Introducing the 97-month car loan

[q0192837465]

I'll have to side with 4444 here. That fact that most ppl don't consider the time value of money is quite alarming. Its one of the most important thing a person should learn because it directly affects how much money u'll end up with when u retire. It also help u realize the true cost of the things that u r buying if u don't pay for it at once. It's one of the most useful math skill as an adult.
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[dared3vil0]

Originally Posted by 4444

daredouche... clearly certain pussies (not you) are getting their panties in a twist

I'm sorry, you said I was being immature...?

[dared3vil0]

Originally Posted by q0192837465

I'll have to side with 4444 here. That fact that most ppl don't consider the time value of money is quite alarming. Its one of the most important thing a person should learn because it directly affects how much money u'll end up with when u retire. It also help u realize the true cost of the things that u r buying if u don't pay for it at once. It's one of the most useful math skill as an adult.
Posted via RS Mobile

There's no question he is right on all points, what i was saying is he's being very impudent about it...

[4444]

Originally Posted by dared3vil0

There's no question he is right on all points, what i was saying is he's being very impudent about it...

Knows I'm right, complains bc I'm short with people who are wrong (not arguing opinion, but correcting fact)

This is when u know there's something wrong in the world

[dared3vil0]

Originally Posted by 4444

Knows I'm right, complains bc I'm short with people who are wrong (not arguing opinion, but correcting fact)

This is when u know there's something wrong in the world

You missed my point completely. (4th time now...?) yes, you're right. good for you. Here's your 'atta boy. I'm sure in your career as a "successful businessman" you have realized if you're condescending and arrogant, you won't get as far as someone with the same skill set and ability level who is approachable and amiable.

[teekaywok]

[tofu1413]

I havent checked rs for a day... and this happens.



However, this proves that most people are unaware of the whole time value of money when it comes to financing cars.

Hell, Ive got people that are willing to pay that extra interest, up to 11-12% just to get themselves into a car.

As for the 0% thing, I do offer to customers it so they can use the money elsewhere or it gives them the luxury of having a bit more cash flow. I usually recommend it if there isnt a cash rebate going on.

But from the onset, we were here to talk about price negotiating on cash vs finance, so enough of this time value of money stuff. I have enough headaches as it is.

[UFO]

Well so much for my attempt to learn something new today

[4444]

Originally Posted by dared3vil0

You missed my point completely. (4th time now...?) yes, you're right. good for you. Here's your 'atta boy. I'm sure in your career as a "successful businessman" you have realized if you're condescending and arrogant, you won't get as far as someone with the same skill set and ability level who is approachable and amiable.

No, haven't missed it, just haven't cared, as said numerous times, this is Internet, why should I be all puppies and sunshine, I wasn't personally offensive (which is over the line), but being short and direct, which you have perceived as condescending and arrogant, is just being to the point

I could be a lot more condescending, trust me

And yet again, I will point out that in my real life, I act and speak appropriately, and have done extremely well for myself, so don't you worry about me not getting as far as anyone else, you should be worried about getting as far as your peers

[4444]

Originally Posted by tofu1413

I havent checked rs for a day... and this happens.



However, this proves that most people are unaware of the whole time value of money when it comes to financing cars.

Hell, Ive got people that are willing to pay that extra interest, up to 11-12% just to get themselves into a car.

As for the 0% thing, I do offer to customers it so they can use the money elsewhere or it gives them the luxury of having a bit more cash flow. I usually recommend it if there isnt a cash rebate going on.

But from the onset, we were here to talk about price negotiating on cash vs finance, so enough of this time value of money stuff. I have enough headaches as it is.

Hopefully this puts to bed the negotiating point

At a certain inflation rate, $20k today cash is worth a payment stream of $22k over the life of a lease. As such, you are likely to be able to get up to a $2k discount using cash, less any financing kickbacks/fees earned if you pay cash.

This is a very simplistic case for a car with a $22k sticker.

Lets not forget, that there is also risk involved in offering financing, as some people do default and get their cars (which by then are usually worth less than the outstanding debt) repossessed. Not sure if the dealership pays for default insurance, but that Is also a headache/cost for the dealer which you won't be able to negotiate away.

This is, unless you're in 2006 in the US where anyone could get a loan for anything with no income! But those times have changed. Thankfully

[blee123]

both 4444 and tofu's post were very informative, definitely learned alot from the posts

*i know of a dude financing a matte black c63 coupe for 72 months with a 5.9 % interest rate

[dared3vil0]

Originally Posted by 4444

Hopefully this puts to bed the negotiating point

At a certain inflation rate, $20k today cash is worth a payment stream of $22k over the life of a lease. As such, you are likely to be able to get up to a $2k discount using cash, less any financing kickbacks/fees earned if you pay cash.

This is a very simplistic case for a car with a $22k sticker.

Lets not forget, that there is also risk involved in offering financing, as some people do default and get their cars (which by then are usually worth less than the outstanding debt) repossessed. Not sure if the dealership pays for default insurance, but that Is also a headache/cost for the dealer which you won't be able to negotiate away.

This is, unless you're in 2006 in the US where anyone could get a loan for anything with no income! But those times have changed. Thankfully

Without ripping me apart, Why is 20k cash today worth 22k over the life of the loan? Doesn't inflation mean it's worth alot less than 22k?

[blee123]

Originally Posted by dared3vil0

Without ripping me apart, Why is 20k cash today worth 22k over the life of the loan? Doesn't inflation mean it's worth alot less than 22k?

cause if you invest 20k today, and after 3 years (length of a loan for example), the 20k initially is now worth more than 20k due to a possible gain from the investment.

*in his example, the 20k is now worth 22k

[tofu1413]

lol if people think new cars are investments, they clearly are idiots.

unless if its a super limited production collector car, depreciation is a bitch as soon as papers are signed.

the 20k car that rolls off the lot is automatically worth 16k...

blee// 12% interest is of the norm.... 5.9% is standard rate.

[blee123]

Originally Posted by tofu1413

lol if people think new cars are investments, they clearly are idiots.

unless if its a super limited production collector car, depreciation is a bitch as soon as papers are signed.

the 20k car that rolls off the lot is automatically worth 16k...

blee// 12% interest is of the norm.... 5.9% is standard rate.

i was refering to 20k in investment (business) not investing on a car

*12% norm ? what you mean? 72 month finance?

[dared3vil0]

Originally Posted by blee123

i was refering to 20k in investment (business) not investing on a car

*12% norm ? what you mean? 72 month finance?

I don't think so. I've seen 72 month loans at 0%, but usually it's ~4.49-4.99

[tofu1413]

have had people came in with very very meh credit, previously bankrupt, had foreclosures etc..

they were paying 12% interest on a used car!

then there are some people that are borrowing a small amount of money on a short finance term.. they were at about 8%

all of these are used car interest rates.. new cars are usually lower because of manufacturer backing

[dared3vil0]

Originally Posted by tofu1413

have had people came in with very very meh credit, previously bankrupt, had foreclosures etc..

they were paying 12% interest on a used car!

then there are some people that are borrowing a small amount of money on a short finance term.. they were at about 8%

all of these are used car interest rates.. new cars are usually lower because of manufacturer backing

What's good credit get you on average then? When i financed my current Si, (through my parents obviously) it was 48 months at 2.99%... The truck i just bought is 60 months at 3.29%.

[tofu1413]

we usually start about 4.99%+ at our dealer. We dont have enough mark up on our used cars to make it as low as 2.99%

usually the good credit customers hovers around 5.9 or so for used cars..

[dared3vil0]

Originally Posted by tofu1413

we usually start about 4.99%+ at our dealer. We dont have enough mark up on our used cars to make it as low as 2.99%

usually the good credit customers hovers around 5.9 or so for used cars..

Just seems SO high... Perhaps they got the car in for next to nothing on the trade? Cause i got a really good price on it...

[tofu1413]

the whole rate thing is different from dealer to dealer!

[blee123]

Originally Posted by tofu1413

we usually start about 4.99%+ at our dealer. We dont have enough mark up on our used cars to make it as low as 2.99%

usually the good credit customers hovers around 5.9 or so for used cars..

so do you as a sales person determine the customer's finance rates (%) or does the business office people do that?

or is it determined by how long the term the customer wants to finance by? For example by: 3 years @ 4.99% , 4years@ 5.99% , 5years@ 6.99% etc?

The rates at your dealership is quite high since you said a customer had 8% and another 12%....

[VRYALT3R3D]

When you buy a car at a dealership, be a cash buyer and not a finance buyer. Cash buyers seldom pay sticker and have more leverage when buying. How do you be a cash buyer? Well, get a loan from the bank and NOT the dealership. When you finance at the dealership, you pay more interest and the dealer will find more ways to add to the interest. When shopping a bank, get the lowest interest rate possible and use that bank.

[dared3vil0]

Originally Posted by VRYALT3R3D

When you buy a car at a dealership, be a cash buyer and not a finance buyer. Cash buyers seldom pay sticker and have more leverage when buying. How do you be a cash buyer? Well, get a loan from the bank and NOT the dealership. When you finance at the dealership, you pay more interest and the dealer will find more ways to add to the interest. When shopping a bank, get the lowest interest rate possible and use that bank.

I have to disagree with you, the 48 month @ 2.99 was through a dealership, The best the bank wanted to give was 4.49.

[tofu1413]

Originally Posted by blee123

so do you as a sales person determine the customer's finance rates (%) or does the business office people do that?

or is it determined by how long the term the customer wants to finance by? For example by: 3 years @ 4.99% , 4years@ 5.99% , 5years@ 6.99% etc?

The rates at your dealership is quite high since you said a customer had 8% and another 12%....

yep, a bit higher because our financing isnt in house!

Originally Posted by dared3vil0

I have to disagree with you, the 48 month @ 2.99 was through a dealership, The best the bank wanted to give was 4.49.

2.99% was probably in house financing?