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Edmunds.com - Confessions of an Auto Finance Manager

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  • In March i replace my wife's 2005 CTS with a 2008 model. Since it was CPO and carried over 3 years remaining factory warranty any extended warranty was out of the question. I financed with USAA which included GAP ins in the rate (3.4% if i remember). This dealer didn't play the mop n glo game, so that was good.

    The only thing presented to us was a tire & wheel "replacement plan" that cost more than a new wheel and when i read the fine print (and i do read it all the time) i noticed that it did not cover curb scrape incidents, which is the ONLY time i ever messed up a wheel (and i have messed up wheels on curbs before...) It basically only covered blowouts, pro-rating the tires of course, which is what the tire mfr warranty will cover also. IF i blew out and trashed the wheel - not likely unless i were to drive on it - then my USAA ins would cover the wheel damage which they have done in the past.

    So I passed on that., and he didn't even bother trying to match my USAA rate on the finance. Not too bad, but then again, i try to come prepared when i'm buying a car.

    Fast forward to Nov 2011.

    This time i'm looking at a V8 STS for me. Didn't have the wife with me, she was not happy about me even looking for what turns out to be our 4th car, but hey...

    Anyway, i ended up getting a Platinum ed V8 STS. very rare cars. I had a pre-approved 3.4% USAA financing, but the sales mgr who was also the sales person, it was a late afternoon, early evening session, mentioned that Ally (the new GMAC) was offering 0.9% APR on this car. I thought that only applied to 2010 or later, but nope this car with only 11,000 mi was eligible. I gave him just my info since my wife was at home in Tampa (I was in Pompano - no V8 STS anywhere near Tampa!!) He told me it took an entire 5 seconds for Ally to approve me at 0.9%, so i tore up the USAA draft.

    No mention of mop n glo gap, or anything else. He even orffered and i took him up on reimbursing me for the rental car drop fee (I rented a car to go there - didn't want to put 500 mi on my Fleetwood to go look at a car), and my gas.

    Too bad i blew that with a speeding ticket driving back :mad: That car is a rocket! :D

    While the items can be a benefit to SOME people, this is NOT KNOWN in advance, and the actuaries have it all priced out so the house (seller) never loses, so i generally don't take these up. The one time i bought a GMPP for a car, we never used it and i ended up turning it in for a pro-rated refund when we traded the car.

    Again individual experiences cannot be predicted, but I firmly believe in Cadillac CPO cars with their 6 yr 100,000 mi warranty. We have done well by them the past 7 years.
  • sandman_6472sandman_6472 Coral Springs, FLPosts: 2,579
    Live just west of Pompano and have heard good things about that Caddy dealership. Car sounds like a winner but a speeding ticket? Guess the cop had no sympathy when you told him you just purchased this puppy! :(

    Enjoy the ride!

    The Sandman :) :sick: :shades:

    2014 Hyundai Tuscon SE/2005 Mazda 3s/2008 Hyundai Accent GLS/2009 Nissan Versa SL hatch

  • ken117ken117 Posts: 179
    Seems I struck a cord as few sales folks enjoy having their profit sources questioned.

    Neither insurance for a $40K vehicle nor health insurance can be compared to overpriced extended service contracts peddled by F&I managers. To imply such is simply a straw man argument. The vast majority of folks need both but not so many actually need the extended service contract.

    I am simply knowledgable about finance which is what I do for a living. Paying for an overpriced service contract is almost always a bad way to spend one's money. Seriously, I doubt many folks would knowingly give hundreds of dollars in profit to a F&I manager. Mwa1, perhaps if you are an F&I manager you can start a new practice of disclosing to car buyers the actual profit you make for each F&I product sold in the Box. Wouldn't that be refreshing?

    I really doubt I will ever file for bankruptcy considering all the money I have saved over the years from not buying overpriced F&I products.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,986
    Are you a Southern California resident who recently (within the last 6 months) financed a new car purchase for more than 72 months? We're interested in learning more about your experience. Please drop us a note at pr@edmunds.com by Friday, June 14 2013.
  • isellhondasisellhondas Issaquah WashingtonPosts: 17,356
    How much profit a merchant makes on the products and services he sells is NONE OF YOUR BUSINESS!

    If you feel the product or service being sold is a good value, then spend the money. If not, decline whatever is being offered!
  • karhill1karhill1 Posts: 98
    Some of us understand the F&I office is where a dealer hides its most effective sales person with the intent of earning thousands in profit. Dealers are fully aware their F&I offices remain the one area within which they can continue to earn huge profits.

    It is not the value of the F&I product which is a concern. It is the deception employed by car dealers to sell such products at inflated prices which is MY BUSINESS.

    Much to the chargin of car dealers, astute buyers can research the invoice cost of vehicles along with the various incentives available. A buyer can shop the various dealers to locate the best value on the purchase price of the vehicle.

    Such information is not so readily available for F&I products. Products sold in an office occupied by people who are continually trained on the necessary steps, which skirt the legal requirements, to deceive people to buy mostly worthless products which are marked up by hundreds if not thousands of dollars over actual cost.

    Anyone interested should search F&I games or F&I scams on the internet. A real eye opener.

    What concerns car dealers, F&I managers in particular, is customers are finally understanding the truth about the F&I office. This along with the scrutiny dealer F&I practices, particularly with regards to dealer reserve, are receiving has caused dealers to recognize the days of them earning thousands in the Box is coming to a close.

    As always the only words a customer should say in the Box is hello and NO.
  • ken117ken117 Posts: 179
    Anyone who is not concerned about the profit a dealer makes in the Finance and Insurance office is a sales person's delight, a home run just waiting to be hit. That person will pay thousands to enhance the dealer's profit magin as well as to increase the commission for the person who sells the Honda.

    Clearly there is a reason people who sell the Honda get concerned when we buyers inquire as to the profit a dealer makes on the various products or helpful services he, or she perhaps, sells to consumers. Profit is a great motivator.

    Perhaps someone who sells the Honda could justify the reasonableness of the $500 or more dealer documentation fee service, or is it a product, so many dealers now kindly provide to we customers? Is this an item which is NONE OF OUR BUSINESS?

    Or perhaps the person who sells the Honda could defend the reasonableness of dealer reserve, which occurs when a customer qualifies for a certain interest rate and the dealer kindly marks it up a couple of points, thus increasing the poor dealer's profit without informing the buyer! Is this one more product or service which is NONE OF OUR BUSINESS?

    What else is NONE OF MY BUSINES?
  • billy3554billy3554 Posts: 147
    If a dealer's profit is none of my business, perhaps we should do away with the state franchising laws which protect the auto dealer method of selling vehicles. Just have the manufacturers sell directly to the customer.

    Go Tesla!

    Think of the money that would save the customer. No more profit layers, profit to the manufacturer, to the sales person, to the dealer. We could buy on line directly from the manufacturer and pay just one profit.

    Work out a few matters such a trade vehicles, financing, etc. Do away with the F&I office crap, another win for the customer.

    What is not to like?
  • ltlladyltllady Posts: 27
    One of the major national car dealer organizations announced it earned a healthy $1,250 in F&I profits during 2012 for every vehicle sold. Clearly, we consumers need to be as concerned about a dealer's F&I profits as we are with the selling price of the vehicles we buy.

    Considering this $1,250 amount it is true even the best sales prices can quickly be undone during the in the time we spend with a slick F&I person. Really is it any wonder car sales people are so adamant in their belief we consumers have no business being concerned with a dealer's profit?
  • ken117ken117 Posts: 179
    I do agree I, as a buyer, need not be concerned about the profit a dealer makes on the sale of a vehicle. In fact, I am only concerned about the price I pay for that vehicle. If I get my price, I really have no business with the dealer's profit or loss on that sale.

    What I and other buyers, as exhibited by some of the posts on this topic, need to be concerned about is the somewhat deceptive practices dealers use to increase those profits in the F&I office along with any lowball price a dealer may try to pay for any trade vehicle I have.

    It would be remiss of us, as buyers, not to make such activities our business.
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