" didn't like the Dateline story. If a person is so naive that they don't know that a 10.49% interest rate is high, what can we do about it? It's not the dealers fault she didn't spend 10 minutes checking current interest rates."
So I guess the opposite of what you are saying is that its ok to gouge someone just because they are uneducated? So if the dealer said 25%, then thats ok too?
"People need to learn how to question everything, but questioning gets in the way of our impulsive purchase. We want things NOW NOW NOW. Questioning or researching doesn't get us into the car any quicker. With attitudes like that, we are buying with our emotions and not our heads. No wonder millions of people pay more than they need to."
"So I guess the opposite of what you are saying is that its ok to gouge someone just because they are uneducated?"
What's the difference, really? I'll make a jewelry store comparison - did you know that the average women's ring, bracelet, diamond earrings in a Zales or Gordons store has a 400-500% markup?
I've bought items from these stores, as I'm sure most of you have. I don't anymore, simply because of the true raping we consumers get - I still can't get over the fact that people cry if they have to pay %5 over invoice on a car, or 2% above the prime rate on a loan, but they roll over and play dead on just about EVERY OTHER consumer product they buy.
I have always purchased cars with cash, but am interested in leasing and want to learn more. I understand the basic idea behind leasing, but want to understand a few details. 1) What’s the most common lease term? 36 months? 2) I assume sales tax is paid with each lease payment, not upfront. Correct? 3) I assume I pay registration, title, and license upfront. These are usually not included in the lease. Correct? 4) Are there any fees associated with getting a lease, say an acquisition fee? If so, about how much should I expect to pay? And do I pay these upfront or are they rolled into the lease payments? 5) I assume I pay a down payment. What’s a typical down payment percentage? 6) I have heard there might be a security deposit. Is that so? About how much is the security deposit? 7) I have heard there might be a disposition fee at the end of the lease. Is that so? About how much is it? Do people really pay this fee or do they get it waived? 8) I assume there’s an excess mileage charge at the end of the lease if I go over the mileage cap. I’ve heard it’s 15 cents a mile. Is that correct? Do people really pay this or do they get it waived?
I have always purchased cars with cash, but am interested in financing and want to learn more. I understand the basic idea behind financing, but want to understand a few details. 1) I assume I pay sales tax, registration, title, and license upfront. These are usually not included in the loan. Correct? 2) Are there any fees associated with getting a loan, say an acquisition fee? If so, about how much should I expect to pay? And do I pay these upfront or are they rolled into the loan payments? 3) I assume I pay a down payment. What’s a typical down payment percentage?
I know next to nothing about leasing, but I have financed a few times
1. Tax, title, etc. can be rolled into the loan if you want (most of the time) but be sure to ask if these are included or not and be crystal clear about the answer. Here in Missouri, we're on our own about taxes etc. So I've never financed more than the balance of the car. I paid for the taxes, registration, etc. out of pocket.
2. There are no fees associated with financing (usually). My bank charges a small fee of ~$30 if I want to finance through them, but YMMV.
3. These days you only have to make a down payment if your credit rating (FICO score) is below a certain level (F&I guys could tell you more about this). A good rule of thumb is to put 10-20% down to keep from being upside-down on the loan, but it's not necessarily a requirement. I've never been required to put money down on a loan to get approved...that doesn't mean I haven't done it though.
specific topics on "Financing a Car" and "Questions About Leasing" over in the Finance, Warranty and Insurance message board that may help and get a bunch of info.
If the dealer is making a pretty good profit at 8%, why go to 10.49%? The only way I can explain that is greed. Sure the dealer has to make a profit, but being greedy at the expense of the uneducated is slimy IMHO.
You bring up a good point with the jewelry stores. i do not shop at them often so I cannot say with certainty, but I think the difference is that the price is the price there, you cannot negotiate. Maybe you can, I am not sure. But unless they are having a sale, there is no discount. They mark up so much so they can have 70% off sales. even as little as I shop at jewlery stores I would never buy anything unless it was at least 70% off.
I don't think consumers roll over and play dead, given a choice. And thats the key. Car sales has decided that it likes a negotiation system. because of this, people expect to pay close to invocie to buy a car. Most other retail has a model of no negotiation, but msrp and sale prices. I can shop all I want for the latest gadget, but if only 2 or 3 stores have it, then I am forced to pay their price. Most industries have narrowed down to 2 or 3 big players. These players check each others prices constantly so the prices are pretty close. Haven't you ever noticed in the sale papers that the same items at competing stores are strangely similar in price? If home depot is selling it at 50% mark up why should lowes offer it any lower? i can only buy it at one or the other, they have a 50-50 chance at my business.
I do not chose to overpay, but if I need or want the item, I have to pay what the store has it offered for. if I need a new toilet, lowes or home depot will probably have the lowest prices in my area. If I feel the price is too high, I have two choices. Suck it up and pay the 50% mark up to one of them, or I can get in my car and drive to the nearest public bathroom, everytime I have to go. With items that you want, but do not need you have a little more flexibility. You can postpone buying them until there is a sale or a price drop. Just like I did recently with the replay tv I just bought.
"If the dealer is making a pretty good profit at 8%, why go to 10.49%?"
Because they can and it keeps their business profitable. Let's say JC Penney pays $15 per pair for Levis 501 jeans. They regularly sell them for $39.99. They COULD sell them for $25 and still make a profit, but they don't, because they don't have to.
It's far from correct to say that a car dealer makes 2.5% on every captive finance contract - I averaged more like .5%...the 2 and 3 point markups were few and far between.
Facts of the situation: my son (in a different state) wants to buy a used car. I will finance $x and he will put up $y. My part will come from a check cut from my credit union which will be made payable to the car dealership.
I talked to a salesperson at the dealership and was told they don't necessarily do business this way. (This is where it gets real murky.) They will accept the CU check eventually, but will first want to do something called an "option contract". As I understand it, this gets the car in my son's hands a lot quicker, but she totally lost me with finance charges and all the other details associated with the option contract. Doing this over the phone added to the uncertainty. Long story short, I told my son to leave and not sign anything. He (and we) may go back there, but we found out we needed to do some homework...
The thing is, I've never heard of an option contract, nor do I know how it works. I have a suspicion the salesperson didn't want to wait for my CU check to be cut and sent and just wanted to consummate the deal stat.
Can someone explain what the dealer was trying to do? I felt like an idiot talking to the rep.
an "option contract", but I think what they're doing is delivering the car without chasing the money - I would NEVER allow a car to be delivered knowing we wouldn't get paid for several days or a week, or whenever your credit union gets around to it.
I've done a contract at a normal rate and term, with no penalty for early repayment, so the car can be delivered - the interest costs are close to nothing for letting that contract live for a week or two, then you pay off that contract with your pre-arranged method of financing.
Protects the dealership, gets them their money - most of the time we'd cover whatever interest charges there were.
Facts of the situation: my son (in a different state) wants to buy a used car. I will finance $x and he will put up $y. My part will come from a check cut from my credit union which will be made payable to the car dealership.
I talked to a salesperson at the dealership and was told they don't necessarily do business this way. (This is where it gets real murky.) They will accept the CU check eventually, but will first want to do something called an "option contract". As I understand it, this gets the car in my son's hands a lot quicker, but she totally lost me with finance charges and all the other details associated with the option contract. Doing this over the phone added to the uncertainty. Long story short, I told my son to leave and not sign anything. He (and we) may go back there, but we found out we needed to do some homework...
The thing is, I've never heard of an option contract, nor do I know how it works. I have a suspicion the salesperson didn't want to wait for my CU check to be cut and sent and just wanted to consummate the deal stat.
Can someone explain what the dealer was trying to do? I felt like an idiot talking to the rep.
...... >>But unless they are having a sale, there is no discount. They mark up so much so they can have 70% off sales. even as little as I shop at jewelry stores I would never buy anything unless it was at least 70% off<< ..
Just some food for thought ..
A certain Movado watch: $900
Cost: $225
70% off: $630
______________
You pay: $270
That's If, you can find one for 70% off, and If they are using original MSRP, and If they are a huge jewelry dealer ..
That sounds logical. So they're basically lending him my share of the cost until my CU check comes to them. Would they normally lend it him, or to me? And I can see how the interest would be negligible especially if the CU check gets there in a matter of days.
But, since it's the Christmas season, I've been to the Mall jewelry stores and know that the markup is huge. Whenever you go into the luxury market (as I stipulate fine jewelry and watches), you should expect the hig markup.
The way I view it, you aren't paying for a rock that has been buried underground for milleniums, you are paying for quality that is hard to reproduce. Of course, you can get "cheap" diamonds (and they look it), or you can step up to Tiffany and get the best.
Using watches as another example, a Seiko will keep the same time as Terry's Movado. You are paying for quality and style with the Movado, though (and a certain amount of "panache").
As a side note, don't tell my woman, but I buy her jewelry and my watches at Costco. Not nearly as much mark-up and all high quality (not some of the "junkier" stuff you get at Zales). All the woman sees is the "real sparkly" things on her ears, fingers, neck. She has no idea where they came from. If she's with me, I make certain we look at Tiffany (kind of dishonest, since she now thinks that's where I shop for her "trinkets").
Terry, I don't know if you you are aware, but you can also buy Tags, Baums and Movados at Costco, too.
..... Actually the Movado was a bad example .. I should have used the Seiko, more in line with the "corner stone" pricing ....
That being said, do you think I purchase my stuff at Cartier or Neiman Marcus ..? .. ahhh I don't think so, next time your at Costco look around you, that's probably me in lane 6 ......
I love all the analogies between new car sales vs. RE sales, jewelry, PCs, TVs, milk, and the like...
a. Of course you can negotiate at a jewelry store, at a mall or anywhere else. The sale price is the starting point and I've often dropped the actual price a good 15-25% below that. Try the day after Xmas or the week after that. Heck, try any weekday when you're the only potential buyer that day.
b. Set stones are almost impossible to shop effectively because each one is different. Not much leverage when The Significant Other is clutching your shoulder in a death grip under the belief "There's-Not-Another-Like-THAT-One-in-the-Known-Universe-and-if-i- ts-Not-Here-After-You-Check-a-Dozen-More-Stores-Somebody-Will-Be-- in-Deep-XXXX!"
Unlike new cars where her request is, "I want the same payment, black inside and out, with Nav - you figure out the rest."
c. Watches, as a manufactured, widely-distributed item, are a different story and I've bought several after shopping them on the net. Your choice usually comes down to authorized or grey market sellers without warranties; you pays yer money and takes yer risks. At the authorized sellers, watch manufacturers seem to have that market firmly in Price Control Land - and if that authorized dealer is caught selling below other such dealers, they can easily become grey market sellers in short order.
Now, about PCs with their 5-8% margins...or milk, now there's a great analogy...
Butch is absolutely right. Once you drive it off the lot you bought it. Doesn't mean though I wouldn't take it back to see what they would be willing to do for me. You never know.
I have negotiated at Sears and other MAll stores, but only in the electronics parts (this includes Circuit City and Best Buy). I've even had some success negotiating jewelry purchases at the Mall jewelry stores.
Forget doing any negotiation on the shirt on the the front table, though...ain't gonna happen (I've tried).
I did try to negotiated with Costco on a computer that was a display (last one). They didn't budge from the price as marked...saying if it didn't sell, they'd send it back to the manufacturer and get all their money back. I would imagine, because of the amount of goods they push through there, that they have negotiated some very good terms with those that provide product to them.
Terry, as a matter of fact, I did think you only shopped at Cartier. Hopefully, you have a hat on with a hood pulled over your head when shopping at Costco. Don't want anyone to think you would stoop so low...;-)
..... >>Hopefully, you have a hat on with a hood pulled over your head when shopping at Costco. Don't want anyone to think you would stoop so low...;-)<< ...
Hey now, don't be knocking my boys at Costco .. I found a set of 6 Super steak knives in that place that were unbelievable, custom made in Brazil, serrated edges, teak wood handles, chrome 316L ends ... like my friend Crockadile Dundee would say ~ "Now that's a knife" you could cut your way out of a Abrhams Tank ...
Now, slipping it under my hooded sweat shirt so I wouldn't get caught was the hard part ....... ;^}
The deal is that costco usually has nicer items, at least in my area. Thats why you pay a little more. And your not supporting the evil walmart empire that is going to destroy not only the US economy, but the world economy to boot....but I digress. Trying to stay on topic, has anyone successfully used any of the warehouse car shopping services? I called about an infiniti once and they said there was not a certified dealer in my area and they would have to have a specialist that deals with luxury brands call me. I live in a major metro area. He never called.
But Costco has higher pricepoints than TJ Maxx, JC Penney's, etc. And other retailers don't charge me $45 to spend money with them. (In all fairness, I wouldn't pay the $35 for Sam's Club except that I get it for no charge.)
As for the "evil" empire comment, well... how much more would we all be spending on consumer goods due to inefficiencies in distribution if WalMart wasn't around?
Or how much more would we be spending on airfares if Southwest Airlines did not come along? It USED to cost $560 to fly last minute Cleveland - St. Louis RT as little as 10 years ago. Now it is about $170 - ten years later.
What's going to happen when one of the efficient auto producers (i.e. Honda, Toyota, etc.) decides to sacrifice profitability for a couple of years in order to grab a nice chunk of market share?
Or when WalMart decides to get into the car business??? That would be V-E-R-Y interesting.
you ask.." when WalMart decides to get into the car business??? That would be V-E-R-Y interesting. "
Well, they already tried. In a few markets they put cars on their parking lots, posted "everyday low prices" in the windows, got salespeople, etc... the local dealers around them ate them alive and they decided they didnt want to be car dealers anymore....Walmart might be able to run mom and pop off main street but they never tangled with car dealers before.
I bought two new cars in the past month in Texas. I negotiated the price of each without TT&L, then added it when I wrote the check.
I was not surprised to find the (maximum allowable in Texas) $50 document fee. I paid that.
I was surprised to find them trying to charge me "Dealer's Inventory Tax". My question: why do they think I should pay this tax? Isn't it like taxing me twice?
For the 2003 Expedition, I objected to the tax, and they took it off without a problem. (I was paying invoice minus $4,000 rebate minus $2,600 for the 6,700 demo miles.)
For the 2004 Sienna, for which the deal had a little more padding for the dealer (5% over Edmund's invoice), they told me they had to charge it, but they reduced the car price by the $63.50 Dealer's Inventory Tax, then charged it back to me at $63.37 on the space provided.
What gives?
Next time I buy cars (in ten years or so) I will negotiate the OTD price.
Of course, that is exactly what people said in the Columbia/ Jefferson City, MO area when Walmart announced that they were going to sell groceries in a Supercenter format in 1990.
One St. Louis grocery exec was quoted, "they'll never get people to shop THERE for groceries."
it's a Texas state tax on all new vehicle sales, sorry. Dealers have to collect it from you, or they're in violation of the tax laws. They get nothing from it, except the honor of handling and processing yet another state fee.
My brother bought a 2003 Jeep Liberty at Costco to pull behind his 34 ft. Motorhome. I don't know the exact numbers but he felt really happy with the sale. The sale was negotiated at a dealer that was out of state but not too far away.
Apparently, dealers agree to a minimum selling price and that's who the buyer is connected with.
My brother and his wife were completely satisfied with the purchase.
M.
2010 Land Rover LR4, 2013 Honda CR-V, 2009 Bentley GTC, 1990 MB 500SL, 2001 MB S500, 2007 Lincoln TC, 1964 RR Silver Cloud III, 1995 MB E320 Cab., 2015 Prevost Liberty Coach
Last year went shopping for wife's Lexus 300. There's only two dealers in the area both owned by same group. Went in and salesman would only budge ~1500 off sticker. Called costco's auto services division and located an out of town dealer willing to give me ~3400 off sticker for same car. Although salesman not pleased with this info after i produced invoice got the price I was willing to pay. Keep in mind this tactic is only valid if you are willing to go get the car if offer is refused. I can pretty much negotiate any deal but it is pretty hard in a captive market.
I am a rabid consumer rights, lowest cost kinda guy. But even I know that there is a limit. Sometimes the end does not justify the means. Walmart is destoying wages and competitiveness at an alarming rate in the US and abroad. That 27" TV may only cost you $99, but what use is that if you are making only making $7/hr and walmart is the only place that you can buy it at?
I never gave it much thought either until a friend showed me some websites that deal with this issue. You would be amazed.
I don't know if I am anti-walmart....but one reason why they failed in retail car sales is there is no supplier to dictate terms...As we know, walmart often demands its suppliers to meet its price points and if they dont, they lose the contract. Since there is no supplier for used cars to dictate terms to, they were left to buy cars just like every other dealer on the open market at current market prices. They had no lower cost structure. Partly the reason they reason it failed. I won't even get into the one pricing theory they used...
I've tried to buy a car through the buying services of both costco and sams with no luck. Only reason being, there was never any sort of agreement between Sams/Costco and the dealer/brand I was trying to buy.
In general, I think they forge some sort of arrangement with brands/dealers who have "middle of the road" cars and not the more lux or esoteric cars/brands I tend to buy. Wanna Chevy, they can help. Wanna buy an Audi, fuggeddaboudit.
Having memberships at both Sams and Costco, in general, Costco has more upscale goods.
For example, using our watches example, ou can find the Tags, Movados and Baums at Costco....at discounted prices that the jewelry stores aren't able to match. Can't find those at Sams.
If it wasn't obvious, I love fine watches. Some think I'm a bit "off" as any watch these days keeps good time. I just like the feel and style of a good watch and shop for them regularly.
These programs are supposted to be a big benefit to the customer. Representives form the "club" sit down with our managers and work out pricing.
It's designed to be a hassle free way to buy a car. The price is already set. Give the customer a "quote" and they should be happy, right?
Except it doesn't work that way.
Most of the time the customer will take that quote and go shop it. They might save another 100.00 elsewhere. Then when the "club store" calls them to follow up they will tell them they have a lousy program.
" Your program is no big deal...I took your price and shopped it and I bought it for less"
We dropped our affilation with these people and with the thousands of dollars we now save we can pass that along.
I love it when someone asks if I can beat a "club store" price!
Nah - not difficult, kinda fun, and it has nothing to do with life being too short.
You guys get upset with someone grinding the last couple hundred off MSRP and then complain that the same buyer won't bother to dicker with Best Buy over a $200 TV or the jewelry store at the mall on buying a watch. And, apparently, neither will you.
Shouldn't complain if you're too lazy to do it yourself.. but hey, that's your choice; on a Timex, sure, who cares.
An example...and it follows some posts above.
I also love watches and want to buy a Movado that stickers for $1095. Actually I want my wife to buy it for me since its been 20 years since she bought me a Concord and I have explained to her, many times over, that the second such gift is very overdue.
We went to the mall last night and walked into one chain type jewelry store; there's My Watch, calling my name. Ok, sir, how much? "Well, it's marked $1095 but I think we can do 15% so your price is...$930 plus tax." That the best you can do? "Well, I think the manager can authorize 20% - but he's on break and will be back in about 15 minutes." - Ok, thanks.
Next jewelry store, about 100 feet away - same watch, same conversation. "$919." How did you do that so fast? "Well, see, there's a code number on the tag that says 919." Oh - are you sure it isn't $616 and you're reading it upside down? Hahaha...that didn't work... so now we're down to somewhere between $919 and the be-back-manager's-possible $876. I mention to the manager at store #2 that store #1 will let it go for that $876 in a few minutes when his fellow manager finishes his smoke..."oh, we can beat that - no one sells this model as cheap as we can...except Costco."
Hmmm, Costco....
He continues..."Yup, Costco offers refurbished Movados...they sell this model for around $650 and I called the factory rep today to complain that they are not informing the public that their Movados are used."
Costco sells medium-price, used watches as new? Wow, where do they buy all those used Movados...pawnshops across the country?...some guy selling out of his trunk? Special deal with the Movado Second Hand Store?
Mall sales people are almost as much fun as auto sales people. This guy took a sure $850-$875 deal and turned it into a dead deal in less than 10 seconds.
Anyway, so much for mall grinding. Gives me something to do when my wife is looking at candles.
Yup, and I will check Costco down the street during a weekday when I can find parking.
Comments
So I guess the opposite of what you are saying is that its ok to gouge someone just because they are uneducated? So if the dealer said 25%, then thats ok too?
"People need to learn how to question everything, but questioning gets in the way of our impulsive purchase. We want things NOW NOW NOW. Questioning or researching doesn't get us into the car any quicker. With attitudes like that, we are buying with our emotions and not our heads. No wonder millions of people pay more than they need to."
I agree 100%. Very well put.
What's the difference, really? I'll make a jewelry store comparison - did you know that the average women's ring, bracelet, diamond earrings in a Zales or Gordons store has a 400-500% markup?
I've bought items from these stores, as I'm sure most of you have. I don't anymore, simply because of the true raping we consumers get - I still can't get over the fact that people cry if they have to pay %5 over invoice on a car, or 2% above the prime rate on a loan, but they roll over and play dead on just about EVERY OTHER consumer product they buy.
Makes no sense to me.
1) What’s the most common lease term? 36 months?
2) I assume sales tax is paid with each lease payment, not upfront. Correct?
3) I assume I pay registration, title, and license upfront. These are usually not included in the lease. Correct?
4) Are there any fees associated with getting a lease, say an acquisition fee? If so, about how much should I expect to pay? And do I pay these upfront or are they rolled into the lease payments?
5) I assume I pay a down payment. What’s a typical down payment percentage?
6) I have heard there might be a security deposit. Is that so? About how much is the security deposit?
7) I have heard there might be a disposition fee at the end of the lease. Is that so? About how much is it? Do people really pay this fee or do they get it waived?
8) I assume there’s an excess mileage charge at the end of the lease if I go over the mileage cap. I’ve heard it’s 15 cents a mile. Is that correct? Do people really pay this or do they get it waived?
1) I assume I pay sales tax, registration, title, and license upfront. These are usually not included in the loan. Correct?
2) Are there any fees associated with getting a loan, say an acquisition fee? If so, about how much should I expect to pay? And do I pay these upfront or are they rolled into the loan payments?
3) I assume I pay a down payment. What’s a typical down payment percentage?
1. Tax, title, etc. can be rolled into the loan if you want (most of the time) but be sure to ask if these are included or not and be crystal clear about the answer. Here in Missouri, we're on our own about taxes etc. So I've never financed more than the balance of the car. I paid for the taxes, registration, etc. out of pocket.
2. There are no fees associated with financing (usually). My bank charges a small fee of ~$30 if I want to finance through them, but YMMV.
3. These days you only have to make a down payment if your credit rating (FICO score) is below a certain level (F&I guys could tell you more about this). A good rule of thumb is to put 10-20% down to keep from being upside-down on the loan, but it's not necessarily a requirement. I've never been required to put money down on a loan to get approved...that doesn't mean I haven't done it though.
Hope this helps.
If the dealer is making a pretty good profit at 8%, why go to 10.49%? The only way I can explain that is greed. Sure the dealer has to make a profit, but being greedy at the expense of the uneducated is slimy IMHO.
You bring up a good point with the jewelry stores. i do not shop at them often so I cannot say with certainty, but I think the difference is that the price is the price there, you cannot negotiate. Maybe you can, I am not sure. But unless they are having a sale, there is no discount. They mark up so much so they can have 70% off sales. even as little as I shop at jewlery stores I would never buy anything unless it was at least 70% off.
I don't think consumers roll over and play dead, given a choice. And thats the key. Car sales has decided that it likes a negotiation system. because of this, people expect to pay close to invocie to buy a car. Most other retail has a model of no negotiation, but msrp and sale prices. I can shop all I want for the latest gadget, but if only 2 or 3 stores have it, then I am forced to pay their price. Most industries have narrowed down to 2 or 3 big players. These players check each others prices constantly so the prices are pretty close. Haven't you ever noticed in the sale papers that the same items at competing stores are strangely similar in price? If home depot is selling it at 50% mark up why should lowes offer it any lower? i can only buy it at one or the other, they have a 50-50 chance at my business.
I do not chose to overpay, but if I need or want the item, I have to pay what the store has it offered for. if I need a new toilet, lowes or home depot will probably have the lowest prices in my area. If I feel the price is too high, I have two choices. Suck it up and pay the 50% mark up to one of them, or I can get in my car and drive to the nearest public bathroom, everytime I have to go. With items that you want, but do not need you have a little more flexibility. You can postpone buying them until there is a sale or a price drop. Just like I did recently with the replay tv I just bought.
Because they can and it keeps their business profitable. Let's say JC Penney pays $15 per pair for Levis 501 jeans. They regularly sell them for $39.99. They COULD sell them for $25 and still make a profit, but they don't, because they don't have to.
It's far from correct to say that a car dealer makes 2.5% on every captive finance contract - I averaged more like .5%...the 2 and 3 point markups were few and far between.
That's what etch and gap for for!
I talked to a salesperson at the dealership and was told they don't necessarily do business this way. (This is where it gets real murky.) They will accept the CU check eventually, but will first want to do something called an "option contract". As I understand it, this gets the car in my son's hands a lot quicker, but she totally lost me with finance charges and all the other details associated with the option contract. Doing this over the phone added to the uncertainty. Long story short, I told my son to leave and not sign anything. He (and we) may go back there, but we found out we needed to do some homework...
The thing is, I've never heard of an option contract, nor do I know how it works. I have a suspicion the salesperson didn't want to wait for my CU check to be cut and sent and just wanted to consummate the deal stat.
Can someone explain what the dealer was trying to do? I felt like an idiot talking to the rep.
Thank you.
I've done a contract at a normal rate and term, with no penalty for early repayment, so the car can be delivered - the interest costs are close to nothing for letting that contract live for a week or two, then you pay off that contract with your pre-arranged method of financing.
Protects the dealership, gets them their money - most of the time we'd cover whatever interest charges there were.
I talked to a salesperson at the dealership and was told they don't necessarily do business this way. (This is where it gets real murky.) They will accept the CU check eventually, but will first want to do something called an "option contract". As I understand it, this gets the car in my son's hands a lot quicker, but she totally lost me with finance charges and all the other details associated with the option contract. Doing this over the phone added to the uncertainty. Long story short, I told my son to leave and not sign anything. He (and we) may go back there, but we found out we needed to do some homework...
The thing is, I've never heard of an option contract, nor do I know how it works. I have a suspicion the salesperson didn't want to wait for my CU check to be cut and sent and just wanted to consummate the deal stat.
Can someone explain what the dealer was trying to do? I felt like an idiot talking to the rep.
Thank you.
Just some food for thought ..
A certain Movado watch: $900
Cost: $225
70% off: $630
______________
You pay: $270
That's If, you can find one for 70% off, and If they are using original MSRP, and If they are a huge jewelry dealer ..
Terry ;^)
The way I view it, you aren't paying for a rock that has been buried underground for milleniums, you are paying for quality that is hard to reproduce. Of course, you can get "cheap" diamonds (and they look it), or you can step up to Tiffany and get the best.
Using watches as another example, a Seiko will keep the same time as Terry's Movado. You are paying for quality and style with the Movado, though (and a certain amount of "panache").
As a side note, don't tell my woman, but I buy her jewelry and my watches at Costco. Not nearly as much mark-up and all high quality (not some of the "junkier" stuff you get at Zales). All the woman sees is the "real sparkly" things on her ears, fingers, neck. She has no idea where they came from. If she's with me, I make certain we look at Tiffany (kind of dishonest, since she now thinks that's where I shop for her "trinkets").
Terry, I don't know if you you are aware, but you can also buy Tags, Baums and Movados at Costco, too.
That being said, do you think I purchase my stuff at Cartier or Neiman Marcus ..? .. ahhh I don't think so, next time your at Costco look around you, that's probably me in lane 6 ......
Terry
a. Of course you can negotiate at a jewelry store, at a mall or anywhere else. The sale price is the starting point and I've often dropped the actual price a good 15-25% below that. Try the day after Xmas or the week after that. Heck, try any weekday when you're the only potential buyer that day.
b. Set stones are almost impossible to shop effectively because each one is different. Not much leverage when The Significant Other is clutching your shoulder in a death grip under the belief "There's-Not-Another-Like-THAT-One-in-the-Known-Universe-and-if-i- ts-Not-Here-After-You-Check-a-Dozen-More-Stores-Somebody-Will-Be-- in-Deep-XXXX!"
Unlike new cars where her request is, "I want the same payment, black inside and out, with Nav - you figure out the rest."
c. Watches, as a manufactured, widely-distributed item, are a different story and I've bought several after shopping them on the net. Your choice usually comes down to authorized or grey market sellers without warranties; you pays yer money and takes yer risks. At the authorized sellers, watch manufacturers seem to have that market firmly in Price Control Land - and if that authorized dealer is caught selling below other such dealers, they can easily become grey market sellers in short order.
Now, about PCs with their 5-8% margins...or milk, now there's a great analogy...
Bill
Forget doing any negotiation on the shirt on the the front table, though...ain't gonna happen (I've tried).
I did try to negotiated with Costco on a computer that was a display (last one). They didn't budge from the price as marked...saying if it didn't sell, they'd send it back to the manufacturer and get all their money back. I would imagine, because of the amount of goods they push through there, that they have negotiated some very good terms with those that provide product to them.
Terry, as a matter of fact, I did think you only shopped at Cartier. Hopefully, you have a hat on with a hood pulled over your head when shopping at Costco. Don't want anyone to think you would stoop so low...;-)
Hey now, don't be knocking my boys at Costco .. I found a set of 6 Super steak knives in that place that were unbelievable, custom made in Brazil, serrated edges, teak wood handles, chrome 316L ends ... like my friend Crockadile Dundee would say ~ "Now that's a knife" you could cut your way out of a Abrhams Tank ...
Now, slipping it under my hooded sweat shirt so I wouldn't get caught was the hard part ....... ;^}
Terry.
I am a member of Sam's Club through work.
Finally "snuck into" a Costco last Friday night. What's the deal with that place. $45 a year and the prices are higher than I pay elsewhere.
Yet, they get a ton of good press.
What's the buzz on the place?
Graphics - passed up on a 2.2 Ghz, 80 GB Compaq laptop - floor model at Sam's two weeks ago at $449!!
: )
Mackabee
Just find someone in charge beyond the temp/clerk types.
Honest, it's easy. Don't be scared...all they could do is say no, right?
Live a little.
As for the "evil" empire comment, well... how much more would we all be spending on consumer goods due to inefficiencies in distribution if WalMart wasn't around?
Or how much more would we be spending on airfares if Southwest Airlines did not come along? It USED to cost $560 to fly last minute Cleveland - St. Louis RT as little as 10 years ago. Now it is about $170 - ten years later.
What's going to happen when one of the efficient auto producers (i.e. Honda, Toyota, etc.) decides to sacrifice profitability for a couple of years in order to grab a nice chunk of market share?
Or when WalMart decides to get into the car business??? That would be V-E-R-Y interesting.
Well, they already tried. In a few markets they put cars on their parking lots, posted "everyday low prices" in the windows, got salespeople, etc... the local dealers around them ate them alive and they decided they didnt want to be car dealers anymore....Walmart might be able to run mom and pop off main street but they never tangled with car dealers before.
I was not surprised to find the (maximum allowable in Texas) $50 document fee. I paid that.
I was surprised to find them trying to charge me "Dealer's Inventory Tax". My question: why do they think I should pay this tax? Isn't it like taxing me twice?
For the 2003 Expedition, I objected to the tax, and they took it off without a problem. (I was paying invoice minus $4,000 rebate minus $2,600 for the 6,700 demo miles.)
For the 2004 Sienna, for which the deal had a little more padding for the dealer (5% over Edmund's invoice), they told me they had to charge it, but they reduced the car price by the $63.50 Dealer's Inventory Tax, then charged it back to me at $63.37 on the space provided.
What gives?
Next time I buy cars (in ten years or so) I will negotiate the OTD price.
Of course, that is exactly what people said in the Columbia/ Jefferson City, MO area when Walmart announced that they were going to sell groceries in a Supercenter format in 1990.
One St. Louis grocery exec was quoted, "they'll never get people to shop THERE for groceries."
Food for thought.
Life is too short...
Apparently, dealers agree to a minimum selling price and that's who the buyer is connected with.
My brother and his wife were completely satisfied with the purchase.
M.
Keep in mind this tactic is only valid if you are willing to go get the car if offer is refused. I can pretty much negotiate any deal but it is pretty hard in a captive market.
I never gave it much thought either until a friend showed me some websites that deal with this issue. You would be amazed.
I try to support small business as much as possible. That's how my family made there income 100 years ago. Those big giants have to tamed somehow!
M.
In general, I think they forge some sort of arrangement with brands/dealers who have "middle of the road" cars and not the more lux or esoteric cars/brands I tend to buy. Wanna Chevy, they can help. Wanna buy an Audi, fuggeddaboudit.
Having memberships at both Sams and Costco, in general, Costco has more upscale goods.
For example, using our watches example, ou can find the Tags, Movados and Baums at Costco....at discounted prices that the jewelry stores aren't able to match. Can't find those at Sams.
If it wasn't obvious, I love fine watches. Some think I'm a bit "off" as any watch these days keeps good time. I just like the feel and style of a good watch and shop for them regularly.
It's designed to be a hassle free way to buy a car. The price is already set. Give the customer a "quote" and they should be happy, right?
Except it doesn't work that way.
Most of the time the customer will take that quote and go shop it. They might save another 100.00 elsewhere. Then when the "club store" calls them to follow up they will tell them they have a lousy program.
" Your program is no big deal...I took your price and shopped it and I bought it for less"
We dropped our affilation with these people and with the thousands of dollars we now save we can pass that along.
I love it when someone asks if I can beat a "club store" price!
You guys get upset with someone grinding the last couple hundred off MSRP and then complain that the same buyer won't bother to dicker with Best Buy over a $200 TV or the jewelry store at the mall on buying a watch. And, apparently, neither will you.
Shouldn't complain if you're too lazy to do it yourself.. but hey, that's your choice; on a Timex, sure, who cares.
An example...and it follows some posts above.
I also love watches and want to buy a Movado that stickers for $1095. Actually I want my wife to buy it for me since its been 20 years since she bought me a Concord and I have explained to her, many times over, that the second such gift is very overdue.
We went to the mall last night and walked into one chain type jewelry store; there's My Watch, calling my name. Ok, sir, how much? "Well, it's marked $1095 but I think we can do 15% so your price is...$930 plus tax." That the best you can do? "Well, I think the manager can authorize 20% - but he's on break and will be back in about 15 minutes." - Ok, thanks.
Next jewelry store, about 100 feet away - same watch, same conversation. "$919." How did you do that so fast? "Well, see, there's a code number on the tag that says 919." Oh - are you sure it isn't $616 and you're reading it upside down? Hahaha...that didn't work... so now we're down to somewhere between $919 and the be-back-manager's-possible $876. I mention to the manager at store #2 that store #1 will let it go for that $876 in a few minutes when his fellow manager finishes his smoke..."oh, we can beat that - no one sells this model as cheap as we can...except Costco."
Hmmm, Costco....
He continues..."Yup, Costco offers refurbished Movados...they sell this model for around $650 and I called the factory rep today to complain that they are not informing the public that their Movados are used."
Costco sells medium-price, used watches as new? Wow, where do they buy all those used Movados...pawnshops across the country?...some guy selling out of his trunk? Special deal with the Movado Second Hand Store?
Mall sales people are almost as much fun as auto sales people. This guy took a sure
$850-$875 deal and turned it into a dead deal in less than 10 seconds.
Anyway, so much for mall grinding. Gives me something to do when my wife is looking at candles.
Yup, and I will check Costco down the street during a weekday when I can find parking.
After all, it's only a commodity watch.
What about minute hands and hour hands?