When people pay cash for a car..

[thekid]

You can get a better price on the car if the dealer believes it will be financed because they will be able to get the profit they concede on the car back in the bonus they give for financing.

In some states the banks will only tell the dealer what the lowest APR they will give a loan for is. The dealer is allowed to offer you a higher APR, and if you sign on it they get to pocket the difference between the lowest one the bank would give and what you took. They are not obligated to tell you the bank was offering 3% if they get you to agree to 5%.

Thanks.

Are we talking new?

At least here in Canada, financing is offered by the maker through the dealer. Financing terms (and cash payment rebate) are public. They are often listed on the maker's site or available otherwise. The dealer doesn't directly contract financing with a bank, at least for the makes that I've shopped. You can't negociate the rate or the cash payment rebate with the dealer, they are set (often monthly) by the maker. The only thing to discuss with the dealer is their markup on the sale.

[disneysteve]

At least here in Canada

Ah! That explains a lot. I was wondering about the content of your posts because I knew they just weren't true. Things are different here in the US.

[MiikeB]

Thanks.

Are we talking new?

At least here in Canada, financing is offered by the maker through the dealer. Financing terms (and cash payment rebate) are public. They are often listed on the maker's site or available otherwise. The dealer doesn't directly contract financing with a bank, at least for the makes that I've shopped. You can't negociate the rate or the cash payment rebate with the dealer, they are set (often monthly) by the maker. The only thing to discuss with the dealer is their markup on the sale.

It is applicable new and used. While many times the rates are published if you finance through a preferred finance company, many people do not qualify for their companies terms and instead the dealer seeks out another lender for them, often at a much higher rate.

[thekid]

Ah! That explains a lot. I was wondering about the content of your posts because I knew they just weren't true. Things are different here in the US.

I get that here alot. Love the subjects, but it often seems like I'm in a close-but-yet-not-quite-the-same parallel universe.



I've actually never seen a dealer offer anything other than the maker's financing (either offered inhouse by the maker or through a bank but for all of that make's dealers)...ie: as far as I know, all dealers of the same make offer the same financing.

[thekid]

It is applicable new and used. While many times the rates are published if you finance through a preferred finance company, many people do not qualify for their companies terms and instead the dealer seeks out another lender for them, often at a much higher rate.

Just wondering, is the published preferred rates negociable?

[disneysteve]

as far as I know, all dealers of the same make offer the same financing.

The rate offered by the dealer is negotiable. Last time I financed a car, I shopped around for the best rate in advance. The dealer offered a higher rate. I said I'd go elsewhere and told him the rate I had found and he agreed to match it, so I financed there.

Dealerships make most of their money on financing and on service, not on sales. That's why they will negotiate a better price if you are financing through them.

[Simplicity-]

Dealershps don't make anything on the finance charges, the finance company does. Dealerships make there money on USED car sales, and service/parts dept.

New cars generally net 25-30% of a new car dealerships annual revinue. Used Car sales, Parts Dept., Service, and MANUFACTURER warranty repairs/EXT warranty sales make up the additional 70-75% of revinue. Remember that your warranty is not done through a dealer but a manufacturer, hence why you can take that warranty to any dealership that will honor it.

Used cars they buy for 4-5K+ under resale value.

[facebookdigg123]

somewhat related article
Confessions of a Car Salesman - Yahoo! Autos

[nikon_62]

I used to work at a dealership about 10 years ago and I'd been told they would not do cash sales. The closest to cash they would do was a cashiers check. I don't know if that rule was dealership specific or a Michigan thing. Supposedly it was to protect the dealership from the liability of someone laundering stolen money by purchasing cars.

Take that with a grain of salt though It's just something I heard from a car salesman.

[feh]

I used to work at a dealership about 10 years ago and I'd been told they would not do cash sales. The closest to cash they would do was a cashiers check. I don't know if that rule was dealership specific or a Michigan thing. Supposedly it was to protect the dealership from the liability of someone laundering stolen money by purchasing cars.

Take that with a grain of salt though It's just something I heard from a car salesman.

I suppose it might be a dealership rule or state law. Here in WI, you can use a personal check (I just did last night).

[krantcents]

I have never paid cash for a car. I usually get a low interest loan through my credit union and pay it off. I can usually earn more money from the cash than the interest Iwill pay.

[jerrycates]

That sounds like a nice scene! The sales people will all come running to you to assist you as you choose which one you like to buy. It was just like ordering a take out in an ordinary diner. People will rather stare at you, or smile their widest grin!

[MonkeyMama]

I get that here alot. Love the subjects, but it often seems like I'm in a close-but-yet-not-quite-the-same parallel universe.

LOL.

Don't worry about it. I live in California and feel the same way ALL THE TIME. A lot of the time - no idea what people are talking about. Things can just be very different in other regions, even in the same country. Obviously moreso if from another country.

Anyway, this is just a good reminder that things are different everywhere.

[debtelim]

I'd always go with a cashiers check just to be safe.

[krantcents]

If I were paying cash, I still would write a check. I wouldn't carry thousands in cash.