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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So we shoud give similar thoughtful consideration as we would to an investment. Such a decision has a potential to influence our life in a similar way (i.e. bring benefits or make it miserable and bring more losses/expenses). But saying - it's an investment is a stretch beyond what I would say.
And for reasons stated earlier, I would avoid putting words "car" and "investment" together as potentially more harmful than beneficial to majority of "less informed" public.
2018 430i Gran Coupe
Its called maximizing utility and I agree with that. All along I have been saying not all profit/pay back is monetary.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
The only thing that has me a bit stumped is how do we use this information? If a salesperson quotes an interest rate higher than the current rate program in place, how exactly does one go to the salesperson and tell him/her “You’re fibbing and charging me more money”? They are bound to get defensive and put you in a position where you can’t deal with them.
How do you go and tell them that buyers nationally (including your area [after confirmation, of course]) are paying an average of “x” amount of dollars under invoice rather than the price that that dealer quoted?
We’ve got all this useful information; some of us may have the knack to figure out how to use it, unfortunately, I am not one of those people and I'm sure there are others like me. So here are my questions and ask anyone’s input for how to handle.
1) Interest Rate/Money factor quoted is higher than program offered.
2) Price quoted is higher than what many are being offered.
3) Dealer is using a residual (leasing) that lower than other local dealers.
4) Dealer swears that his invoice is a number that you are (90%) sure is NOT.
These are some of the hurdles I have been faced with. There are probably more but I can’t think of them at this point.
Looking forward to tips on how to deal with these scenarios.
Thanks everyone.
Mara
1) Go to your local bank or credit union and get their best quote. Maybe pre-apply at several places. Heck, even go to the manufacturers website and see if they have a way to pre-qualify you. Then tell the dealer what terms you have and ask them to beat it.
2) That's OK, that's their job to try to bump you. Just pick what you feel is a good price and stick to it. I've walked out of many a dealer and found my price at another dealer down the road.
3) Don't know squat about leasing so I can't comment.
4) Invoice numbers as well as MSRP really don't matter, so I never bring them up. All that matters is the market price for what you're looking for. Do your homework and offer that price. See #2 above.
Good luck.
Regarding promotional interest rates or leasing, not everybody may qualify, so if your score is below the required threshold, then you may experience a bump that is unavoidable. Being aware of one's score is a good thing in that case.
Regarding residuals, the dealers are not allowed to change them - they are dictated by banks. However, since every bank can have their own residual guidelines, the delaer may simply try to offer you one one with higher rates/lower residuals. All you can do is say "no - try again" or just "no - thanks for your time".
Invoice is probably the most irritating thing - there are variables that are not included in published invoices and they do vary from brand to brand. The best approach is not to get into back and forth what the invoice is, unless you are buying under some "invoice plus/minus" fixed type of program (like Ford's X plan, GMS, etc.). Just figure what you think your price is and offer it prepared it may be rejected. There is no law saying Joe's Ford has to sell to Mara at invoice or at any other price for that matter.
2018 430i Gran Coupe
When we walk out, they usually follow us into the parking lot and tell us our offer has been accepted. That's how it has been on our last three car purchases.
Anyway, Mara, listen to Mike's advice.
Keep your knowledge to yourself. You don't need to tell them why you won't accept their offer. When I lived in Germany there was a great phrase that meant "too expensive". It was common place to use it there. I wouldn't get away with it here. However, statements like the following can change the deal to your favor.
a. You may want to sharpen your pencil and come back with a much better number.
b. I'm sorry. I really want to do business with you today. However, that/those figure(s) won't allow a deal with me to happen.
c. Thank you for your time. Call me if my price changes to $x.
2018 430i Gran Coupe
So, when I saw a post in one of the forums here which disclosed the manufactureres program, I figured out that my payment was $23 more a month because of the higher interest rate that Mr. S quoted me. All the while, Mr. S @ dealer A, swore left and right that he can't do anything about the rate and residual because its set by the bank. Ya, ok.
What do you guys think about Lendingtree.com where you get 4 quotes from institutions?? FYI, lendingtree.com, will get you a quote on a purchase or a lease!
Secondly, I've found that there's no negotiating with dealers in close proximity to my home or work. And I know that I'm not far off on my pricing. I mean, are they really that hell bent on getting their own way that they would sacrifice doing a deal, period?? Does it really make sense to drive 30 or 40 miles to get a good price? I guess that's something I need to determine myself (whether the drive and time is worth the savings...).
Anyhow, I'm not good with "Sharpen your pencil etc." kinda of comment... Knowing me I'll probably fumble over my words 3 or 4 times before I get that statement out and completely convince the salesperson that he can get over on me.
So, I guess the best thing to do is swallow the information that I've got rather then embarassing the (lying) salesperson and be on my way. Unfortunately, so far that action has gotten me to this point: end of my lease with nothing to drive!! (thank heavens for lease extensions).
Thanks Dino!!!
Just search this and other smart shopper discussions for postings by bobst. I found his method to be the best for people who have trouble "wheeling and dealing".
2019 Kia Soul+, 2015 Mustang GT, 2013 Ford F-150, 2000 Chrysler Sebring convertible
What city are you in? Sounds like there are a small number of dealers and the local market is pretty tight, so your only options are to buy local or decide how far you'd go to save some money.
And good advice from a previous post, use the infamous patented super duper can't miss Bobst method. Which is simply to determine what you think the vehicle is worth to you, add tax, tag, title, and dealer fees for an out the door price and then offer that, and stick to it. If I misquoted the Bobst method, so sorry Bobst, please correct me, LOL.
Maradag, Bobst is kind of a legend around here.....
I guess some people like negotiating, but I don't.
tidester, host
SUVs and Smart Shopper
Personally I wouldn't do it. Negotiating online would take some time. Plus the dealership may not think you are serious. I prefer to look face to face with the person I am negotiating with, its faster and there is a lot of non verbal communication that can help out.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Four years ago, when I bought my new car, I dealt with my issues by internet. Put inquiries, got responses, talked over the phone, got detailed fax quotes from three different dealers and bought it next weekend with a decent trade offer. Granted, Subaru is a low-volume brand in Florida, so every inquiry was probably handled quite attentively. The dealers are also more of low-pressure nice-guys types with upscale twist (half of them are parts of multibrand luxury dealers) than high-pressure high-volume dealers. The latter tend to ignore the internet inquiries. I'm afraid you may need to drive 40-100 miles to save some decent amount. Or - be ready to do so. If you are persuasive to get a written quote from a guy 50 miles away, the guy near you may be more cooperative.
Lets be honest about one more thing - the lease also puts you in a disadvantage. They tend to be more complicated, less transparent, thus more open to abusive practices. If you don't know for sure what you are doing, a 60-month loan on a cheaper car may be a better way to go. There are decent safe cars the size you want out there for low 20s, you know. Moreover, after 3 years of similar payments you'll be already owning something rather than in need of doing the same excersize again (and frustration). After another 3 year, assuming you stick to it, you'll have some money in the pocket and whole lot more leverage to buy another vehicle - perhaps this time something in low 30s. Just a suggestion for a consideration.
2018 430i Gran Coupe
It's a bit long but you can skip down to the "Purchasing Power" section to get straight to the discussion about negotiating a car purchase. A lot of the ideas I've read here are reflected in the article.
Enjoy!
tidester, host
SUVs and Smart Shopper
the internet is a great place to get a price quote to see if you and the dealer are on the same sheet of music. Once you have established that it's time to get face to face and see if you can strike a deal.
Since I'm a cash buyer for everything other than houses I'm going to admit my ignorance about this.
I don't understand why a request for a loan lowers your credit rating. Maybe mine is well over 800 because I've never asked for a credit check. The only reason I know mine is because a few years ago when I refinanced (that's a whole discussion in itself and is way off topic here), I got a 4 1/2 % loan (they were giving money away then for about a week so I took it) and the mortgage broker told me my score.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Do you tell the customer that you're going to do a credit check? I keep hearing that the multiple credit checks from shopping does lower the score. So the customer needs to know it's being done and agree you're close enough in the deal to do so.
2014 Malibu 2LT, 2015 Cruze 2LT,
I've come to know this because I keep hearing it but my question is WHY does it happen. Could it be that if you're asking for credit, those that give this credit see repeated requests as you getting close to you're limit of being able to pay for items purchased via credit.
I'm beginning to think that this is the reason but I'm not totally convinced of my theory.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Now if in a 30 day period you have your credit pulled multiple times by multiple industrys then it will affect it.
Jmonroe the reason it lowers it is because to the scoring matrix it looks as though you are attempting to take on additional debt.
Thanks. That's what I was theorizing.
Now I'm going to go have mine checked at a couple different types of places. There is no sense in having an excellent credit score (those are the words my mortgage broker used) if I can't use it.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
Hey, just shoot me your SSN and your full name. I will have you in the 590's by weeks end
Spoken like a true F&I guy.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
It makes difference only in marginal situations, when score is just above some cutoff point of tiers used by the lender.
2018 430i Gran Coupe
Because it is a sign that you are shopping around for credit. 5 inquiries could mean you will take out 5 loans and take on a huge amount of debt.
But credit bureau generally treat multiple inquiries within a short period of time as one.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
Jmonroe, this will help clear it up.
link title
Thanks again Joel.
There is nothing like another source for verification.
jmonroe
'15 Genesis V8 with Ultimate Package and '18 Legacy Limited 6 cyl
You could try to get a better price from another dealer, but I would go there in person and be ready to buy if the price is right.
2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D
The bottom line still comes down to doing your research so you know and act upon a good deal when presented. If it's not a good deal, then that's another thing.
MSRP 36,000
Invoice 32,500
Holdback 1,000
Offers 33,200 for most dealers
32,200 from the one dealer that's offered the best price so far (and they will throw in a rear DVD player worth about 550 according to them)
Any thoughts??
I might have missed the name of the vehicle so I don't know about incentives, demand, etc. but can you really complain about getting a car for under invoice? Beware of other fees, however.
I'm not saying those killer deals have never happened and those who post in Edmunds are more likely to get them, but they probably happened less frequently than claimed - much less frequently.
If there are some incentives/marketing support/volume bonus deals available to the dealers, they may be willing to lower the price - if not I think you are getting quite a deal here.
2018 430i Gran Coupe
Based on what you have read, you should determine an out-the-door price you are willing to pay. Then go to a dealer and see if they will accept your price.
That is what we did. In 1995, I assumed we would have to pay about $200 over invoice for an Accord. However, one guy in the Prices Paid forum said he got one for $500 under invoice. We went to dealer, offered that price, and they accepted.
There is no harm in making a low offer and having it refused.
Honda dealers and customers are notorious for "hiding" the "other" parts of their deal so it appears to be under invoice. It is easier in some states, as they don't cap dealers' fees, so $499-699 fees are not uncommon (think SE of US).
My guess is because of many domestic brands having huge cashbacks creates pressure for illusion of buying under invoice even if it's not real. So they respond with those gimmicks and the customers buy into that illusion so they can claim under invoice deals, too so their neighbor in a Tahoe shuts up.
2018 430i Gran Coupe
That's my thinking as well. Though many salesmen here contend you lose credibility with "lowball" offers. $500 under invoice is reasonable though, as it is merely a reduction of holdback.
It's like a Great White Shark swimming in a pool of flipperless sea lions... to irresistible to pass up.
Please make sure its $10K+ so I can notify the IRS and tell them the whole transaction seemed suspicious