[VRYALT3R3D]

LOL

Introducing the 97-month car loan - Yahoo! Autos (http://autos.yahoo.com/news/introducing-the-97-month-car-loan-202203365.html)

[hk20000]

Well if you need the car now and you don't see yourself losing your income that's not really bad. Considering a Camry will out last those loan payments if you don't crash it.

[VRYALT3R3D]

Well if you need the car now and you don't see yourself losing your income that's not really bad. Considering a Camry will out last those loan payments if you don't crash it.

There is a difference between affording a car and affording a car.

Paying that much interest on a Camry is a very stupid financial decision.

Never negotiate the monthly payment. Always negotiate the cash purchase price first. Remember you are buying a car, not a monthly payment.

Me? I would have bought a 10 year old civic and kept some money aside for repairs.

[dared3vil0]

The biggest problem with these loans is people owe more than the car is worth. The most i would do for a loan is 60 months on a new car, and 48 on a used.

[hk20000]

hard to say. Considering the current prime rate is so freakishly low.

could still be better than a 5 year loan on a higher rate of yester years. which makes it alright.

[death_blossom]

97 months? :fulloffuck:

[bcrdukes]

97 months on an Audi.

w00p w00p!

[VRYALT3R3D]

97 months on a Mercedes C300.

w00p w00p!

Fixed

[dared3vil0]

97 months on a 320i?

Fixed v3

[VRYALT3R3D]

Fixed v3

http://farm9.staticflickr.com/8328/8346901631_195645e868_b.jpg

:badpokerface::badpokerface::badpokerface:

[tofu1413]

36-48 months is the sweet spot for leasing...

0% finance = free borrowing.. (at least on paper, manufacturer pays for interest basically)

84 term is awfully long... some domestics locally offer 96!

stupid thing is by the 7th year, the car is worth nothing, yet you still owe a fair amount on it... :seriously:

[4444]

36-48 months is the sweet spot for leasing...

0% finance = free borrowing.. (at least on paper, manufacturer pays for interest basically)

84 term is awfully long... some domestics locally offer 96!

stupid thing is by the 7th year, the car is worth nothing, yet you still owe a fair amount on it... :seriously:

It's not really free, you will effectively pay more for the car, you can always negotiate a lower purchase price with cash, so there is that aspect...

This is, in a simplified way, how the housing bubbles in US and now Canada started, cheap money, amortized over long periods (40yr amort on real estate)... People buying shit they can't afford - this wont end well

[Gridlock]

It's not really free, you will effectively pay more for the car, you can always negotiate a lower purchase price with cash, so there is that aspect...

This is, in a simplified way, how the housing bubbles in US and now Canada started, cheap money, amortized over long periods (40yr amort on real estate)... People buying shit they can't afford - this wont end well

...and the excess of the 80's

It NEVER ends well when money is cheap and people are desperate to pump up sales.

I had an ex that lived at home and went out and bought a car she didn't need and couldn't afford. Then, 6 months later she got fired. Them her mom moved in with someone.

So she was stuck working at a dead end job(x2) paying for it, AND now market rent. She moved into a basement suite that was literally the size of a bedroom and was completely underground.

So stupid me comes along, and starts dating her and we move in together, and one day she's like, "so I re-negotiated the car loan"

Oh. Yeah. Can't wait to hear the detes on this one.

She had a bit over a year and a half left at $550/month. Rolled it into a new loan for $420/month for another 4 years I think. Can't remember the specifics.

By the time she was done paying for it, at 400/month in year 7, she owned a piece of shit that got stolen or broken into all the time and was worth pennies on the dollar.

I remember her mom said to me once, "well, it was a good investment at the time she bought it". On what fucking planet is a single girl buying a 4x4 domestic truck...NEW...off the lot...for STICKER PRICE a good 'investment'?

I've heard of many people doing some stupid shit with cars(mostly here on RS :) but have yet to see this one matched.

[BBMme]

But what will be the interest rate?
Posted via RS Mobile

[tofu1413]

It's not really free, you will effectively pay more for the car, you can always negotiate a lower purchase price with cash, so there is that aspect...

This is, in a simplified way, how the housing bubbles in US and now Canada started, cheap money, amortized over long periods (40yr amort on real estate)... People buying shit they can't afford - this wont end well


not true. end of the day, there is more room to negotiate on financing.

reason: sure up front they make nothing on gross, but on the finance side, the finance manager / dealer makes money for getting the customer financed even if its a 0% term.

[4444]

not true. end of the day, there is more room to negotiate on financing.

reason: sure up front they make nothing on gross, but on the finance side, the finance manager / dealer makes money for getting the customer financed even if its a 0% term.

Ok, you go negotiate on a finance deal and a cash deal, see which principal price is lower

What you have said make no financial sense (I'm a finance guy, who has bought every car with cash, and negotiated heavily on all)... Maybe I'm just a champion negotiator, but I highly doubt that's true

[4444]

...and the excess of the 80's

It NEVER ends well when money is cheap and people are desperate to pump up sales.

I had an ex that lived at home and went out and bought a car she didn't need and couldn't afford. Then, 6 months later she got fired. Them her mom moved in with someone.

So she was stuck working at a dead end job(x2) paying for it, AND now market rent. She moved into a basement suite that was literally the size of a bedroom and was completely underground.

So stupid me comes along, and starts dating her and we move in together, and one day she's like, "so I re-negotiated the car loan"

Oh. Yeah. Can't wait to hear the detes on this one.

She had a bit over a year and a half left at $550/month. Rolled it into a new loan for $420/month for another 4 years I think. Can't remember the specifics.

By the time she was done paying for it, at 400/month in year 7, she owned a piece of shit that got stolen or broken into all the time and was worth pennies on the dollar.

I remember her mom said to me once, "well, it was a good investment at the time she bought it". On what fucking planet is a single girl buying a 4x4 domestic truck...NEW...off the lot...for STICKER PRICE a good 'investment'?

I've heard of many people doing some stupid shit with cars(mostly here on RS :) but have yet to see this one matched.
Wow, what an idiot! No wonder she's an ex... People like that shouldn't be extended credit, for their own good (and watch the economy die)

[tofu1413]

Ok, you go negotiate on a finance deal and a cash deal, see which principal price is lower

What you have said make no financial sense (I'm a finance guy, who has bought every car with cash, and negotiated heavily on all)... Maybe I'm just a champion negotiator, but I highly doubt that's true


per say 0% finance. 0 rebate on cash. principal price is the same. however, dealer technically makes more money if they were to get the customer to finance the car. In theory, finance deals makes more money, so those deals have that little bit more room to make a deal.

invoice price for cash or finance is the same with 0 incentives and 0% interest. Dealer makes money for setting up the loan. The bank pays dealer to set up the deal and the manufacturer pays for the interest.

I am a car salesman and I also buy cars with cash, although I am financing my most current car. :P


most people think cash is king, however, only true for those cars doing a factory cash rebate.

[4444]

per say 0% finance. 0 rebate on cash. principal price is the same. however, dealer technically makes more money if they were to get the customer to finance the car. In theory, finance deals makes more money, so those deals have that little bit more room to make a deal.

invoice price for cash or finance is the same with 0 incentives and 0% interest. Dealer makes money for setting up the loan. The bank pays dealer to set up the deal and the manufacturer pays for the interest.

I am a car salesman and I also buy cars with cash, although I am financing my most current car. :P


most people think cash is king, however, only true for those cars doing a factory cash rebate.
are you considering at all the time value of money? doesn't appear as though you are in the above case

we may just have to agree to disagree

[dared3vil0]

although I am financing my most current car. :P .

97 Months? :troll:

[StylinRed]

here tofu Time value of money - Wikipedia, the free encyclopedia

[Presto]

$480 a month for the 2013 Camry
75 months of payments
$36,000 total paid for a $23,000 car.

WTF is the interest rate on the financing? I don't think it's that much, but more than 6 years of payments sure adds up!

[CorneringArtist]

$480 a month for the 2013 Camry
75 months of payments
$36,000 total paid for a $23,000 car.

WTF is the interest rate on the financing? I don't think it's that much, but more than 6 years of payments sure adds up!

Toyota is pretty shitty with their financing, coming from someone who works in a Toyota dealership. It's something like 6.5% outside of promos, and that's hardly considering the special offers put on throughout the year. If I was to finance a Toyota rather than the 0% I get on my current car, I only get a tiny bit below MSRP as a discount on the car, and still have a retarded interest rate on it.

[tofu1413]

are you considering at all the time value of money? doesn't appear as though you are in the above case

we may just have to agree to disagree

nope. didnt take that into account. im not the finance guy. however, cars are getting cheaper.. comparing model to models over the years.

97 Months? :troll:

maybe for a GT3RS :troll:


here tofu Time value of money - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Time_value_of_money)

:okay:

[4444]

nope. didnt take that into account. im not the finance guy. however, cars are getting cheaper.. comparing model to models over the years.



maybe for a GT3RS :troll:




:okay:

then, with all due respect, you shouldn't ever get into a 'cost' discussion with anyone, as time value of money is ALL that matters in a cash vs. finance type decision

[SpeedStars]

If they introduce a 120-month plan...I might actually finally be able to afford a R35 GT-R :alonehappy:

[MindBomber]

...and the excess of the 80's

It NEVER ends well when money is cheap and people are desperate to pump up sales.

I had an ex that lived at home and went out and bought a car she didn't need and couldn't afford. Then, 6 months later she got fired. Them her mom moved in with someone.

So she was stuck working at a dead end job(x2) paying for it, AND now market rent. She moved into a basement suite that was literally the size of a bedroom and was completely underground.

So stupid me comes along, and starts dating her and we move in together, and one day she's like, "so I re-negotiated the car loan"

Oh. Yeah. Can't wait to hear the detes on this one.

She had a bit over a year and a half left at $550/month. Rolled it into a new loan for $420/month for another 4 years I think. Can't remember the specifics.

By the time she was done paying for it, at 400/month in year 7, she owned a piece of shit that got stolen or broken into all the time and was worth pennies on the dollar.

I remember her mom said to me once, "well, it was a good investment at the time she bought it". On what fucking planet is a single girl buying a 4x4 domestic truck...NEW...off the lot...for STICKER PRICE a good 'investment'?

I've heard of many people doing some stupid shit with cars(mostly here on RS :) but have yet to see this one matched.

Fortunately, your taste in extinct reptiles is better than your taste in women.

:badpokerface:

[tofu1413]

then, with all due respect, you shouldn't ever get into a 'cost' discussion with anyone, as time value of money is ALL that matters in a cash vs. finance type decision

keep in mind the average consumer doesnt keep in mind of time value of money.

time value of money is ALL that matters to people that KNOW about it.


We dont factor time value of money in our finance. its the truth. I am no financial expert myself.

We are here to get people into cars, get them what they want and away they go at a deal the consumer is happy with. Thats all there is.

My initial post states only that cash price vs finance price, the dealer makes more money with finance price even at "0%", and that is the truth.

[4444]

keep in mind the average consumer doesnt keep in mind of time value of money.

time value of money is ALL that matters to people that KNOW about it.


We dont factor time value of money in our finance. its the truth. I am no financial expert myself.

We are here to get people into cars, get them what they want and away they go at a deal the consumer is happy with. Thats all there is.

My initial post states only that cash price vs finance price, the dealer makes more money with finance price even at "0%", and that is the truth.

you make my head hurt!!!! we're going to have to end this discussion now... :)

[dared3vil0]

you make my head hurt!!!! we're going to have to end this discussion now... :)

You're so smart and we're all so stupid. Like what the hell do you want him to say? He is right after all... Dealer gets kickbacks for the loan. :suspicious:

[tofu1413]

well he seems to be a banker guy, so he factored in time value of money.

Makes sense for him and people that knows about it... but not us average joes.

I read the wiki article actually.... and my head hurts.

[StylinRed]

im really sleepy but ill try to explain...basically,

your moneys worth more to you now than the same amount of money later on due to inflation and the fact that you could invest that money and make a % off of it

so if a car dealership says 0% and you owe $40k to be paid over 5yrs that means 5 years from now they have $40k

so whats $40k worth today? its not $40k because of the ability for you to invest etc
and really, today, you should be able to buy the car cash for like $37k (just an arbitrary # for example purposes)

so even though a company says 0% or "dont pay until 2020" it's considered that interest is calculated into that price



so yes you're right the dealership does make money from 0% financing not only from the "invisible" interest but also from getting a finders fee? from the financing company, sure you may be able to negotiate a bit off of the dealerships finders fee but you could negotiate much more if you offered to pay cash now (and in some cases you could save money by borrowing from a bank instead if you had to)



hope that made some sense

edit here this would hopefully be clearer http://www.accountingcoach.com/online-accounting-course/80Xpg01.html

[some_punk]

Had a customer purchase a brand new suzuki grand vitara from us. Choice of either 0% financing or $2-3000 off msrp. The customer chose the 0% financing, and got the coverage from icbc that gives the full replacement. Well within 3 weeks of financing the car, the customer gets hit and the car was a total loss. Icbc would not pay him what he paid for the car because it is possible to get the exact same car but cheaper. Think about it that way I guess.

[UFO]

Had a customer purchase a brand new suzuki grand vitara from us. Choice of either 0% financing or $2-3000 off msrp. The customer chose the 0% financing, and got the coverage from icbc that gives the full replacement. Well within 3 weeks of financing the car, the customer gets hit and the car was a total loss. Icbc would not pay him what he paid for the car because it is possible to get the exact same car but cheaper. Think about it that way I guess.

Well yeah. Your guy could have gone into your dealership with icbc cheque and bought the exact car for 3k off MSRP because he is now paying cash. Was he expecting to get full MSRP cheque, buy car with 3k cash rebate, then continue his old payments?

[UFO]

per say 0% finance. 0 rebate on cash. principal price is the same. however, dealer technically makes more money if they were to get the customer to finance the car. In theory, finance deals makes more money, so those deals have that little bit more room to make a deal.

invoice price for cash or finance is the same with 0 incentives and 0% interest. Dealer makes money for setting up the loan. The bank pays dealer to set up the deal and the manufacturer pays for the interest.


If the above were the case, i had thought that it's better to take advantage of the interest free finance. Of course cash rebate are common place nowadays so that changes things.

Finance experts: I dont understand time value of money currently, but here is what I thought I understood

Inflation: 10k now will be worth more than 10k 5 years from. My 0% finance terms don't account for this. So I should come out ahead over 5 years

Opportunity cost (I think that's what its called): by paying 167/mth for 5 years, i can take my initial 10k and put it towards my mortgage, other debts, or even invest at a conservative 5% return and take advantage of compounding. Alternatively i pay 10k upfront, but set aside $167/mth to the above but won't save as much on interest or make as much on compounding.

I'm likely missing something, but don't understand it in time money terms

[UFO]

sure you may be able to negotiate a bit off of the dealerships finders fee but you could negotiate much more if you offered to pay cash now (and in some cases you could save money by borrowing from a bank instead if you had to)


So the assumption is there is a cash incentive/ rebate, or you can actually negotiate a significant savings.

In the absence of either, what is time value's role?

[Tim Budong]

At the end of the day, if you are smart with your money, you shouldnt really need to have a big debate on this.

[heleu]

So the assumption is there is a cash incentive/ rebate, or you can actually negotiate a significant savings.

In the absence of either, what is time value's role?

You could be using the same money to either pay off a debt (e.g. your mortgage) or invest and earn interest/capital gains.

[FerrariEnzo]

unless you get 0% interest, not point in having that long of a term... lol

[shenmecar]

At the end of the day, if you are smart with your money, you shouldnt really need to have a big debate on this.

I think the lesson to be learned here is that FINANCIAL guys and SALES guys don't work on the same fundamentals. I agree with tofu though, TVM isn't a subject that everyone knows. Thats why there ARE people who commit to stupid ass 84 month financing terms.

[4444]

You're so smart and we're all so stupid. Like what the hell do you want him to say? He is right after all... Dealer gets kickbacks for the loan. :suspicious:

i'm sorry, but when people start talking about things they don't fully understand or appreciate and I correct them (because this is my area of expertise), i'm not doing it to try and be all high and mighty- this is the internet, you don't know who i am, i don't need you to think anything of me, i was merely correcting a blatant error

not everything is a size of your dick contest, maybe when you grow up and mature you'll realize this

for the record, i was arguing that consumer gets a lower price with cash through negotiating a lower 'principal' amount vs. 0% financing. dealer kickbacks are effectively moot in this argument.

also, simple finance is an EXTREMELY important thing for anyone to know - time value of money is so key to big purchases in life, i'd strongly recommend EVERYONE try to understand it

[dared3vil0]

i'm sorry, but when people start talking about things they don't fully understand or appreciate and I correct them (because this is my area of expertise), i'm not doing it to try and be all high and mighty- this is the internet, you don't know who i am, i don't need you to think anything of me, i was merely correcting a blatant error

not everything is a size of your dick contest, maybe when you grow up and mature you'll realize this

for the record, i was arguing that consumer gets a lower price with cash through negotiating a lower 'principal' amount vs. 0% financing. dealer kickbacks are effectively moot in this argument.

also, simple finance is an EXTREMELY important thing for anyone to know - time value of money is so key to big purchases in life, i'd strongly recommend EVERYONE try to understand it

Not everything is a size of your dick contest yet you feel the need to constantly remind everyone you're soooo much more mature and much smarter than us, So how about you grow the fuck up?

[4444]

Not everything is a size of your dick contest yet you feel the need to constantly remind everyone you're soooo much more mature and much smarter than us, So how about you grow the fuck up?
haha, what? i'm doing anything to try to show how mature or smart i am, the fact that you take it that way shows a clear issue with you, not me

the dude was straight up wrong, admitting as much - i was right, i don't need to prove my rightness for any reason than the greater good.

i know exactly how smart and mature i am, and don't need some nerd behind a keyboard to pat my back and tell me how good i am, maybe you do, but i don't

i'll be grown up and just be done responding to you, how's that

[dared3vil0]

haha, what? i'm doing anything to try to show how mature or smart i am, the fact that you take it that way shows a clear issue with you, not me

the dude was straight up wrong, admitting as much - i was right, i don't need to prove my rightness for any reason than the greater good.

i know exactly how smart and mature i am, and don't need some nerd behind a keyboard to pat my back and tell me how good i am, maybe you do, but i don't

i'll be grown up and just be done responding to you, how's that

You keep proving my point over and over, way to try to act all grown up by ending yet another conversation because you can't stop being a condescending prick.

[StylinRed]

Not to escalate this, but you can be patronizing and if that's the impression you give off to others it's not their fault it's your social skills. the fact that you put the blame on others just furthers the view they have of you. just saiyan http://i1035.photobucket.com/albums/a438/narutokak/GokuIcon001.png
not to say that you were a dick in this thread, in fact i'd say its a vast improvement over some of your other discussions fwiw



So the assumption is there is a cash incentive/ rebate, or you can actually negotiate a significant savings.

In the absence of either, what is time value's role?

maybe 4444 would like to chime in on this but as i understand at that point it doesn't play a direct role but you do have the knowledge that your money can be better used elsewhere

[UFO]

You could be using the same money to either pay off a debt (e.g. your mortgage) or invest and earn interest/capital gains.

Yeah i get that part, as I explained. 4444 was saying its better to pay the cash price, but then you're using the cash and cant use it to service other debt or generate income, which sounds contrary to what I think he would say.


for the record, i was arguing that consumer gets a lower price with cash through negotiating a lower 'principal' amount vs. 0% financing. dealer kickbacks are effectively moot in this argument.


So in the absence of a lower cash principle amount vs. Financing principle amount, as tofu explained the car's invoice price is the same in either case, is better to finance at 0%? And the longer the term the better, as long as one spends withineans and uses the original principle amount in a productive manner?

[UFO]

maybe 4444 would like to chime in on this but as i understand at that point it doesn't play a direct role but you do have the knowledge that your money can be better used elsewhere

Thats what I'm trying to say. At 0% financing, assuming no ability to negotiate a lower cash price, you're better off financing and using the money on other productive things

[VRYALT3R3D]

Most people don't qualify for 0%, and most people are impulse buyers who overpay for their cars.

I would personally not finance a toy(GT-R, ZR1, Viper, GT500, ect)

[4444]

Not to escalate this, but you can be patronizing and if that's the impression you give off to others it's not their fault it's your social skills. the fact that you put the blame on others just furthers the view they have of you. just saiyan http://i1035.photobucket.com/albums/a438/narutokak/GokuIcon001.png
not to say that you were a dick in this thread, in fact i'd say its a vast improvement over some of your other discussions fwiw





maybe 4444 would like to chime in on this but as i understand at that point it doesn't play a direct role but you do have the knowledge that your money can be better used elsewhere

it's the internet, i'm sorry if i don't want to sugar coat everything i say. as a successful businessman (i'm sure daredouche is going to have a fucking field day with that one), clearly i have ample social and business skills in teh REAL world... real world and revscene != same thing

and, no, not going to chime in anymore, clearly certain pussies (not you) are getting their panties in a twist if i clarify things, as they think i'm trying to prove something...

i have nothing to prove to anyone on here, that's for sure

[4444]

You keep proving my point over and over, way to try to act all grown up by ending yet another conversation because you can't stop being a condescending prick.

nice one!!!!!!

[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

[dared3vil0]

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

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

[dared3vil0]

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]

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]

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]

http://stream1.gifsoup.com/webroot/animatedgifs/531864_o.gif

[tofu1413]

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

http://cdn.memegenerator.net/instances/250x250/36322964.jpg

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]

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]

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

http://cdn.memegenerator.net/instances/250x250/36322964.jpg

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 :thumbs:

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

[dared3vil0]

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]

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]

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]

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! :heckno:

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]

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

they were paying 12% interest on a used car! :heckno:

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]

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... :suspicious:

[tofu1413]

the whole rate thing is different from dealer to dealer!

[blee123]

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]

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]

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!

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?

[blee123]

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



2.99% was probably in house financing?

^ Hey Tofu, u havent answered my question above regarding the % rates of financing :okay:

[tofu1413]

% of finance is not decided by us. decided by finance manager/ bank

we are responsible for sale price.

[4444]

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?

The irony, u call me condescending amongst many other things, but now you want my help!?! Fucking ridiculous

The idea would be that a dollar "tomorrow" (let's say next year) is worth about $0.97-0.98 today, due to inflation of 2-3%, so $0.98, lets say, taken today, invested in something that grows with inflation, which in theory is everything, will be worth $1 next year.

Thus $20k, in this case is worth more than cash flow received over a period of time, as you would get inflation growth for the whole amount, for the entire duration.

This is extremely simplified, but again, all down to time value of money.

[4444]

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.

U guys have to stop looking at the interest rate and concentrate, instead on the cash flows.

In the real world, the best loans u can get are heloc's (home equity lines), at 3.5% because they are secured by your house - a 2.99% finance deal isn't the same as borrowing at 2.99%, as you're paying more for the car

I'm shocked at the poor level of simple finance in here, especially for people who sell cars, morally you should know what ur selling/getting clients into

[VRYALT3R3D]

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.

If you buy a brand new car you usually lose the cash incentive when you finance with the dealership.

[4444]

If you buy a brand new car you usually lose the cash incentive when you finance with the dealership.

This daredevil chump will never get it, I've given up trying to help.

Some people are just meant to be bottom feeders - like Kyle's dad in South Park says "the world needs both gods and clods" - he's a clod

[dared3vil0]

This daredevil chump will never get it, I've given up trying to help.

Some people are just meant to be bottom feeders - like Kyle's dad in South Park says "the world needs both gods and clods" - he's a clod

Oh, I'm a bottom feeder? Ohhhhhhh the irony in that statement is incredible.:lawl:

[Lomac]

Behave, children...

[blee123]

Behave, children...

I agree, lets keep this thread alive as it educates everyone no matter if you are a car sales guy or a buyer.

good to know the difference between cash price & finance price of a car (even if finance rates are 0%)

anyone else want to chime in?

[bing]

This daredevil chump will never get it, I've given up trying to help.

Some people are just meant to be bottom feeders - like Kyle's dad in South Park says "the world needs both gods and clods" - he's a clod

lol go easy on him.

the guy is like 20, clueless, and degree-less.. easy pickings for u.

[tru_blue]

lol go easy on him.

the guy is like 20, clueless, and degree-less.. easy pickings for u.

Lets hear your side on this Bing, you usually have some insightful posts !!

[q0192837465]

U guys need to calculate the true cost of things. As mentioned above, there will always be a discount when u pay cash. So u need to factor that in when u calculate ur rates. At the end u may pay less by taking out a 5% loan from the bank than a 2.99% financing from a car dealership. U guys really need to do ur homework. It really frustrates me when ppl buy into the 0% financing bullshit.
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[UFO]

If you buy a brand new car you usually lose the cash incentive when you finance with the dealership.

The cash incentive is not always there, ie. For Toyota cash price is $500 less than lease and finance. Toyota does not negotiate on sticker pricing.

So if there's no cash incentive, you were unable to negotiate a fantastic cash price, 0% finance is offered, i still don't see any reason to pay cash assuming you are buying within your means

[VRYALT3R3D]

The cash incentive is not always there, ie. For Toyota cash price is $500 less than lease and finance. Toyota does not negotiate on sticker pricing.

So if there's no cash incentive, you were unable to negotiate a fantastic cash price, 0% finance is offered, i still don't see any reason to pay cash assuming you are buying within your means

There was no cash incentive on the 2014 GT500 I ordered. I was still able to negotiate $4500 off MSRP. I wouldn't pay MSRP for any car. And the GT500 is way "hotter" of a car then any brand new Toyota. Negotiating the cash price first of the car will always get you a better deal then telling the dealer you are going to finance it or lease it off the bat.

2013 Ford Shelby GT500 is flying off dealer lots (http://www.torquenews.com/1084/2013-ford-shelby-gt500-flying-dealer-lots)

I would also never pay MSRP for any Toyota lol

[UFO]

I totally get that, I just raised Toyota's pricing structure as an example. The markup, MSRP, ability to negotiate large sums off MSRP, are all quite individual to search scenario. Try walking into Honda and asking for 4500 off a civic, I doubt they even make 4500 on it even if sold at MSRP.

Bottom line for me is to do your research beforehand. Blanket statements like is stupid to finance or lease, nobody pays MSRP, cash is always king, dont always hold true. It depends on the car you're after, your personal financial situation, and at times even how good a lowballer you are

[tofu1413]

Civic four door, EX-L full load has about $1800 margin in them max....

Honda fits have less than $900


japanese dealers work with skinny margins nowadays...

[wasabisashimi]

Civic four door, EX-L full load has about $1800 margin in them max....

Honda fits have less than $900


japanese dealers work with skinny margins nowadays...


I guess you'll have to be a super negotiator to get Toyota to sell you at closer to their cost then the $500 max.

Points i learned : car is not investment, house is investment. And buy a used car with Cash

[VRYALT3R3D]

I guess you'll have to be a super negotiator to get Toyota to sell you at closer to their cost then the $500 max.

Points i learned : car is not investment, house is investment. And buy a used car with Cash

You just need to find out the holdback and invoice pricing and work from the invoice up -- not the MSRP down.

[tofu1413]

I guess you'll have to be a super negotiator to get Toyota to sell you at closer to their cost then the $500 max.

Points i learned : car is not investment, house is investment. And buy a used car with Cash

gotta know the right person to get discount at Toyota...

I refer my clients looking for Toyotas for straight up fleet price... it aint bad :notbad:
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[wasabisashimi]

gotta know the right person to get discount at Toyota...

I refer my clients looking for Toyotas for straight up fleet price... it aint bad :notbad:
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By Right person, do you mean "connection"? or the right "salesman" and their mood YMMV?

[tofu1413]

more like personally know a manager.. salesman have no say on sale price!
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[tru_blue]

more like personally know a manager.. salesman have no say on sale price!
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do you know the toyota manager at Toyota richmond or in Vancouver?

[tofu1413]

a store in vancouver. but by referral only.
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[tru_blue]

U guys need to calculate the true cost of things. As mentioned above, there will always be a discount when u pay cash. So u need to factor that in when u calculate ur rates. At the end u may pay less by taking out a 5% loan from the bank than a 2.99% financing from a car dealership. U guys really need to do ur homework. It really frustrates me when ppl buy into the 0% financing bullshit.
Posted via RS Mobile

so when dealers advertise as 0% financing, how does it work in "real life" ? What actually happens?

It isn't as good as a deal as it sounds to be right?

[UFO]

It IS as a good a deal as it sounds. There is a possibility you can negotiate a better deal if you are paying cash, assuming that the dealer is open to negotiations or there is a cash incentive/rebate offered by the manufacturer