Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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Purchasing Strategies - Questions & Success Stories
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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They'd ask me "what's your best price?" I'd say "my BEST price is there on the sticker, since I could buy momma some perfume and take her out to dinner if you paid that - what did you have in mind?"
Sales guy called me today and said that before they bring the car from the other dealer, they want to make sure that I am qualified for the low APR that the manufacturer is offering.
I see that they want to make sure that I get approved for the loan with low Apr and buy the car from them. They want to make sure that i buy it so they won't get stuck it in case i change my mind. At the same time, I am concerned that what if I get approved for the loan and the dealer don't have the car for weeks. I have already put down a deposit and I feel like they shouldn't have to ask me get approved for the loan before they even have the car on site. I have to mention that he asked how my credit is and i told its excellent which is true. Thats why I opted for the low APR instead of taking the rebate. I think this should give them comfort that I am a serious buyer and that I have good credit.
Any suggestions? I would appreciate a quick comment from someone who has some experience in this as I want to get back to the sales guy as soon as I can. Thanks.
Please understand that I am not criticizing your credit or knowledge thereof, just explaining why the dealer wants to do it this way. On another note, have them compare standard finance rates with the rebate to the low APR payment. If your credit is excellent, then you might be better off.
If it came time to pick up the car and you found out there and then that you were NOT eligible for the low APR, you would be mightily peeved. Getting you approved for the loan right now will save everyone from bad surprises, and gives you time to make other financing arrangements if it doesn't work out.
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2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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She has a 690 beacon, a GREAT beacon score for any of the manufacturer-sponsored financing programs, credit unions, most banks, etc. She has two years on the job. OK, here's the rest of the story.
She has two lines of credit - one is a Sears card for a $250 limit, with a $60 balance and only $60 ever charged - last month. The other is her cell phone account, with a max bill of $80.
Also, she's a waitress (assistant shift leader at Hooters), and claimed $2500 a month income, but that's mostly tips, and could verify only $1200 a month in paycheck stubs.
The salesman ran her credit, saw the 690, knew the time on the job, and rolled the new Honda for her - she was REALLY happy until the F&I guy called her back and told her the deal was a no-go with only 2 lines of credit with total max limits of $400 (combined) and only $1200 a verifiable income.
Two things happened - first, there is a contract in place, but because she listed $2500 and could only verify $1200, the application appeared false, so that whole thing of making the dealer eat the contract was out the window, even if your Dad is a consumer fraud investigator...secondly, she called me in tears after they told her they wanted the car back.
After two weeks of battling back and forth, talking nicely to the nice guy sales manager, and talking in a mean tone to the mean F&I guy, I resolved it - we got her restaurant manager to write a letter verifying her total monthly income, had it notarized, and she had to put another $1500 down.
All this started when one of her friends, whose dad is the used car manager for this Honda store, said "go talk to my dad and he get you a great deal on a Civic" - she had a great deal, and then reality came crashing down around her.
The great side is she had good equity in her trade, got the Civic for invoice, and has a 4.9% rate through AHFC.
I think it is VERY proper to have a credit apporval before going to ANY expense on a dealer trade or order.
And compare it to what you get approved for at the dealer, then decide if you want their financing or their rebate.
We were pre-approved at about 4%, we bought a Pilot (under invoice), AND they got us the Honda 3.29% rate.
We were satisfied.
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Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name.
2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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people lie all the time, but if this buyer is looking at say 3% versus $1500 rebate, and can qual for a say 4.5% note, maybe they take that and get the rebate.
If they rely on the dealer, the dealer has the dealer's best interest at state.
I once had a dealer tell me with my credit I could ONLY get 11.5% note, I laughed in his face - I was just stunned. He said sorry (always at the last minute don'tchaknow), well I said whatever, and I got a 5% note on line THAT NIGHT.
The best rates (at dealers were around 3.9 at the time (for the pope and maybe your church president only).
So walk in with your own financing and no worries.
Cell phone on a credit report?????
Neither mine or my wife's report contains a cell phone company, but again, we're older with scores in the 720-730+ range.
And you have to watch out, even my OWN BANK tried to sucker me with a higher rate on my last car. "rates have gone up" or something was the excuse, to which I replied, "can you have someone look into a lower rare for me??", which they did, and I got the same rate as back in Aug.
That was wierd, a lot of folks would have probably said "OK", because rates DID go up from Aug-Jan, but that doesn't mean they have to charge it all back to you...
Of course they would have laughed at me if my scores weren't so high...
And whoever said it was RIGHT ON when he mentioned that just paying all your bills on time does not equal high credit score. The % of balance to credit line, total of all balances, total POTENTIAL LIMIT all factor into it.
My general opinion is that if the car you want is already on the lot, you may be able to negotiate a better price if the dealer wants to move it. If you have to order the car(or is a hot seller) then the employee plan is the way to go, set price usually below/at invoice plus applicable incentives.
Any comments?
Thank you
- 6 months early is too soon to be negotiating prices. Too much can change in that time, unless you mean you want to buy anytime from now, out to 6 months.
- Rebates should come off after the price. Same with the trade. basically, negotiate a price on the new car that you are happy with, then take off the rebates (and add fees, etc.). If you have a trade, tell them you may or may not be trading, but get the price on the new car nailed down, then deal with the trade, otherwise you will get royally confused in the numbers.
- Get everything neatly itemized, in writing. The best way to get burned is to just get a final number, assuming things are (or aren't) in it, and be wrong. It's very simple to do a form, showing price of hte car, + taxes/fee, - rebate, - trade in allowance. That way, you can make sure that all the numbers are in order (less chance of a surprise).
- do yourself a favor, and, when you have everything detailed out, take some time (overnight?) to go and think it through and review the deal, if you aren't 100% comfortable with what you are doing. THe dealer will always want you to sign the papers right then. Doesn't neccessrliy mean they are trying to trick you, or it's a bad deal. They just know that once you leave, you may not be back.
IMO, if they won't let you step back and think about the offer, it's likely not something you want to sign up for (or a place you want to deal with_). Of course, there is a chance that the car you are looking at will be sold out from under you, but unless you are looking at something super rare, there will be another.
- Try not to deal when you are under pressure (such as your old car just died, and you need one right now).
- Sin (deal) in haste, repent at leisure!
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
No, I don't think it is nice to haggle a long time with a salesman and then take his lowest price to another dealer.
No, it is not nice to haggle over a price and then mention that you have a trade. That would be deceitful.
I suggest you be straightforward and honest with the salesman, and keep it simple. Do your price research here on Edmunds. Then go to the dealer and offer a price and see if they will accept it. There is no reason to play games with the salesman.
If they ask you to sign an offer, refuse to do it. Wait until the bill of sale to sign anything.
If they ask you a question you don't like, ignore it.
Don't let them control your behavior.
If you tell your salesperson you are six months out, they will lose interest quickly and for good reason.
And, yes, be upfront about your trade. Any salesperson worth his salt will suspect a hidden trade. The trade is worth what it's worth either way. If you don't like what you are offered you can sell it yourself.
I think it is OK to go to the sales manager and tell him you might be buying a car in 6 months and you would like to drive one of their cars to see how it feels. Even a relatively new used car would be OK. No need to put miles on a new car if you are not buying anytime soon.
As long as you are upfront and honest with people, it is OK.
Heck, it takes us more than 6 months to even decide on the color car we want. We ain't very quick thinkers.
agreed.....however, do be sure to negotiate the price of the car and the price of the trade completely independently so you don't lose sight of the cost/value of each.
Then go to a dealer and say, "I will give you my car and $15000 for a new jazzmobile". If they say Yes, then buy the car. If they don't say Yes, then go somewhere else.
Kepp it simple.
Drop off your trade info over at Real-World Trade-In Values with a FULL description .. and you will be close enough for horseshoes and hand grenades .....
Terry.
Yes, the Navy has a class on money management where one section is car buying. They explicitly mention to do the hide-the-trade bit.
In any case, you can't do anything where I am stationed without a car. My shipmate decided she wanted a NEW car. She's never owned a car before. Never had insurance.
She did her homework, though. Before I talked to her she had backed out of a high pressure deal on a Civic. She also wasn't happy with the $1600/6 mths of insurance from Geico.
Round 2 involved looking for the same car at the other Honda dealer. With no option choices on Hondas, it isn't that hard to do.
After a bit of looking we found insurance for $675 and she was much more confident about actually buying something. Then we came here and looked up invoice on a Civic Value Package. I told her all about the Bobst method of car buying and about dealing ONLY with an OTD price.
We tacked on the 7% sales tax to the invoice and got a price of $14,900.
The next day I asked how things went. She never budged from 14,9 and got her car with 8K down (signing bonus) and 7K financed at 2.9%. Not bad for a 20 year-old who had never owned/purchased a car before.
Jason
Thats actually really poor advice ....
But, if I had my way .. all military would get 0% interest and their car loans could be frozen while in combat ......... but George W. hasn't called me for my advice lately .......
Anywho ... I'm glad things have worked out.!
Terry.
2) Decide how much you want to pay.
3) Find a dealer that has the car and make an offer.
4) If the offer is refused, then increase the offer. Keep increasing it until the offer is accepted.
The only trick is to know when an offer has been refused. Last week we made an offer, it was refused, we walked out to our car to leave, opened the doors and started to get in, and the salesman came out to say they had changed their mind. This has happened to us more than once.
From our experience, you don't know your offer has truly been refused until you get in your car and drive away. Therefore, you should only make one offer on each visit to the dealer.
If you change your offer while at the dealer, then you are into 'negotiating', and I don't know nuthin about stuff like that.
I'm glad it helped you, Cti.
Bobst
My wife was the one who took the course and I grilled her for the details. I thought it was good advice until I started reading from y'all why it is a bad idea.
We military folks may not get 0% financing, but we do frequently an extra $500 rebate and low financing from the military credit unions.
I would have used the Bobst method for my car purchase last month but the dealer's initial offer - $300 over invoice for military - was lower than what I would have offered.
I read somewhere on here that buyer confidence a is what makes for a sale. My friend's homework yielded a confident, knowledgable buyer who had no fear of pulling the trigger.
Thanks for everyone's advice. I know my friend was very happy with her car buying experience after initially dreading it.
Jason
here's the deal folks. if you buy a car at wholesale (invoice or below) from a dealer, dont expect the world on your trade. the dealer, and rightfully so, is looking to make a little money somewhere, and will try to do so on the trade. do your homework, check all the websites (terry mentioned running it through real life trade in values on edmunds here) and know that there are market conditions that also come into play on trades. and you ALWAYS have the option of trying to sell your car for more money. Have your trade appraised a couple of times, and if you are still getting thousands below what you "think" its worth, then its time to reconsider your thinking.
another thing, if you think the dealer should buy your car from you at a really high price because that is what the car is worth to you, you have to understand that you love your car, and the dealership, or the next guy who buys it, has no attachment to it - for that extra value you put on it.
also, your car isnt always going to be worth more than you owe on it. chances are, its worth less than you owe. the dealer doesn't want to pay more for your car (after he's given you a below invoice price) when he can buy your car at auction for xxx number of dollars.
just some thoughts from the other side - so you can see how we deal with these kinds of things. hopefully it helps, and good luck with getting your best price!
happy motoring,
thene
Why? Cash down, short-term loan, trade equity, things like that can put you in a great position. General statements like that are what keeps the urban legends flying and people scared to make a business move because of incorrect assumptions.
As long as you ALWAYS keep in mind that that the value of the car, and the balance of your loan, are in NO WAY related to each other, except in your mind.
I've seen people make the stupid mistake of selling a car for less than they could have because they were only trying to hit their payoff bogey.
I've also seen people ask what someone's payoff is, and only offer that much, simply because they have that mental block that the value and payoff are related.
MODERATOR /ADMINISTRATOR
Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name.
2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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Welcome to the world of auto sales ...............
Terry.
Is that correct?
You lost me here. Care to explain why?
You are buying a car for $20,0000
You are trading a car for $10,000
tax and plates will be about $800
If you owe nothing on your trade then give me $10,800 and have a nice day.
If you owe on your trade in and want an accurate out the door price, your payoff needs to be added to the deal. How much is it?
Most people look at the highest figure they can find in any of the info sources, of course they don't deduct for the bald tires, no recent service and that small $2,900 ding they received at Aunt Gracys when they backed over the dog house ... if Kbb is higher, they use that figure, if the Nada is higher then they use that figure, if the 24 year old loan officer at the Credit Union think it's worth $35,000 then they use that figure .... sometimes it's best to be the 2nd or even the 3rd dealer because it takes that many visits for the "real deal" information to sink into the customers head ~ ever hear of: "they shoot the messenger" ..?
I read lots of these posts on the other boards, but try not post back, it's a waste of time for me .. and the reason why is, that I've seen Thousands of contracts and many deals that someone said: "I got a better deal - "they put $2,000 more into my trade" - "the dealer was greedy and wouldn't work with me" - "they insulted me with the trade figures" ... the funny part is, most people get their feelings hurt and when you look at the "Difference figure" (the real deal number) most times, not all, the figures are rarely a few hundred away .. and Most times, the biggest difference is options and the MSRP .... aah yes, it's just that folks have a tendency to leave that part out .l.o.l..
Terry
So, I guess it makes sense to deal with that. Kind of like pulling the credit right upfront, to make sure the deal will go through.
(I found that pulling the credit works in my favor...when the see my Beacon score of 750+, and I make it clear that I could trade the car there, but I have enough credit to sell it elsewhere, we are able to focus on the price of the new car with no issues. Negotiations go much faster that way.)
Look at how many posts I answer over at RWTV's - now step back for a minute .. most of these folks have a Nada book in one hand and a Edmunds print-out in the other, then they see a RWTV figure .. all of a sudden, they get the "dead mullet look" and they look like one of those bobbing heads in the back window of a 49 Mercury - they don't like what they read, so they use the other figures instead .... that said, I get 25/35 emails a month from the guy who posted in January or the buyer from 2 weeks ago that finally "gets it" .... I guess it's an underground "update deal" ..l.o.l...
Terry.
you're 110% right! people always bring in the trade in value that is highest (kbb, nada, edmunds) and expect us to give them that for their trade. I tell them to have kbb, nada, or edmunds write them a check for that, then bring it back here to do the deal ;-)
i always explain to customers there are many different guides out there, and they all take different things into consideration when putting a value on a car. the best way however seems to be actual market value (or auction reports) because we could go to the auction and buy the same car for that price. try to tell that to a customer! they arent too happy at all.
i mentioned in another post (i think it was here somewhere) that i had a guy come in with the print out of KBB retail! he wanted to see what we would sell it for, and take his trade in value from there (essentially deciding what we OUGHT to earn for profit) i told him that if i could sell all my used cars for kbb retail, i would be a rich and happy woman! ;-)
anyways, its a mixed bag out there - people dont wanna get ripped off, and i dont blame them, but they also need to learn that sometimes, their car just isnt worth to the rest of the world what it is to them! trade in values are a tough thing.
oh, for whoever it was that asked about the payoff, it makes a difference in how the numbers are worked out. we may show our discount on the car by giving you more on your trade to cover the payoff (then keep our car at MSRP) or show you a discount on the car to cover the payoff, and show you a lower number on your trade. its all a numbers game - you just push them around a bit till the customer and dealer like how they look.
happy motoring!
thene
I happened to take an average of several of them. And I also averaged them at different levles of condition.
The fact is, the used market is a joke, plain and simple.
If you must get a certain price for your old car, sell it yourself.
You will never ever get a good price in trade, unless it is nearly worthless anyway, or unless you know of several $K in repairs that are needed that you are successfully able to hide from the dealer.
I have had a few real junkers that dealers offered me a lot for, and they adjusted the new car price accordingly.
In the same breath, I had a dealer, SHOW ME THE NADA BOOK and price and ask, is that price ok for your trade?
I was stunned in my time buying cars - it was the only deal that was clean start to finish - I assume that dealer was simply 1 car away from meeting the month's quota or something.
i wouldn't say you will never ever get a good price in a trade, but i would say that you will almost always get more selling yourself than trading in. sometimes the convenience factor is enough for people (and in some states, the additional tax savings).
its different everywhere - if you are happy, thats all that matters
Plus, in most states, there's tax credit for trading that you don't get if you sell privately. I've sold many vehicles privately, but on some that I thought I'd have a problem with, I traded instead.
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Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name.
2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
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