Purchasing Strategies - Questions & Success Stories

isellhondas

What he/she is trying to do makes no financial sense whatever but they are determined anyway.

A ton of better choices indeed!

robr2

rvr2 - don't take it personally. It sounds like you are financially capable of paying for the vehicle but it sounds like you've always worked in "cash" instead of credit. You're intial question should've stressed that.

The old timers here have seen plenty of folks asking how they can magically make negative equity disappear, finance 150% of the msrp of a vehicle, and get an MB CLS560 for $299 a month because they have to have every option and a lifestyle. I call them $30,000 millionaires. And we all try to tell them that they are committing financial suicide. We're just trying to help.

Basically paying it off before trading or let the dealer pay it off for you would net the same result creditwise - you satisfy the terms of the loan agreement.

exb0

Ok, let me step in defense of rvr2. You guys are acting a bit arrogant towards this individual. This individual could be independently wealthy or a trust fund baby, who has always paid cash, and thus no credit history. It doesn’t matter how rich you are, if you don’t have credit history, you need a cosigner. The credit application doesn’t ask about your net worth, it asks for your income. If your taxable income is low, because you have been living of a trust fund, and you don’t have credit history, guess what, you need a cosigner. Also, it does make sense to get a secured loan for a car instead of paying cash, especially if one has to liquidate high yielding securities and get hit with the capitals gains tax for it.

From the lending institution’s stand point, it doesn’t matter what you do, they are lending $35K on a $60K car. From your perspective, you are better off paying the car off and then going to the dealer with title in hand. First of all, you will get more respect from the dealer. Instead of thinking that you are some sucker who is overextending himself, the salesperson will know that you are a person of means and treat as such. Secondly, you will have more flexibility with the title in hand. You will be able to sell the car to other dealers, including Carmax, or to a private party. Also, if you think you can get $30K for a car that you paid $33K a year ago, you are in for a rude awaking, but that is a different thread altogether.

explorerx4

i don't buy the 'change in family situation' angle, and i think you just don't have any 60k vehicles to sell.

graphicguy

pch.....bingo!

rvr2....I'm not sure what exactly you're trying to accomplish. I do believe there are other motivating factors at work here than we know. But, hope things work out whichever way you decide to go.

pch101

You guys are acting a bit arrogant towards this individual. This individual could be independently wealthy or a trust fund baby, who has always paid cash, and thus no credit history. It doesn’t matter how rich you are, if you don’t have credit history, you need a cosigner.

We can only work with the facts provided, and I presumed from what was provided that this person probably had maxed out his existing credit line, which would explain the need for a cosigner. That would indicate that the credit isn't bad (i.e. he has a track record of servicing payments, so there aren't necessarily blemishes), but that his resources aren't there to justify any more debt.

The point made earlier is that financing institutions take a pretty liberal view of what constitutes an acceptable risk, so someone who is not an acceptable risk should understand that the bank is actually doing him a favor by saying no -- being denied in this case is a blessing, not a punishment. And I am inclined to think that anyone who insists that cars below $60k are unacceptable probably has a tendency to overspend, anyway -- surely you know how few cars on the market today are in the $60k+ price range.

bolivar

I may be wrong, but I would think that if your bank is holding or has some kind of access to inquire on these high income producing assets, this bank would have no problem giving you a loan without a co-signer. And if these investments were thru this bank, could place a hold on an asset against future payment of an auto loan. I know CD's can be tied to a loan, giving a loan rate of +2% above the CD rate.

Of course, your high income producing instruments probably produce much above the current CD rate...

Also, and I'm not a banker, but could you not provide a 'formal' financial statement to a bank, the kind of document where you can be prosecuted if you lie, and using this document a bank would provide a loan without a co-signer?

dino001

, who has always paid cash, and thus no credit history. It doesn’t matter how rich you are, if you don’t have credit history, you need a cosigner. The credit application doesn’t ask about your net worth, it asks for your income. If your taxable income is low, because you have been living

If one is rich but has no credit there are better ways to build it than co-signed 60 grant loan. Independently wealty person doesn not need credit for their every day life, so they can afford themselves time and build credit from ground up. You know - bank's credit card (if your checking is in hundreds of thousands, I'm sure local branch manager would be happy to give you one), department store credit card or even secured credit card. And you don't have to carry a balance - just charge and pay in full every month. Makes more sense and is cheaper - tons of immigrants (including yours trully) did it.

Things simply don't add up... I see no independent wealth "coming across here" - more of "I need this last model of ..., cause I'm getting a rash in anything that is below 30 grand - the cloth upholstry is just abominable".

Kirstie_H

this is how new members get run out of our Forums. Instead of answering the question that he asked, members start offering advice not sought, using information that they simply aren't privvy to.

Thanks to those of you who actually answered the member's question instead of inserting conjecture & suspicion regarding the member's financial situation and purchasing motives.

carguy3500

i can answer this,and i will not call you names or make fun of you.i am a sales mgr. and have been in the business for over 25yrs.the best thing for you to do is take the cash to the dealer.cash down payment will help you far more than trade down payment. almost any bank will pick you up with that kind of down,with out a co singer. AND dont worry about what these people are saying.about a yr. ago i ran across this forum.i thought i could help,ya no being in the business.but they do not like carguys!!! they made fun of me because my grammer and spelling is poor.and i telling you they were mean!it was worse than what they are doing to you.so for the past yr i have been reading,and im telling you these people dont have a clue at all.its funny.eny way hang in there and enjoy the new car.dont forget take the money to them and they will treat you like a king

carguy3500

im sorry form my spelling make fun of me if you wish

sky23213

I know it's a little late - from your post I see you bought a car already - but I just finished reading this thread, so couldn't reply earlier, but thought I'd mention it just as a fact. There is a dealer in the Minneapolis/St. Paul area that has been offering that as their "VIP Package" or something. It's free oil changes for life (as long as you own it) on any new Hyundai (every 3K). I don't know if it's supported by the manufacturer in any way, so might be just this particular dealer's incentive.

jipster

...make fun of me if you wish

Sounds like an invitation, but no thanks. He's watching you know... and I don't mean tidester. :surprise:

Kirstie_H

Yes, and I'd hate to see this:

happen to any of our members.

tsgeisel

Been a while since this topic came up - but in case anyone else can use the information...

A quick google search came up with a couple of URLs that may or may not be of interest:

http://consumer-law.lawyers.com/Automobile-Bait-and-Switch-Sales.html
and
http://www.lemonlaw.com/spotdelivery.html (which is a site for a law firm, but the information seems valid).

And, as we learned with Bill Head, consumers in Georgia and Tennessee have far fewer rights with regards to spot delivery than in many other states.

maradag

The first step to car buying is to determine how much you can afford. That's quite simple to do if you are buying the car, but when leasing (one of the advantages is) you can usually afford a bit more.

How do I determine how much car I can afford to lease?? I know where my payments need to be and how much I plan to put down. But trying to figure the rest out has been giving me heartburn.

My husband just got a Jeep Grand Cherokee in May(06) with payment of 324 per month (with $3k out of pocket and 15k miles per year) and I know the MSRP was just about the same as the Pacifica I'm pricing... (residuals are factored in, I know) but my first step is to figure which cars I can even look at and then determine the payments...

Someone help me... I don't want to go into the dealer negotiate a good price on the vehicle (be it Pacifica, Explorer or Mountaineer) and then find out that even having negotiated a good price, its out of my range.

Thanks.Mara

graphicguy

Mara....the Pacifica has a $1,500 rebate. The Grand Cherokee has a $3,500 rebate.

As has been reported in the recent news, Chrysler got into a bit of hot water from their dealers for forcing them to take lots of inventory. So, now is a good time to negotiate.

First, Chrysler dealers are overloaded. 2nd, GCs and Pacificas aren't real popular right now.

I'd start out at invoice, then subtract the rebates. I wouldn't go over about $100 over invoice then subtract the rebates.

Don't know what residuals are for these vehicles (can't be good, unless Chrysler is subsidizing them) or the money factors are on them.

dino001

That's quite simple to do if you are buying the car, but when leasing (one of the advantages is) you can usually afford a bit more.

First and for most, don't lower confuse payment with lower cost. Lease is generally more expensive than purchase, regardless of lower payment appearance, unless:
1. it is based on promotional rate and purchase option has no such rate (some luxury brands have this), or the manufacturer inflated residual so much that they subsidize the lease on its back end, and
2. The consumer doesn't drive their vehicle very much, and
3. they have so much money or so little self-control that they will get a new iron after short period of time (2-3 years).

Lease is wonderful at time of signing up, usually not so great at its term end. Then suddenly "wear and tear", mileage and other aspects bite with a vengeance. Downpayments on leases, but unlike in loans, benefit the bank in much more than the consumer. They lower monthly payments, sure, but if the leased vehicle is totaled day after the papers are signed, the bank will not give the money back to the consumer - not a chance. If one leases, no downpayment is the most desired option (just initial taxes and fees) - even with higher payments. It also keeps the lease to loan comparisons much more accurate. The way

jlawrence01

GG,

I have to disagree with you on the Pacificas. When the vehicle first came out in 2004, it was a real dud and they were giving them away. Now, they are moderately popular, hence the smaller rebates on the vehicle.

I drove a 2004 Pacifica for much of December and was pretty impressed with the ride and feel of the vehicle. I did not join in the bidding war that arose over the vehicle (which was coming off lease).

I agree with you completely on the GC.

oldfarmer50

While walking in the mall a few days ago I spotted a new Saturn Sky on display. On the windshield there was a typed sheet (not the regular sticker) which listed the base price,options and delivery charge. Under all these figures was listed a separate item called "Holdback" for about $800. This seemed odd. Isn't holdback the amount off invoice which the dealer gets back from the mfg. when the car is sold? Why would the buyer pay holdback to the dealer when the dealer will get it from the mfg.? Is this some scam or does this have something to do with Saturns' "no haggle" price?

british_rover

I drove a R500 and a Pacifica back to back. The pacifica was better.

cccompson

It just sounds like yet another way for the dealer to generate additional profit.

graphicguy

j....I don't know much of anything about either the Pacifica or the GC. I drove a GC a couple of years ago, but it was a rental. I can't remember even sitting in a Pacifica.....ever.

I'll defer to your experience.

tallman1

Oh good... I'm glad I'm not the only one experiencing double posts today.

tidester

We're aware of the problem and our computer techs are working on it!

tidester, host

maradag

Dino001,

Thanks for you input, and your refresher on the ups & downs of leasing but I'm not confusing lower payment with lower cost... Fact is that I've done alot of research and you can't always find the answers to the questions you have, however, I'm fully aware of the difference between buying and leasing and the reason I choose to lease is because of the lower payments that are affordable to me at this point. I can't handle a $500 monthly payment regardless of the fact that I own the vehicle at the end. I'm on top of my financial limits in that respect.

What I need to determine prior to even researching vehicles is how do I know which cars I should even consider... At signing of my past two leases I was definitely more flexible, open to what I wanted to drive and wasn't as needful of certain features. My first car had an MSRP of 22k, the second, $26k and the monthly payments being offered were in my reach.

With a family now (that is likely to grow) there are things I need in a vehicle which most of the lesser priced suv's do not offer (3rd row seating and sufficient cargo space with a super safety rating).

What I need to know, is how do I determine affordability without going into the dealers and wasting anyone's time??

Thanks again for you thoughts.

maradag

Graphicguy,

THANKS... you've given me a good starting point on my initial offer should I go with this vehicle...

Here's a hypothetical for you...

MSRP: $33,485
Invoice: $30,675

I go in and offer $29,000.
Dealer says $29,500
I say "Com'on, you've got 26 of these in your inventory"
Dealer says "ok" (fat chance but wishful thinking isn't a sin).

So, then I say, "Great. $29,000 less the $1500 incentive and 1000 lease loyalty for a grand selling price of $26,500."

Now what do I do???? I want to lease this vehicle. Got any tips??

Also, I want them to take my current lease, pay the last payment of $295 (small nuts) and be rid of it.

thenebean

depending on the vehicle you are looking at, i dont see any dealer giving you a -1600 deal below invoice and then include the rebates, etc. and THEN eat your last monthly payment. thats just too much. i guess you could ask, but with an offer that low, you'll probably just get the "we're too far apart, have a nice day" line.

just some thoughts...

-thene

graphicguy

mara....I'm not big on getting into protracted negotiating sessions. As others here can tell you, I believe the longer you sit at the negotiation table, the more you're going to be "bumped" up on your offer.

Using your figures, invoice is $30,675. Add your last lease payment to that of $295. That brings it to $30,970 (just as an FYI....I'd probably drive your current iron for another month and get a "clean" deal done after you turn your car in. If you're ride is in good shape, you don't have much to worry about. But, I'd still want to know what the lease company says about any unusual wear/tear/over mileage charges, if any).

So, we've got $30,970, less $1,500 rebate, for $29,470. I'd offer $29,500 + TTL. Go to a couple of dealers with that offer and see if you can get them to bite. Tell you're firm on your offer. If that doesn't work, come back here and let us know what the dealers said. We'll go from there.

maradag

I don't know if this makes a difference but it may after some info that I read... its a Chrysler Pacifica and 2 dealers within 10 miles of my office have 25 or more in stock....

But I could see where the dealer would turn around and say that....

maradag

I'll give it a shot... Its more info than I had before... so now I've got some guidance and some confidence to go out and do this.

Thanks everyone!!! I'll let you know how it pans out.

thenebean

it may, just pointing out the other side. you never know unless you ask! but you need to be prepared the salesperson could just show you out the door.

either way, best of luck, and let us know how it goes!

-thene

maradag

This is a two tiered question and although its vehicle specific in this case, I'd like to know how to handle it when I visit a different car dealer (I’m also considering Mercury and Toyota).

Ok, so I requested a few quotes from local dealers. Dealer A said he'd give me a price of $29,610 (he said that was their price) for a car (07 Pac. AWD) with only a powerlift gate, no other options. MSRP $31,080 Invoice $28,558, Edmunds TMV $29,729-$2500 (incentive/loyalty) for $27,229.

Dealer B emailed me back and gave me a price of $29,992 on the same vehicle with more in it(Pac. AWD Touring U Pkg.& moonroof)with an MSRP $33,485 Invoice $30,675 Edmunds TMV $31,984-$2500 (incentive and loyalty) 29,484.00.

First of all, do you think this is a good price??

Secondly, how do I go about telling the dealer A, that I received this quote from dealer B, said quote being superior than what he offered me…
- Do I call him and tell him or do I go in there and show him the email??
- Do dealers call other dealers to verify?
- Should I block out the name/email address of the person whom I’ve been corresponding with at dealer B??

Mind you, dealer A is just across the street from my office (and much more convenient than dealer B, who's over the bridge.

Thanks for your thoughts!!!
Mara

thenebean

just some thoughts:

if you are trying to work with dealer A because they are your local dealer, i would either call the person you were emailing with, or go over there with your information. i think its a good idea to cross off or black out the other dealers information on your email. tell them that they can do this deal for this particular car. tell them they are your local dealer, and you would like to work something with them first. ask them to meet or beat the deal.

if you have no connection to dealer A, then i would work directly with dealer B from the get-go, since they seemingly gave you a good deal from the start. (i am not sure how good either deals are, as i am not familiar with what specials are available and what pacificas are going for)

anyways, some thoughts from a former saleswoman

-thene

graphicguy

mara....lessee what we've got here.

Dealer A.....MSRP=31,080
Invoice=28,558

If memory serves, we've got a $1,500 rebate, and I'll assume another $1,000 loyalty rebate.....$2,500 total rebates.

I still think the market may be soft on the Pacificas given the fact that they've been out for awhile with no significant refresh. Dealer A is offering their Pacifica to you for $29,610. $26,058 is the invoice minus rebates number I come up with. I'd counter with $26,100.

Dealer B....same deal....more options (can you use those options?). MSRP=33,485. Invoice=30,675. Minus 2,500 in rebates gives you 28,175. Their offer is 29,982. I'd offer 28,200.

Lots of room to play on both deals. Neither dealer is doing you any favors with their offers.

Decide which one you really want. Go in, give them my number. Tell them it's firm and non-negotiable. You're buying right now. And, all you need is a yes or no answer. Tell them you've got another one picked out at another dealership (which you do). They might balk and try to counter, but if you're willing to walk away and stand firm, I'd bet one of those places will eventually accept your offer.

frenchv

Can someone please give me some sound advice?

Here's my situation,

Current car: 2004 BWM 235ci sprt pckg
milage 47k
monthly pyts. $565
interest: 5.25%
balance: $21,872.03

Goal, sell or trade in BMW for cheaper car

just got approved for 20k from bank for another car loan. Loan appr. good for 90 days

Should I sell the car privatly or trade it in?

I am saving money for the negative

Dr. J

abraindrainer

You can still pick up an '06 Pacifica for $6.5-7k below invoice! Even '07 are going for well under invoice (before rebates) at no-haggle dealerships. Check out carmax or fitzmall! You can almost always do better than those prices. :shades:

cccompson

There was a very recent discussion about such a car (might have been an '03) that had a bunch of miles on it over in the Real World Trade-in Values thread. You might look/post there.

frenchv

thank you!

hwthrnjm

I sell vehicles for a "One Price" Dealer in Texas...so we have done away with the intire negotiating process. We price our cars in such a way as to give the best price up-front so customers spend more time getting the vehicle they want rather than wondering how much its going to cost. This also allows me to help people purchase vehicles acroos the country using our pricing as a benchmark for other dealers that sell the same kind of vehicle. I am often asked "How do I get the best deal?" Well here are my 2 cents of how to get the best deal from a negotiaitng store.

1st of all....see what numbers you can get by phone or email....the more info/numbers you get this way the more you can shop without leaving your chair....plus it gives you time to see honestly how "cool" that dealer will be to work with.

2nd....dont be in a rush, even if you are. Act as if you have all the time in the world and your shopping everything from kia's to Benz's.

3rd....dont discuss what numbers you want. I repeat....DONT DISCUSS WHAT NUMBERS YOU WANT. Once you give up your hand, its hard to keep a poker face.

4th.....work the deal as if you are paying cash before talking finance or trades.

5th....Car Math is just like 1st grade math:

a) For every 5k you finance, you are going to pay around 100 bucks a month for it over a 5 year term.

b) For every year under or over 5 years on financing...either add or take away about 35 bucks a month.

c) For every 1000 you either put down in cash or trade equity....or add to the loan because of negative equity...take away or add 20 bucks to your 5 year loan per month.

d) Your rate (or APR) Doesnt matter THAT MUCH on your payment like a lot of people think!! 1% in RATE = 11 to 6 dollars a month extra on a 24-60 month term respectively.

6th.....To get financed from tier 4 (worst) to tier 1 (best)...you HAVE to have a 580 to 720 beacon score. Anything lower and be happy you got a loan...but be prepared to pay some crazy rate.

7th.... if one dealer couldnt finance you...chances are NONE OF THEM CAN no matter what they might say......you hopping from place to place will only make your score worse. Pull your own credit and go shopping that way.

8th....and possibly the most important........SPEAK AS LITTLE AS POSSIBLE

The more you talk, the easier you are to read by the snakes. Negotiators do it for a living....regardless of how smart and savvy you think you are. They are professionals at what they do...I used to be one...and I feed my kids with this job...and I heard every kind of story thats possible to come up with.....and the more you talk or act like you have read every book on car sales...the more you are giving yourself away.

By knowing everything you can before you walk in the door and making sure they (we) (me) doesnt know that....the better.

Also...keep in mind that not being honest about a rate you may have gotten with your own bank or financing is not really the best course of action.

We as dealers see rates all day. We see the best credit to the worst credit and we know what it takes to get whatever rates are available. Also, a dealership like mine uses over 30 lenders to get people bought. So that means I know what the best deal in town on rate-payment-term is by 730am every morning. The reason I want to know that is becasue this tells me what people need to get bought....and that helps me make money because that helps me get more people in a car that otherwise might not get done....or know that they could go for a new car when they thought they couldnt.

So the moral of the story is very simple....find the car(s) you want...compare them thru info sites, drive each one...and do your own math. Walk in the dealer, give them your math, tell them the rate tier you qualify for and tell them to clean and gas her so you can get your new car on the road.....just bring a pen to sign with and you are in and out within an hour or so and I (we) can go help someone else get into their new baby as well.

At least thats how I like to do it!

Of course not all dealers are that easy to deal with...so search till you find one that is!!

tidester

5th....Car Math is just like 1st grade math

Unless you finance in which case even Albert Einstein himself would cringe.

Also, schools generally don't permit the use of calculators in the first grade - yet.

tidester, host

hwthrnjm

ok....4th grade then??? LOL

abraindrainer

1st of all....see what numbers you can get by phone or email
5th....Car Math is just like 1st grade math
8th....and possibly the most important........SPEAK AS LITTLE AS POSSIBLE

WELL said! Getting pricing details online/phone allows for the most hassle free processing and the least possible information to leak out. Show discipline and only answer the questions that are pertinent to getting the lowest price.

mako1a

In Sept of 1999 I had a 1994 or 1995 Explorer Limited (I forget which now) and saw a 2000 Z71 on dealers lot that caught my eye. Went to see MSRP. Salesman comes out and says will you be trading the Explorer. I said yes. (I had previously looked it up on Edmunds. Trade was around $12k.) He said we will probably give around $8k for the Explorer. I said this is a Limited. He says (I kid you not) if it was an Eddie Bauer we could go a little more. I shake it off. The guy is an idiot. He continues to irk me so I tell him to go away then I depart. Next day I go to work and talking to a lunch buddy I tell him of the event. He has gone to lunch in my Explorer many times, but never said he wanted it. He says what do you want for the SUV. I said the book says 12. He says what will you sell it to me for. I said $10k. He said Deal! I said I have one favor to ask. Negotiate me a price on that truck, please. He says no problem. With the Explorer trade out of the way we go truck buying. Jimmy has a big yellow tablet, calculator, pens and info on the truck. I pull up a chair, grab a magazine and watch him do his thing. First we dismissed the original salesman that irked me within 3 minutes the day before. Told the SM to keep him away as he was an idiot. He said OK. Jimmy gave offer after offer since it was price only. No finance, no trade and I would be doing my own title work. Third try did the trick. Jim says if he accepts this offer you may want to take it. Guy comes out and says “you guys drive a hard bargain blah blah blah”. I sign the papers. Write the check and ask for the keys. I said temp tags please to drive it home. The guy finished bolting on the T plates. I signed the title to Jimmy, guy gave me the Certificate of Origin and bill of sale to the Z71 and off we go. Got the $34,350 truck for $27,550. Next day I get to work at 7 Jimmy comes to my desk at 7:10 with my plates and $10k. Wish they were all that simple.

mikefm58

Jimmy gave offer after offer

Nice story, but that part doesn't sound right. Sounds like Jimmy got bumped up several times.

grandtotal

...just bring a pen to sign with...

Wow, you're dealership really does cut costs to the bone.

frenchv

If I were in the market for a 07 Toyota Camry, what kind of bargaining strategies could I use?

hwthrnjm

Honestly...I have an affliction against toyota...nothing personal or not an attack on you....i just have seen some things with toyotas that would make others cringe. But the principles I have stated here work no matter who you are buying from.

Just follow the steps...and if you have a particular deal your working that needs some third party advice...post it here. Ill give you my opinion.

hwthrnjm

For some reason I skipped this post....just saw and brought a smile to my face.....touche'

maradag

Thene, Graphicguy, Abrain... You guys are awesome!!!! I don't know how I'd get thru this grueling process without you!!!

Thanks for all your thoughts, guidance and suggestions!