Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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Once I knew they were either 1. pushing back up the price they quoted me in writing, 2. not giving me for my trade what they just wrote down they were giving me or 3. jacking up the interest rate, I knew it was time to leave.
It disgusts me so much -- they could've had an easy sale if they just would've been honest. I was already pre-approved from my credit union, which I explained, so there was no need to try to jack me around and they lost an easy sale because of it. How STUPID is that???
Opportunity to what? Lose money on the car? like Joel said - I would rather concentrate on a customer that will appreciate my efforts, and will give me a chance to make profit.
One thing you are not willing to accept: you will have to work to get the best price. Do your research, contact people, show commitment, give something in order to get something. Spamming dealers will not get you the best price.
a) be honest with me.
b) determine what I am willing to let go on.
When I review proposals, I review the offer honestly and openly. I know that the salesperson will make more money on the extended warranty I am asking for than for the vehicle itself.
Besides, the government puts public notices in the paper when they have a project that is required to be publicized that it is available to bid on (usually construction, but often it is infrastructure equipment). Why shouldn't I be able to do the same thing as a consumer? It is, after all, my money.....
Well, for one thing you are not the goverment. So just because it works for them, it doesn't mean it will work for you.
Like somebody else said earlier, you can go ahead and send email to 20 dealers, but that won't necessarily get you the best price. That's just the nature of the game.
I tell my government salespeople to look at the paper every day to find out if there are any city/county/state agencies that have a public bid notice that we can actually bid on. Is there such a place that car salespeople look at?
I am NOT emailing individual dealers, I did with the motorcycle because I knew the actual players. There are more car dealers than motorcycle dealers, it seems to me that there would be more competition for business. The Wings I bought came from a shop that has sold an average of 1 GL1800 per DAY, for the last 3 years, and that was not one that went for bid, because I knew that they would be right on..
Kind of like a lendingtree.com for cars? Interesting. I am not aware of anything. The closest I can think of is submitting a request through Edmunds or something like the Costo program.
Do realize that you ARE looking at low margin sales.
You help the end user solve a problem with your widget, then help him to write the specs so he can buy it.
1) they have to CREATE or FIND opportunities when they can, and not wait for them to fall on their desk. So they are trained on where to look for them.
2) the relationship does not end when the contract is won and fulfilled; in my industry, personal purchases and word of mouth referrals are often generated. In some cases, we will win a subsequent contract based on the price and performance on a previous deal. The subsequent relationship is often more valuable in the big picture.
I try to teach my team members to not wait for opportunities. The ones that don't realize these facts as gospel in our segment, often quit within a few months, or are let go due to the fact that they cannot grasp these concepts. Quite frankly, as a sales manager, if they cannot get a clue on these items, I have no use for them.
I think that car salespeople are in a lull sometimes and may feel that they can rely on business just walking in the door. That may work a lot of the time with a small team, but what happens when a salesperson is competing with 10 others for the same business in a slow month? If I was that salesperson, I would be looking for ways to bring business to my desk, in addition to whatever support I might get from who I reported to (I'd look for police departments, school districts, city maintenance departments, and other sources that often have an annual budget to replace aging vehicles; I would also offer employees special pricing after the city deal on personal purchases).
Your new here aren't you? Everything gets away from the original question.
State tax is 7% ($790) plus about $100 in other fees. Edmunds TMV was $11,235. What is a fair price to ask? List price is $13,900. I am willing to offer $11,300. Is that too low? Should I say $11,800 OTD? $12,000? Or just forget the whole OTD thing and offer $11,300 and just pay taxes later?
Suggestions on next plan of attack? Am I in the right ballpark?
Never buy new. Let someone foolish or rich take the first hit.
Buy 1-3 years old off daily rental or off lease.
Buy a car with great resale value if trading every 2-3 years.
Buy a domestic car if you want to get in cheap - then drive it til the wheels fall off.
Be willing to pay a bit more for low miles. In our case, I buy a newer car with high miles. We don't drive a lot. In 3 years it transforms itself into a low mileage car for better resale and no one knows.
Maintain it well. Listen for small problems before they become big expensive problems.
Understand your vehicle. I do, and seldom if ever does my car see a dealership in 100k miles.
A local junk yard will do my repair work for much less, and I can buy my parts cheap online. They don't care.
The guy races and builds his own stock car and knows what he is doing. I make sure. Stands behind work too. The other choice is a family owned garage. They're Audi experts, and labor is much less than dealer.
Most check-ups are profit for the dealer. Monitor it yourself.
I still buy Japanese. Have for over 20 years, but the new CTS or Malibu may bring me back.
But, I like something fun to drive. My cars are not. I may still go for the new BMW 335 twin turbo hard top convert. It really gets it. P R I C E Y though. I'll be lookin in 3 years.
Many of you won't agree with this and may even shudder at the thought, but I'm the millionaire next door and no one would guess. Maybe you can see why. (Buy the book - used, of course. Same words)
I only have to impress myself. I'm paying the bills. I also pay cash. Oh yes, one more thing, and this is a biggie. Continue to make payments AFTER you pay your vehicle off - TO YOURSELF. Put it in a savings account with auto deposit, and forget about it. Drive the car a few more years, and pay CASH for the next one. I am not willing to let someone make money by loaning me theirs. Be smart. I used to get paid mileage. I took the check right across the street and put it in my savings account, then paid cash for my next car. I drove a Vette. Try it. Works great.
I also have multiple savings accounts for major bill categories and use auto deposit, so I never have to worry about having money to pay a bill. THEN, I try to pay them out of pocket and let the accounts grow. It's great to be able to make MYSELF a loan or a gift from time to time with the excess. :-D
I would be very cautious of this. I know people that trade cars every year or two and they don't care about what they do because if anything goes wrong with it it will be long after they get rid of it.
Tell me would you buy a two year old car with 20-25K miles on it that never had its oil changed?
My mom used to say, used cars are for sale for a reason.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Do you really think driving hard in a modern vehicle damages it in any way? Short of collision or off-road damage, do you think flooring the thing around town is doing anything bad for the car other than waisting gas?
If you test drive the car and it wants to turn left while going straight, or it wobbles going down the road, or it doesn't have a straight body panel on it, then yeah, that one might have issues, but joe-shmo traveling salesmen flooring it up and down I-75 doesn't worry me too much.
There's a reason for the rental companies selling one year old cars for so cheap.
Yeah, they are undesirable fleet sale vehicles with no resale value (re old Taurus, Cobalt, etc). I had a Neon as a rental a couple years back from Enterprise and when I returned it the guy tried to sell it to me. He told me how much the wanted (which I thought was very high) and I just laughed and walked away.
The Sedan de Ville I once rented had a new trunk as a lady had reversed into a truck while leaving the parking structure. So while yes these vehicles appeared new they already had been in fender benders where body parts had to be replaced and repainted. I'm also sure the paint never quite matched but then I always noticed that after I was told it was repaired.
If you want to owne a car - don't. Car is not an investment. Lease instead.
Take advantage of $0 down as much as you can, the less money down - the better.
Don't worry about the residual and the money factor, here is a very simple calculation: You shouldn't pay more than $150 including tax a month for every $10,000 in the MSRP. Example:
Audi A4, MSRP $30,000. With $0 down, your total payment should not be higher than $450 including tax.
Don't lease for more than the warranty period.
Mileage limit is a myth. You can get as many miles per year as you want with a lease. You will pay for it, just as you would if you owned a car, and payed in servicing and depretiation. Again - make sure you don't run out of warranty.
Worst financial advise ever.
best way to own a car is to buy it and keep it as long as it runs well.
Your example you will always have a car payment and will pay more over time. Not a good ideal.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Of course, to each his own. I have been doing this for 30 years and have not hit a bad one yet. There are things like Carfax and service records from the manufacturer. Many still have factory warranty, or you can buy an extended warranty with the savings. I never do. Of course, if you are the kind of person that has trouble with your finger going through the toilet paper, this is not for you. One should have some knowledge of cars, have an ear that notices something not sounding or feeling right to best use this method. I know people that run to the dealer for everything, and the transmission will fall out. Don't ask me why.
So you buy one under warranty. Drive the crap out of it for a week to a month. If there are any weak links, they should announce themselves in that amount of time. Rental cars will be maintained far better than the example mentioned, and they will have a record for that car. It's really not that much of a gamble. You would be surprised at how many cars on your dealers lots are these very cars. Well, where did you think they went? Right into some unsuspecting owners garage, so why not buy one without the dealers added profit? If you would get a bad one, trade it in. You will still lose less on it. You buy it at wholesale and the dealer gives you wholesale as a trade in. Would you rather buy at retail and then get the same wholesale price when you trade it in? I bought a 90 Galant, a 97 Camry rental that had been damaged and repaired, and the last was an 03 Avalon, less than a year old with 19k on it. The price was great as it was higher mileage. Now it has 50k on it and considered low mileage, so I gained value there. It is my wifes car. I added the gold package, wood grain interior, factory mud guards, and a color matched spoiler. I bought it all online for only $420. A dealer would have charged me at least 2 1/2 times that. Then, my wife put on custom wheels. We switch to original in the winter. It is pearl white and a beauty. I posted pictures on the older Avalon forum awhile back. Each of these cars stayed with us for 60-100k with no problems. See my posts in the Avalon forums.
I wouldn't be worried about todays cars with less than 30k, even if abused. They should be able to take it, and hopefully any weak links taken care of. I also bought a 90 Infiniti Q45 that had been in a major ($25k) crash when 6 months old, and had a complete repaint @ 48k. I saw it before and after paint. The service record was a horror story. It was burgundy with the gold package, matching wheels, and a white leather interior. Sticker was $50k. I bought for 14k and sold it for 17k. I made the dealer throw in a 3 year extended warranty. The car drove perfectly and looked new. I only kept that one a few months and was able to sell it with a 3k profit with that extended warranty - which I normally wouldn't buy. Again, to each his own, but I can buy a more upscale car for the same money, so why not?
You are closer to the truth than you know
Right
Precisely. That is roughly $200 less than someone would pay on a 5 year purchase. If you really love the car and can afford the 450 payment and not the 650 why not? You are getting a car you love, you can get out of it after 3 years and get into another one without rolling any negative equity over. Now remember: I DID say leasing isn't for everyone. But for younger people it's the best way to drive a new car every couple years and potentially pay hundreds less than a purchase payment.
Ah yes, that instant gratification thing, and I do understand that. But it sure sticks itself in your butt down the road. I will wager that ten or so years ago when you look back, it will make you say hmmmmmmmmmmmmmm, coulda woulda shoulda. But, we have all been there. ;-) I always had to have the latest and fastest. What I found out though was that I had to put much more away later to make up for time lost and money wasted when the kids needed to come first, house payments etc. It just makes it a lot harder. Now, If you're married and young professionals, it won't hurt nearly as much, but you had better have at least a million bucks when you retire as it won't be much by then. It's an individual choice, but many don't understand the trade off.
You are right about leasing and negative equity. Unfortunately, there is no equity either.
The only rule of thumb about leasing that makes sense to me is that if the monthly payment on a short term lease is 1% (or slightly more) of the MSRP, the deal is probably worth doing.
You're right, but it's not because they are junk or worn out. The rough stuff goes to the auction where your dealer buys them and puts them on his 'Cream Puff' lot. And remember, these still carry the rental company warranty plus at least 2 years of manufacturer warranty, so where is the big exposure?
And remember, this is the prime reason your domestic car has horrible resale value. Rentals are dumped on the marketplace. Surely, you have heard of supply and demand. Lately, the big 3 have cut production and reduced this supply. I just read an article stating resale value is going up because of this - and because they are finally building a product worth buying, relatively speaking. I have a $5-10 gain on the GM stock I bought a year ago.
Wasn't this listed on the rental history, or didn't you check that or the services that provide history? Light hits don't bother me much if the price reflects it. Front stubs can be replaced, but bodys are a different story. I worry that the cut and patch areas being properly rust proofed again. Most body shops today will only replace parts due to libality. That's pricey, but good.
In a word...HELL YEA! Just go to YouTube and type in "car rentals". One guy flooring it on I-75 might not cause damage but 250 yahoos doing it on a daily basis could really put wear on a car.
I used to think a lease return would be a better choice until I heard some of the "no maintaince" horror stories. I'll never understand why a dealer that leases a car doesn't require proof of routine care upon return.
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
I haven't read the replies yet, but can imagine what they say. Me? I couldn't disagree with you more. I will only pay someone for using their money for as little time as necessary to accumulate the money to pay cash. Buy smart, buy used. Take the smallest hit that you can, and make money from the methods of people that lease and buy new. I practiced this and used the money I saved for investments. There is an interesting book called The Millionaire Next Door. I just bought a copy. Used, of course, for $4, not $30. Same words as new for pennies on the dollar. I do the same for music. I can buy any car I want and pay for it, but I won't. The security blanket feels too good. I never want to be in the position where someone can take something away for me. What leasing company do you work for again?
I don't know Snake. Sounds like he called you an old fart. :mad:
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
Don't they call that opportunity? And, aren't you supposed to answer when it knocks? I left that part out of my post. Let me add it here. Didn't someone just post "Most of you don't know what you are doing?" True, and the one that screws himself is the one who is convinced that he does know. IF you don't understand the workings of the business, that may be you.
- Understand how things (dealerships) work
- Understand the product. Know what you want, what it's worth, and what you want to pay for it.
- Understand the impact of resale value.
- Once you understand these things, BE PATIENT. Wait for it to come to you. But you have to understand the above, or you won't pull the trigger. Deals don't wait.
I have been watching the housing market in Arizona. I get notified of new listings. I know what things sell for. I watched it for a year and a half. One day a property came on the market for a price that I knew was way too cheap. I made the decision to buy in 5 minutes and we bought for $40,000 under the going price - sight unseen.
But, I knew the market. I understood what the property was, and what it could be with minimal work. We went down for 2 months last year. It was exactly what we expected. We painted, replaced the carpet, and I re-sealed the roof - not because it needed it, but because I wanted insurance against unexpected problems when we weren't there. I can rent it out for one prime time month and cover all of my annual costs and expenses i including HOA, insurance, taxes, and recreational membership to 13 centers.. The market is down now and we still have that margin because we bought right. So what? I will keep it. When ready to sell, I will educate myself on market conditions, be patient, and sell when the market is peaking. So you see, there is a method. Find the one that works for you. It's unbelievable what stupid things intelligent people do. Take advantage of it.
If everyone would follow your advice - buying used cars - I would be making about 5 times as much as I do: any car salesman will tell you - all the money is in used cars. Why? Because of this myth, that you should buy used cars. Also - I get better deals on leases, because there are people that will pay premium for my car after I turn it in, which is fine by me.
My point is - I will put my free cash into something more useful than a car, and if I don't have cash - I will not pay interest and sales tax on something that will depreciate, and will give me problems, as soon as the warranty runs out.
BUT, those aren't your only options. NEITHER is a smart choice, but they certainly are a choice - and your dealer really loves you for making it.
"you can get out of it after 3 years and get into another one without rolling any negative equity over."
Doesn't 'negative equity' offer proof of a dumb choice in the first place? A lease is in the same category.
So, you have a vested interest if people follow this advice?
"If everyone would follow your advice - buying used cars - I would be making about 5 times as much as I do: any car salesman will tell you - all the money is in used cars. Why? Because of this myth, that you should buy used cars."
You are correct. I have a good friend in the business. He sells used cars. Why? "Everybody can find out my cost on a new car. My plan is to get your for as close to nothing as I can, as you have no idea how much I have marked up my car." See guys, if a dealer has his car marked up 4 grand, and you come in with a car worth 1 grand, he can offer you 2 grand for your trade. How many times have you heard 'Why, he gave me twice what my car was worth. I couldn't afford not to trade.'
So, now the dealer has your car, and a nice 2 grand profit from his. He's really liking you after the screwing you just gave him. A story can be told many ways. Pick the one best for you.
But you assume that I would buy from a dealer. ONLY if I understood the game. I buy rental or off lease vehicles because of the price, and I know they were maintained, not the clown who drives for 2 years without changing the oil - at least on rentals. Does a lease have requirements for changeing oil etc? Do you need to prove it when turning the car in?
I have also read articles and heard how big money is charged for any scratch or flaw on a car, so you very well may not get what you think you will.
Yes, but how much will you have into that $35k car at the end of the loan, including interest paid? And, what will it be worth at the end of the loan - I assume it is a long one?
Ummm, why would anyone pay a premium for a lease return. Aren't people posting here bashing that kind of purchase? Your car, if anything, with that stigma, may indeed be worth less than a well maintained local trade.
The thing is is that if you lease vehicles you will always have a car payment. If I only leased cars I would have had to make 120 car payments over the last 10 years. But by buying them and keeping them I have made 60 car payments over the last 10 years. Guess what I did with that money that I wasn't spending on car payments.
Why not drive more vehicle for a lot less payment.
You are really not doing that all you are doing is shifting the cost of things around.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Actually if you ad TTL to that $30K and finance the whole thing it would be $180 more. But after 5 years you have no car payments and own a car worth several thousands of dollars. With leasing after 5 years you will be on your second or even third lease, with nothing to show for it but further lease payments.
I do personal financial consulting and one of the first things I do is tell these people to get out of their leases and buy something more sensible. Some take that advice, some don't, those that don't I guarantee you will be spending their retirement greeting people at the local Wally World.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Man, you hit the nail right on the head. Be smart now, play later - not pay later. Have you read about all the baby boomers that have their [non-permissible content removed] in the wringer because they operated in a foolish manner when they were younger? Much of the reason is what is being said here. You won't get ahead if someone else is making money from your decisions, but it's hard to be smart when in your 20's. Far too many are still in this mode in their 40's and 50's, as you well know in your business. I couldn't do it. It would be too frustrating when you give people good advice that will get them out of a bind, and they just keep doing it. People just refuse to look past the end of their noses.
How much will it be worth in 2012? Don't know (and don't really care) but probably still a pretty good number on a car that will be just like new considering it's driven less than 1000 miles per year.
And with your Audi you'll have zip.
Have to admit that this is the post of the day. The wife and I both a good laugh at that one. Her response: "That's why so many young people are broke." Big car payment, big house note, big student loans and no money to invest or to participate in a 401(k)/ 403(b) programs. It is a guaranteed way not to build any wealth ... unless you are Chase or Citicorp.
More car for less payment? Well, not really. All you are guaranteeing is a constant outlay of cash for a longer period of time. I have looked at the cost per mile of operation of thousands of leases and have yet to see a lot of benefits.
Gotta agree with Snakeweasel on this one.
How much will it be worth in 2012? Don't know (and don't really care) but probably still a pretty good number on a car that will be just like new considering it's driven less than 1000 miles per year.
And with your Audi you'll have zip."
Zero % makes sense. And, yes, in your scenario, you will do fine. And yes, with Audi will be worth zip. Mainly because I don't have one. ;-) I did have a 5000 that I bought when I picked up a Wall Street Journal and read about their unintended acceleration years ago. They couldn't get rid of them, and I always wanted to try one. That's an example of a deal coming to you. The bad resale can work for you. Same with the 74 AMC Matador coupe I bought when less than 2 years old with a new engine. Service record was over an inch thick. The guy turned in front of me with a for sale sign in the window I tracked him down. Once I got the story from the dealer, I bought the car, and never had one problem with it. He had nit picked everything to perfection because he didn't like the car. It listed for $5200 (yep, no extra zeros back then), and I paid $1900. I sold it sight unseen to a couple from New York that had had one and found it through the AMC Club for $2500. He thought it was cheap and asked me how I came up with the price. I had to tell him that I just picked a rubber outta my [non-permissible content removed]. I was thrilled to death with that number. Who ever heard of making money on an AMC product? So, you will do fine on your horse.
When I bought my AZ property, I set up an annuity to make the payments @ 6.2%. If the annuity performs at the market average of around 10% I can have my cake and eat it too. BUT, I had to make a decision early on. I had to have money to plant the seeds into that annuity. To do that I had to make financial choices. If I wanted the newer fast cars, I would have to really buy smart. That means no long term loans (there were no zero percenters), and NO leases. On top of that, we decided that my wife would stay home and raise the kids. That meant I had to figure out the game and make it work to my advantage as much as possible with a single income. I do practice what I preach and I know it works.