Financing a new car

coconuts

Hi,

I've been shopping around for a while for a new 2019 VW Atlas SEL Premium to get a best deal possible. As I educated myself, I've been negotiating prices via email. So I negotiated a good price I believe and asked for a signed purchase order which the dealer has emailed me. I haven't mentioned whether it's cash, finance or lease, said we'll get there once we agree on the selling price.
We thought we might finance it as we plan on keeping it (at the beginning we wanted to lease).
So after getting the buyers order I said we'll finance it. We wanted VW Credit 1.9%. We have good credit score of 750+. The dealer is participating with VW Credit, but said "That price does not qualify with the 1.9%" and "you can not get that price with the 1.9%". They stated we need to finance it with banks approved by them and offered 4.99% for 60mo or 5.19% for 72mo. We also have a better deal from our own bank. I understand they now want to make up for the deal they gave us.
It is my first time shopping for a new car and I have no idea - is this even legal? Can a dealer deny you financing you choose? So can a dealer deny the sale if we won't agree to the higher %?

Any input would be greatly appreciated!
TIA.

kyfdx

coconuts said:

Hi,

I've been shopping around for a while for a new 2019 VW Atlas SEL Premium to get a best deal possible. As I educated myself, I've been negotiating prices via email. So I negotiated a good price I believe and asked for a signed purchase order which the dealer has emailed me. I haven't mentioned whether it's cash, finance or lease, said we'll get there once we agree on the selling price.
We thought we might finance it as we plan on keeping it (at the beginning we wanted to lease).
So after getting the buyers order I said we'll finance it. We wanted VW Credit 1.9%. We have good credit score of 750+. The dealer is participating with VW Credit, but said "That price does not qualify with the 1.9%" and "you can not get that price with the 1.9%". They stated we need to finance it with banks approved by them and offered 4.99% for 60mo or 5.19% for 72mo. We also have a better deal from our own bank. I understand they now want to make up for the deal they gave us.
It is my first time shopping for a new car and I have no idea - is this even legal? Can a dealer deny you financing you choose? So can a dealer deny the sale if we won't agree to the higher %?

Any input would be greatly appreciated!
TIA.

It's entirely possible that the dealer gets a bigger incentive with 3rd party financing.
To be technical, the dealer isn't denying you the low rate financing, just saying you can't get it at the price they quoted.

What is your location?

coconuts

My location 07026, the dealer is in different state.
Would you be so kind to explain to me why can't I get it at the price they quoted? VW Credit allows it at this price.
Thank you!

kyfdx

coconuts said:

My location 07026, the dealer is in different state.
Would you be so kind to explain to me why can't I get it at the price they quoted? VW Credit allows it at this price.
Thank you!

VW Credit doesn't have anything to do with a price offer from a dealer. You got a quote, with incomplete information (buy, lease, finance?). A dealer will naturally quote you the lowest price they can. Even if that involves less than optimal financing. It happens all the time.

On some makes/models, it wouldn't make any difference. But, VW has widely varying incentives on buy vs. lease. What state is the dealer's location?

coconuts

kyfdx said:

coconuts said:

My location 07026, the dealer is in different state.
Would you be so kind to explain to me why can't I get it at the price they quoted? VW Credit allows it at this price.
Thank you!

VW Credit doesn't have anything to do with a price offer from a dealer. You got a quote, with incomplete information (buy, lease, finance?). A dealer will naturally quote you the lowest price they can. Even if that involves less than optimal financing. It happens all the time.

On some makes/models, it wouldn't make any difference. But, VW has widely varying incentives on buy vs. lease. What state is the dealer's location?

Seems like I totally don't get shopping for a new car Everywhere I read about negotiating was said not to bring out the information whether it's lease, finance or cash until we agree on the selling price. Also, that a buyer should have their own financing so the dealer won't take advantage of them in the F&I. Which I have too, and it's better than the dealer's offer.

The dealer location is 19003.

So what do I say? What do I do in such situation? Advice please...

kyfdx

coconuts said:

kyfdx said:

coconuts said:

My location 07026, the dealer is in different state.
Would you be so kind to explain to me why can't I get it at the price they quoted? VW Credit allows it at this price.
Thank you!

VW Credit doesn't have anything to do with a price offer from a dealer. You got a quote, with incomplete information (buy, lease, finance?). A dealer will naturally quote you the lowest price they can. Even if that involves less than optimal financing. It happens all the time.

On some makes/models, it wouldn't make any difference. But, VW has widely varying incentives on buy vs. lease. What state is the dealer's location?

Seems like I totally don't get shopping for a new car Everywhere I read about negotiating was said not to bring out the information whether it's lease, finance or cash until we agree on the selling price. Also, that a buyer should have their own financing so the dealer won't take advantage of them in the F&I. Which I have too, and it's better than the dealer's offer.

The dealer location is 19003.

So what do I say? What do I do in such situation? Advice please...

Back when leasing was new, and the earth was still cooling off from the big bang, things were simpler. The price was the price.

The advice about negotiating is still good, but if you don't have the inside poop on how the dealer's incentives change, based on buy, lease, etc, then you run into things that don't make sense. Don't feel alone, it happens to all of us.

If the dealer uses 3rd party financing, or you pay cash, they get $3250 from VW
On a lease, they get $2400
If you take the 1.90%, 60 month financing, they get $2000.

So, those are the deltas you are working with. Likely, they based their price on the $3250, plus making money on selling you financing. If you wan the low rate financing, I would expect the price to be $1250 higher.

Now, they still get the $3250 if you bring your own financing or pay cash, but then they don't get to markup the rate and make any extra money in the F&I office. Seems their price should still be good for either, but until you sign a deal, nothing is set in stone.

coconuts

kyfdx said:

coconuts said:

kyfdx said:

coconuts said:

My location 07026, the dealer is in different state.
Would you be so kind to explain to me why can't I get it at the price they quoted? VW Credit allows it at this price.
Thank you!

VW Credit doesn't have anything to do with a price offer from a dealer. You got a quote, with incomplete information (buy, lease, finance?). A dealer will naturally quote you the lowest price they can. Even if that involves less than optimal financing. It happens all the time.

On some makes/models, it wouldn't make any difference. But, VW has widely varying incentives on buy vs. lease. What state is the dealer's location?

Seems like I totally don't get shopping for a new car Everywhere I read about negotiating was said not to bring out the information whether it's lease, finance or cash until we agree on the selling price. Also, that a buyer should have their own financing so the dealer won't take advantage of them in the F&I. Which I have too, and it's better than the dealer's offer.

The dealer location is 19003.

So what do I say? What do I do in such situation? Advice please...

Back when leasing was new, and the earth was still cooling off from the big bang, things were simpler. The price was the price.

The advice about negotiating is still good, but if you don't have the inside poop on how the dealer's incentives change, based on buy, lease, etc, then you run into things that don't make sense. Don't feel alone, it happens to all of us.

If the dealer uses 3rd party financing, or you pay cash, they get $3250 from VW
On a lease, they get $2400
If you take the 1.90%, 60 month financing, they get $2000.

So, those are the deltas you are working with. Likely, they based their price on the $3250, plus making money on selling you financing. If you wan the low rate financing, I would expect the price to be $1250 higher.

Now, they still get the $3250 if you bring your own financing or pay cash, but then they don't get to markup the rate and make any extra money in the F&I office. Seems their price should still be good for either, but until you sign a deal, nothing is set in stone.

Wow, thank you! I had no idea about it.
As they say it has to be bank approved by them, it means my only option would be to let them make money on the financing and finance through them, I suppose...? Is this common? I seriously had no idea a dealer could dictate where should I get financing from...

Are you able to tell me what realistic MSRP discount on a new 2019 VW Atlas SEL Premium is? I'm still in the dark here...

kyfdx

coconuts said:

kyfdx said:

coconuts said:

kyfdx said:

coconuts said:

My location 07026, the dealer is in different state.
Would you be so kind to explain to me why can't I get it at the price they quoted? VW Credit allows it at this price.
Thank you!

VW Credit doesn't have anything to do with a price offer from a dealer. You got a quote, with incomplete information (buy, lease, finance?). A dealer will naturally quote you the lowest price they can. Even if that involves less than optimal financing. It happens all the time.

On some makes/models, it wouldn't make any difference. But, VW has widely varying incentives on buy vs. lease. What state is the dealer's location?

Seems like I totally don't get shopping for a new car Everywhere I read about negotiating was said not to bring out the information whether it's lease, finance or cash until we agree on the selling price. Also, that a buyer should have their own financing so the dealer won't take advantage of them in the F&I. Which I have too, and it's better than the dealer's offer.

The dealer location is 19003.

So what do I say? What do I do in such situation? Advice please...

Back when leasing was new, and the earth was still cooling off from the big bang, things were simpler. The price was the price.

The advice about negotiating is still good, but if you don't have the inside poop on how the dealer's incentives change, based on buy, lease, etc, then you run into things that don't make sense. Don't feel alone, it happens to all of us.

If the dealer uses 3rd party financing, or you pay cash, they get $3250 from VW
On a lease, they get $2400
If you take the 1.90%, 60 month financing, they get $2000.

So, those are the deltas you are working with. Likely, they based their price on the $3250, plus making money on selling you financing. If you wan the low rate financing, I would expect the price to be $1250 higher.

Now, they still get the $3250 if you bring your own financing or pay cash, but then they don't get to markup the rate and make any extra money in the F&I office. Seems their price should still be good for either, but until you sign a deal, nothing is set in stone.

Wow, thank you! I had no idea about it.
As they say it has to be bank approved by them, it means my only option would be to let them make money on the financing and finance through them, I suppose...? Is this common? I seriously had no idea a dealer could dictate where should I get financing from...

Are you able to tell me what realistic MSRP discount on a new 2019 VW Atlas SEL Premium is? I'm still in the dark here...

We don't follow pricing, but you can access Edmunds price research, here:
https://www.edmunds.com/tmv.html

I would shop more dealers.