Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/25 for details.
A reporter would like to speak with you about your experience; please reach out to PR@Edmunds.com by 7/25 for details.
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Any Questions for a Car Dealer?
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Ed
I've been dreaming about that my entire life.
I'm going out and buying a new Saab today!!!!
If you became unable to pay the debt, wouldn't opt to sell the car rather than foreclose on the house?
Personally - and that means me - I don't see the need to risk a home in order to reap the tax savings on an auto loan. In my neighborhood, houses go for $400K - I'm not putting that on the line for a $25,000 Accord. I am lucky in the fact that my history has shown that I could pay off an equity line if I wanted to - not everyone does. It's just a personal value.
and I believe in using a home equity line of credit (or loan) for buying a car.
It's for those who can handle credit, of course.
And it has many advantages.
So what do they do - they refinance the mortgage to roll it up into one nice big payment.
It's a viable financing method - just not for everyone.
I'll have it paid off in under 3 years.
Like I said, it's for people who can handle credit. And understand it.
There are other advantages to opening and using a HELOC, as well (besides the tax deductibility of the interest).
Ford has one.
Maybe even Chrysler.
Ford & GM have expanded their plans to the point where huge numbers of folks are elegible to buy considerably below invoice. (By combining eligible "cash in lieu of 0.0%" and/or 'collge grad' incentives).
This is undoubtedly done to bolster their market share vs the non-Ford/GM imports. Frankly this does put considerable "distance" between many imports.
Word is they do this in part by cutting the "dealer holdback".
Although there are not many posts here about the programs, it seems clear that this can be a good way for a consumer to get at low hassel deal.
Is this a "limited time" thing that GM & Ford will eventually phase out?
Do dealers HATE these programs?
What about the stores for brands that don't have these -- is this something that MORE automakers should do?
X-plan prices are not below invoice but they are usually very close. A-plan prices are considerably below invoice. If someone is eligible for X-plan it provides an opportunity for a very easy, hassle-free deal. A dealership cannot "kink" the deal (with extra fees, etc.) because Ford will just kick it back until it is fixed to meet the program's requirements.
It is totally up to the dealerships discretion whether they will offer X-plan pricing and they may not want to on a very hot seller. X-plan also applies to current model year product so right now most remaining 2002 product will not qualify.
Generally, dealers don't mind doing these deals because they are compensated by Ford for doing them. However, it is also against Ford's rules to give away any of this compensation to make the deal more attractive than another Ford dealership's deal. In my neck of the woods this would result in severe consequences for a dealer caught trying to "sweeten" X or A-plan deals.
Going to a different dealer probably will not cut it. If you want to throw a curve ball past some loan officer you are better off obtaining a loan away from a dealership and just bring them the money and buy a car cleanly.
BTW, "spotting" is completely legal in many states and is common practice. Research it if you want to but it ain't your car legally and there is no official loan.
If you go elsewhere and start the whole process over again, chances are good they will want that information anyway.
As mentioned above, it provides for a 'hassle free' pricing structure. With Nissan (called VPP), the price is a small % below invoice, with a little tacked on for advertising and such. Basically washes out to invoice. With GM, pretty much the same pricing scenario (even with Saturn, which is about the only brand of GM I'm considering). Haven't looked into Ford, since they don't offer anything I'm terribly interested in this time around.
Now I've just got to decide which vehicle I want. Fortunately, I've got a month or so to figure it out.
Don't let a little hassle scare you from a car you like... It's all part of the loan process...
The weaker your credit or income, the more you're going to have to bring to the table (as far as proof) for financing.
Ed
The flip side of having excellent credit, though, is that dealers don't have as much room to make money on the back end, so they need to make their profit on the price of the car. So be it.
Here's a question for a car dealer:
Why couldn't I reach the final price on a car with the salesperson, then cut a deal with the F&I guy in which I agree that the dealer can write the loan at a higher interest rate than I could qualify for, and net themselves, say an extra $500 (provided there's no pre-payment penalty)? In return, they give me a reduced price on the car of $250. I then simply refi the loan at my CU at a very low rate, saving myself the $500. Net savings to me $250. Net increased gross to the dealer: $250. Would that work?
Besides, even dealers have to bring good clients to the table to get financed, so someone with good credit helps strengthen the lenders loan profile.
To tblazer503, how can a bank refuse to let a loan get paid off early unless there is a clause in the contract? What happens if the vehicle is traded or totalled? Does you friend, in the case of a total, get a big check and keep making payments.
Sounds a bit fishy to me.
TB
I can't believe how people gripe about car dealers who play dirty tricks on them, how sleazy they are, etc, then they seem so self-righteous about getting one over on the dealer.
double standard?
Ed
abtseller: "I can't believe how people gripe about car dealers who play dirty tricks on them, how sleazy they are, etc, then they seem so self-righteous about getting one over on the dealer. double standard?" You referring to me here? Where did I mention anything that amounted to "getting one over on the dealer"? I asked if it was feasible for a buyer to work with a dealer to their mutual advantage. If anything that would "get one over" on the lender, and as was pointed out a dealer would not want to do that either. OK - I got a reasonable answer that makes sense. What's your point?
brian: "Are you really that cheap? The dealer would be charged back and a relationship with a lender that probably yields...." Kinda a cheap shot, wouldn't you say? I ask a question, you wait for the answer to emerge, then accuse me of being cheap as if I knew it all along? I didn't know the answer - that's why I asked. How the hell would I know that moving profit from the front-end to the back-end is "stealing" from the salesman? Here's a news flash: Customers don't know or care about your commissions.
Part of the problem with peoples' attitudes toward car dealers is that the salespeople and F&I people know the answers to most of the detailed aspects of a car deal, and the buyers don't. You guys talk glibly and knowingly about stuff we never heard of, toss around the lingo like front-end vs back-end profits like they were taught to all of us in third grade, and snicker at the idiots who blunder into a high-gross deal. We I ask a question, you line up to drop your attitude on me like seagulls. Do you seriously wonder where grinders come from?
The inherent tone of your question implied that you were trying to pull a fast one. I apologize if I mistook your question.
Ed
Terry.
I guess I should have asked what prevents that sort of thing. It seemed to be an obvious way for the dealer and the buyer to work together, and I didn't understand why it wouldn't work. I failed to recognize how closely F&I works with lenders.
I said fine I will then use my peoplefirst.com check which was giving me 4.99%. First he tried to poke holes in it, but when he realized it was legit he asked for the opportunity to match it, I liked the guy so I said sure, what do I care who gets the loan payments. Plus I liked the idea of having a local bank. He made a copy of my letter to get a match rate.
Question is, how is the dealership compensated? % of loan balance, flat fee, fee plus commission on a higher interest rate.
I don't care how much dealer makes as long as I can get the best interest rate I can acquire.
Just curious.
Ed
If I had to accurately characterize my job I would say that I am a "business process analyst" (sort of a cross between an industrial engineer and a systems analyst, I suppose.) After 30 years of that I find that I am fascinated by business processes that seem to have holes in them, or don't make sense to me. So, I ask questions to learn why my perception isn't true. I've learned a ton here in TH, but sometimes it doesn't add up.
Ed
Rich
Part of the problem with peoples' attitudes toward car dealers is that the salespeople and F&I people know the answers to most of the detailed aspects of a car deal, and the buyers don't. You guys talk glibly and knowingly about stuff we never heard of, toss around the lingo like front-end vs back-end profits like they were taught to all of us in third grade, and snicker at the idiots who blunder into a high-gross deal. We I ask a question, you line up to drop your attitude on me like seagulls. Do you seriously wonder where grinders come from?
As much as I respect many of the car sales pros here, Al did not deserve those comments. I appreciate the insiders viewpoint but how 'bout cutting us civilians some slack? At least take it out on those who treat you abusively.
It's natural to wonder where Edmund's and KBB and other Internet sites get their invoice info. It's quite complete and detailed. The most obvious explanation would be, they get it from the manufacturers. Of course, if that were true, it would easy to wonder how accurate the invoice info is - - after all, what incentive would the manufacturers have to publish it? Unless, of course, they inflated the numbers to make consumers think they were getting a better bargain than we really are.
When I first started visiting these forums, I emailed Edmunds to ask them where they obtained the information, and they declined to say. That got me wondering: If not from the manufacturers, then who?
The banks may or may not know holdbacks and other things, but they probably get really close on the costs of the "hardware"
FWIW,
TB
Other websites get their info directly from mfr's or from those who need to know, like banks and credit unions.
It's been my impression that the history of consumers obtaining invoice pricing came from banks who offered that info to their best customers in order to obtain their business. It then trickled down to consumers and exploded with the internet. I remember when you had to buy publications from Edmunds or Pace or even KBB to get invoice prices, or go to your local library to see a copy of KBB. Now the info is everywhere.