Why is this?
 

So on the weekend I was at Richmond Honda looking at Civic Si's.
I finally get a sales rep to help me and I ask about how much the 08 Sedans are going for

He tells me they're $24,xxx (after some $3500 odd dollar rebate?) and I'm like SERIOUS?!
He's like YES!

Anyway, we sit down and he tells me that the interest rate on the 08 is 7.9%, while the 09's only have 0.9%

Why is it that the older models have the higher rate? The 08 was brand new, wouldnt they be trying to get it off the lot faster?

Someone explain to me please, this really confuses me

Honda Canada incentives, they want you to buy the 09's.

But shouldnt it be the other way around? The 08's are sitting there losing value but they charge more for them?
Anyway since its an older model that leaves more room for negotiation, right?

Does that rebate apply only if you pay by cash?

Not that I know of, however I swear he mentioned something about cash rebate. He had a pretty heavy chinese accent so I cant be sure :(

Do you have enough cash to buy flat out? if so, you can negotiate a bit more than $3500.

last year, the left over TL's were being offered up to $8000 discount if you bought it flat out, no financing, no leasing (up to $10,000 on an MDX as well). i'm sure you can get more than 3500bux for that leftover civic...check other dealers as well to see if they have any left elsewhere.

I dont have nearly enough to buy it flat out, I'm gonna check other dealers and negotiate like crazy to see what I can get
I'm not too concerned about trying to get more than $3500 off, but I was wondering why the interest rate is SO damn high on an 08

Funny thing is the 09s are cheaper than the 08s.

Or atleast that what I got from a family friend who works as a the regional director of budget.

Yeah, it just doesnt make sense right? Am I the only one that goes "wtf"?

I think it sort of makes sense if u look at it retrospectively. The price of a 08 may have dropped to so low that the dealer is indifferent whether it sells or not. The 09 on the other hand command a higher price thus higher margin.

But yea, intuitively, it doesnt makes sense

But its probably easier to negotiate the price/interest of the 08 being that its an older model?

I think it has to do with the economy and Honda trying to lower prices to keep a competitive income and to well, attract buyers in a dim market.

If you look at it like that, it makes much more sense. The 09s being cheaper because of the global recession where the 08s were base priced higher during when there wasn't a global recession.

Go with 09s. Cheaper and newer!

Honda is just trying to push their new line.

That is weird at first glance though, and those new happy face grills that every car has are growing on me.

It's the same at Ford and many other manufacturers.

2008's and some 2009 models have $1000-$9000 off msrp, but bank rate interest (7-9%)

New 2009 and 2010 models have very little cash back, but very LOW interest.

If you are doing a monthly payment, it will wind up being almost the same on either choice.

My understanding of WHY manufacturers do this, is because the banks do not want outstanding loans on older model year vehicles. The banks want to keep the cars that have leins on them, as new/current as possible. They do not want to start a finance contract on a car that is already 1 year old.

Additionally, the manufacturer only has a set amount of money to throw at a model line as incentives. Bank rate on a $30,000 car loan is about $7500. If you get 0% interest instead, that's the same as getting $7500 off the price. What a manufacturer might do is offer $8000 off MSRP instead of a subvented rate. When you lower the price of a vehicle, you have less and less finance buyers and more andmore cash buyers, AND it's easier to approve the ones that do choose to finance because the amount borrowed is less. (although the interest is more.)

It might sound counter-intutitive but it's long term thinking that will help keep the manufacturers profitable.

Depends on who is financing the car loan. For GM.. if it's an 09, you get GMAC financing at 0.9% or whatever the rate is now. If you buy an older model that's still sitting on the lot (even though it's brand new!) it no longer qualifies for GMAC... so you have to get a local bank loan. Most dealers do this stuff for you... punch your info in the computer, get your approval, etc.

We bought a brand new 2007 Equinox still sitting on the lot, in March 2009. Sticker was $32k, we paid $18k. But we went and got our own financing at the bank... better rate that way :)

It's always been that way, across pretty much all brands.

there are better cars for the money, FYI - i own one and will happily say that (POS made in Canada garbage)

If you dont mind me asking, why is it a POS?
Also which car(s) can be had for <$30k?

Recession.

try your line of credit to buy the car.

First of all the new Civic is not a POS. I own an 07 Civic Si and love it to death,
I have two tiny complaints about the car, first is that the interior dash and door panels are made from cheap quality plastic and scratches very easily, second is that civics lacks on torque, Ohh and the 3rd gear problem, But it`s not an issue for 08-09 models.
Overall the new Si is a great performance bargain. There`s simply no other car out there for under 30k BRANDNEW which offers a combination of furious performance and superior practicality, Not to mention it`s 8200rpm redline;). Anyways what drew your attention to the Si ?

FYI used 06-08 Si`s are going for 18k-23k.

rattles that just shouldn't be on a honda - complained, 'couldn't recreate it' - will complain again soon (3rd time)

interior is ok - not as nice as european - WHY NOT?! are we that simple (i'm european, maybe thats why i complain, i'm not so simple)

engine - mostly is great, but its an 'older' engine now - not brand new technology - i wouldn't want a car that basically has a 6 yr old engine (if not older? k20 in all forms has been around for a while, and although its solid and a great performer, where's the next gen?) - i've owned my car since htey first came out, so i figured i was ok with it, but i wouldn't buy it again

transmission - SHIT, all honda trans seem to be shit though (98 accord, tranny replaced, 04 TL has problems, 07 TLS has had parts of the tranny replaced) - 3rd gear is fucked, 2nd gear grind, i've had to have the shift linkage replaced as i broke it (do i drive that hard? i don't think so) - weak design (cables? give me a fucking break)

engine, bogs at times on hard acceleration/gear change - dealership says its normal - no joke - will complain again, and again

small honda engines jerk when cold - ABSOLUTE BS! why they can't engineer this problem away is beyond me - should be smoother

and finally, clock on the cd player runs fast, i've had 1 replacement... and it does it too!!! WTF!

now, as i say, in 06 when they first came out - cool car, was hte new in thing, cool engine, all that... now, with the new upgrades to the looks (i think they're not upgrades but steps back), i wouldn't consider getting another one

what would i get instead - unfortunately i can't really help you on that one, as i'd want to spend well over $30k, but golf GTI has something about it... v6 accord with rebates/if you can drive a hard bargain could be had for nearer 30 than you think... but personally, i'd be going for a 1 series - having said that, you're talking twice hte money

overall, my complaints are only big to me as i expected a LOT more from a honda - if it were japanese made, i think it'd been a lot better, but i could tell RIGHT AWAY this was a north american built car, sloppier, not as much care and attention... not nearly as good - fuck american, buy japanese!

Hm, alot of those problems seem like they could just be isolated incidents. I know with my SE-R, I havent had a single problem with it other than rattles, which you'll probably get even with the GTI. I think in today's market anything around $30k is considered "cheap." However I've read of other problems with Sentras that nobody else has

But thanks for your input

Dealers can also sell you previous MY cars as "used", hence they give you a higher financing rate. Burrard Acura tried to pull this on me when I was looking to trade in my Si for a CSX Type-S's a few years back.

As for the points made above:
Rattling - agreed... definitely some rattles can be deleted with better insulation
Interior - It's not supposed to look European. It's a Japanese company! I like it. Very interesting and functional design.
Engine - Great
Transmission - Great (I doubt you'd find a smoother and more fun M/T at this price range)
Engine bog - Fixed with reflash, and if you're too lazy to warm it up a bit, then that's your fault.

GTI vs Si has been raging on forever. Each have their pro's and con's... the biggest being the VW's price which is $2000+ more expensive than an equally-equipped Civic Si.

Not to mention the GTI is also turbocharged!
I did some research on the GTIs as well as the civic, and the GTI seems to have LOTS of electrical/little problems

Marcolishuz, can you go into a little more detail about dealers trying to sell cars as "used"?
Perhaps expand on your story? :D