $ price tag, but not both. I wonder why?
Well, in this case, no. I did not overpay for this car in any way. Of course they made a profit, but believe me, it wasn't much!
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