OT: sportwagen

[dmitrik4]

Originally Posted by rice rocket

I had the misfortune of having to replace my daily last month.

Things I've found out that have changed in the past 15 years since I've been in front of a dealer salesman:

#1, they're all owned by 3 or 4 companies nowadays (Autonation, Lithia, Penske?), or tied to some smaller conglomerate or PE firm
#2, they will upsell you on ANYTHING. $1000 lifetime battery contract? $1000 in lifetime oil changes? I get it's inconvenient when it happens, but I'm not pre-paying 10 years worth of batteries, rolled into my 7 year loan that I pay 100% interest and zero principal on up front
#3, they no longer just check financing at several lending institutions to get the best rate for you, they are all banks themselves and have no fiduciary duty to help anybody but themselves and will quietly sell you a loan, at twice the market rate without blinking (I was given 8.25% for 36 months with 50% down, versus 3.99% at a bank/CU)


Fleecing everybody is the name of the game nowadays. It's a total race to the bottom in the stealership world, especially now that they can sell their own **** loans.


Okay, soapbox over.

Get the options, they are fun. The heated steering wheel, the automatic cooled/heated seats, the auto open/close tailgate, they are little pleasures make this world tolerable.

Every manufacturer has a captive finance division; it would be foolish to let a bank make that interest revenue when they can keep it for themselves. Flip side is that you often can get a better sales price if you finance through the manufacturer. I’ve done that before to get a discount/incentive, then a few months later refi’d through my CU at a much lower rate.

[rice rocket]

Originally Posted by dmitrik4

Every manufacturer has a captive finance division; it would be foolish to let a bank make that interest revenue when they can keep it for themselves. Flip side is that you often can get a better sales price if you finance through the manufacturer. I’ve done that before to get a discount/incentive, then a few months later refi’d through my CU at a much lower rate.

I understand manufacturer, GM, Honda, etc. financing, who use promo rates as a lever to drive volume on certain models that are accumulating inventory.

I was given a loan from the lending arm of Lithia Motors, Driveway Finance Corporation. There is no better price, there are no incentives. They don't even check other banks anymore and earn loan commission, it's just what's the worst rate we can get this guy to agree to so we can make the most money. And for reference, my FICO 08 (auto) at the time of loan origination was 868/900, which they pulled and showed me, so there is absolutely no reason for a 8.25% rate, that is nearly double the prevailing market (and more than double my lowest rate, at NFCU).

It was pretty obvious in hindsight now that I think about it, they just tell their sales people to focus on what the monthly payment is, and not how much you're actually paying in interest at each rate/term. Only time it was mentioned was the truth in lending form, which they are forced to produce per the CFPB.

[.RJ]

Originally Posted by rice rocket

It was pretty obvious in hindsight now that I think about it, they just tell their sales people to focus on what the monthly payment is, and not how much you're actually paying in interest at each rate/term. Only time it was mentioned was the truth in lending form, which they are forced to produce per the CFPB.

It sucks how well prepared you need to be to come in to a dealership and buy a car and not get taken advantage of. And even if you are prepared for it, still sucks to leave like they're trying to screw you at every turn until you're out the door.

[batman1425]

Originally Posted by rice rocket

It was pretty obvious in hindsight now that I think about it, they just tell their sales people to focus on what the monthly payment is, and not how much you're actually paying in interest at each rate/term. Only time it was mentioned was the truth in lending form, which they are forced to produce per the CFPB.

This. The unfortunate thing is that most people are not financially literate enough to see beyond monthly ins/outs and dealers take advantage of that. Also by forcing buyers into making emotional decisions.

My personal favorite from my experience - I didn't get presented with the carfax on a used car I bought until after signing a purchase price agreement. I asked for it, but didn't push to get my eyes on it before settling on a price. It was being sold CPO so I assumed it would be OK. That's on me and a mistake I won't make again. After I signed off on price "Oh here's the carfax, just one accident..." Guess who refused to amend the price based because they had my signature. Lesson learned.

IMO, best things you can do are:
1. Get your own financing ahead of time if you will be financing it. They might not give you a better price on the car, but you'll likely make that up and more in saved interest.
2. If you have a trade-in, don't even bring it up until you've settled on a price for the car you are buying.
3. Talk in out the door price, not payments
4. Take a long hard look at the "fees" that are added in and be prepared to push back
5. Do all of the above over email as much as possible. Don't let them occupy your time in person and use that as a tool to create a sense of urgency.

[.RJ]

Originally Posted by batman1425

5. Do all of the above over email as much as possible. Don't let them occupy your time in person and use that as a tool to create a sense of urgency.

This is so key.

Should only be at the dealer to sign papers and get the keys.... although I've bought half my cars sight unseen and shipped them home.

[fourflys]

Originally Posted by rice rocket

I understand manufacturer, GM, Honda, etc. financing, who use promo rates as a lever to drive volume on certain models that are accumulating inventory.

I was given a loan from the lending arm of Lithia Motors, Driveway Finance Corporation. There is no better price, there are no incentives. They don't even check other banks anymore and earn loan commission, it's just what's the worst rate we can get this guy to agree to so we can make the most money. And for reference, my FICO 08 (auto) at the time of loan origination was 868/900, which they pulled and showed me, so there is absolutely no reason for a 8.25% rate, that is nearly double the prevailing market (and more than double my lowest rate, at NFCU).

It was pretty obvious in hindsight now that I think about it, they just tell their sales people to focus on what the monthly payment is, and not how much you're actually paying in interest at each rate/term. Only time it was mentioned was the truth in lending form, which they are forced to produce per the CFPB.

and it's funny people will still argue you shouldn't pay cash for a car.. just sayin'.. (don't come at about how much I can make on this fund or that fund, I get it..)

[fourflys]

Originally Posted by batman1425

IMO, best things you can do are:
1. Get your own financing ahead of time if you will be financing it. They might not give you a better price on the car, but you'll likely make that up and more in saved interest.
2. If you have a trade-in, don't even bring it up until you've settled on a price for the car you are buying.
3. Talk in out the door price, not payments
4. Take a long hard look at the "fees" that are added in and be prepared to push back
5. Do all of the above over email as much as possible. Don't let them occupy your time in person and use that as a tool to create a sense of urgency.

this is good advice for sure.. I used to teach common, everyday finance stuff to young Coasties when I was stationed in Yorktown, VA many years ago.. being around a big Navy town, there were a LOT of predatory used car dealers.. a lot of folks, esp young folks, have to buy based on what payment they can afford.. but I would try to convince them to go talk to the credit union on base first and figure out what they could truly afford and THEN go to the dealer armed with the out the door price they could do.. I always suggested they bring the purposed contract back to one of us (command financial counselors) to review before they signed.. some did, most didn't.. but I was hard-headed 20 year old as well.. probably still am at 50, just about different things..