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You’re way off on a tangent now. That’s telling people how to spend their money, and nothing to do with how to make a purchase after that decision is already ma

You’re way off on a tangent now. That’s telling people how to spend their money, and nothing to do with how to make a purchase after that decision is already made. I dont think you understand the car business as much as you think you do, as you’re clearly unaware of some basic business practices. All new cars come from manufacturer affiliated dealers! Just one example of why you’re wrong - the dealer doesn’t subsidize the loan, the manufacturer does using their captive financing company. Therefore, it’s a completely different line item that the dealer has no flexibility to touch. Obviously, if you can borrow at 0% without giving anything up, you’d be foolish not to. The bank has no other way to make money from you. You say that’s a good thing, but it isn’t. The reason is that the manufacturer can take a loss on the loan because they make money selling cars. This has nothing to do with the dealer, and you can’t negotiate an alternative unless the manufacturer provides a similar cash-buyer incentive. They often don’t, and it’s 0% or nothing regardless of the sale price. ”I actually forgot that people can get repair service and financing from a manufacturer-affiliated dealer.” To forget something so basic and fundamental means you really are not in a position to present authoritative sounding absolute statements.

logfromblammo 8y ago
It was a rhetorical device. Going to the manufacturer's dealer is something I can't ever do, because I don't have "just get it done" money. No matter how you structure the deals, cars flow one way, and money flows the other way. Everyone involved in supplying the car has to get paid, and that money ultimately comes from customers. Everyone you see in the business is ultimately being paid something by you. Everyone you don't see that is facilitating the purchase process is ultimately being paid something by you. Financing from a manufacturer-captive company is only added to the sales business because it results in more total money flowing from customer to car business. It enables higher sale prices on the cars. The business has to make money somehow, or it stops existing, because those people handling money and reviewing paperwork have to be paid, too, and if they don't get paid, they leave. Comparing the costs of loans of varying interest rates is just a time value of money calculation. It is easy to offer a zero-interest loan, by pre-computing the value of the interest you otherwise would have charged, and adding it to the principal at the start. If you buy a car for $12000 with no down payment and a 24 payments at 0%, that's $250/month and a total cost of $12000. If you get a loan for $9250 for 24 months at 4% and make a $2000 down payment, that's ~$209/month and a total cost of ~$12032. If you make even a single payment earlier than scheduled, you will end up paying less. When you are offered a 0% loan, know that the interest you would have been paying is probably implicitly being added to the purchase price up front, as a means of paying for the lending. You would be well justified in pressing for a discount for paying in cash (or bringing your own financing), and you will have more leverage to do so, because the dealer will not know exactly how much is in your budget.
- lawnchair_larry 8y ago
  Yeah, you’re still not getting it. Nevermind. For starters, read up on manufacturer incentives to dealers, and dealer holdback. The manufacturer has margin that the dealer cannot access, and the customer cannot negotiate with the manufacturer. Hidden incentives change monthly, and they are provided to the dealer separately for loan, lease, and cash. Knowledge of your own budget never matters when you always have the dealer’s numbers (easy to obtain with some research), BATNA, and competition. You’re making a lot of assumptions that seem logical to someone unfamiliar with the business, but don’t hold true because these assumptions are either wrong or missing critical information.

logfromblammo 8y ago

It was a rhetorical device. Going to the manufacturer's dealer is something I can't ever do, because I don't have "just get it done" money. No matter how you structure the deals, cars flow one way, and money flows the other way. Everyone involved in supplying the car has to get paid, and that money ultimately comes from customers. Everyone you see in the business is ultimately being paid something by you. Everyone you don't see that is facilitating the purchase process is ultimately being paid something by you. Financing from a manufacturer-captive company is only added to the sales business because it results in more total money flowing from customer to car business. It enables higher sale prices on the cars. The business has to make money somehow, or it stops existing, because those people handling money and reviewing paperwork have to be paid, too, and if they don't get paid, they leave. Comparing the costs of loans of varying interest rates is just a time value of money calculation. It is easy to offer a zero-interest loan, by pre-computing the value of the interest you otherwise would have charged, and adding it to the principal at the start. If you buy a car for $12000 with no down payment and a 24 payments at 0%, that's $250/month and a total cost of $12000. If you get a loan for $9250 for 24 months at 4% and make a $2000 down payment, that's ~$209/month and a total cost of ~$12032. If you make even a single payment earlier than scheduled, you will end up paying less. When you are offered a 0% loan, know that the interest you would have been paying is probably implicitly being added to the purchase price up front, as a means of paying for the lending. You would be well justified in pressing for a discount for paying in cash (or bringing your own financing), and you will have more leverage to do so, because the dealer will not know exactly how much is in your budget.

lawnchair_larry 8y ago
Yeah, you’re still not getting it. Nevermind. For starters, read up on manufacturer incentives to dealers, and dealer holdback. The manufacturer has margin that the dealer cannot access, and the customer cannot negotiate with the manufacturer. Hidden incentives change monthly, and they are provided to the dealer separately for loan, lease, and cash. Knowledge of your own budget never matters when you always have the dealer’s numbers (easy to obtain with some research), BATNA, and competition. You’re making a lot of assumptions that seem logical to someone unfamiliar with the business, but don’t hold true because these assumptions are either wrong or missing critical information.