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> they get paid a referral fee for you opening a loan Which is added in to the finance charges or amount borrowed. Ever wonder why the salesmen always want to

> they get paid a referral fee for you opening a loan Which is added in to the finance charges or amount borrowed. Ever wonder why the salesmen always want to negotiate a "payment" amount instead of a purchase price? > No they'd just have sold to someone willing to pay their price. And I'd have just gone to another dealer willing to work with me on my terms. > There's a car supply shortage True, and that causes higher prices overall. But negotiation strategies for getting the best deal haven't changed.

chrisseaton 6y ago
> Ever wonder why the salesmen always want to negotiate a "payment" amount instead of a purchase price? Well that's the point - say you want agree a purchase price for the car before you talk about how you'll pay. Do that and get an actual number from them. Then... Offer to pay the agreed price cash and ask for a discount based on this - you won't get one because there's no benefit to the dealer in taking cash it's just an inconvenience to them. or... Offer to take at least a small a loan and ask for a discount based on this - you might get one because the way they are established means there are strong incentives for them to make loans. In either case you can of course threaten to walk away if the price isn't right, but paying cash isn't going to increase your bargaining power it's going to diminish it - 'not only is this person wanting to pay less but they also want to fuck up my loan referral rate and fee and make me unpopular with my manager'. And at some point I presume you need a car so you can't walk away forever. The idea that you're an attractive customer if you'll pay cash is a 90s thing.
- Godel_unicode 6y ago
  The lowest total cost you can pay for most new cars* is to put in a sizable down payment, chose a loan with a low-but-non-zero interest rate, then pay the whole thing off as soon as the loan paperwork shows up. This will always get you the highest dealer incentives (i.e. lowest number on the invoice) which get made up by the bank paying for the profitable loan. After that is buying cash, and last place is 0-interest loans (I guess technically last place is interest-bearing loans paid off in installments, but if you can pay cash that's not really a consideration). There are always offers which are available to cash buyers/real loan buyers, but not 0% financing buyers. The reason for this is simple; 0% financing is a hack to get people to buy more expensive cars, and you'll discover that on the lower margin cars that option mysteriously vanishes. I just went through this myself and helped two friends out, it's true for Ford, Honda, VW, Audi, and Chevy at least in the US. * If you happen to be one of the few people who actually wants to buy a high-margin car (usually Halo cars like Corvettes) then sure, get the 0% financing. Just realize that you're being fleeced, although if you're buying a Vette you probably already knew that and value isn't top-of-mind

chrisseaton 6y ago

> Ever wonder why the salesmen always want to negotiate a "payment" amount instead of a purchase price? Well that's the point - say you want agree a purchase price for the car before you talk about how you'll pay. Do that and get an actual number from them. Then... Offer to pay the agreed price cash and ask for a discount based on this - you won't get one because there's no benefit to the dealer in taking cash it's just an inconvenience to them. or... Offer to take at least a small a loan and ask for a discount based on this - you might get one because the way they are established means there are strong incentives for them to make loans. In either case you can of course threaten to walk away if the price isn't right, but paying cash isn't going to increase your bargaining power it's going to diminish it - 'not only is this person wanting to pay less but they also want to fuck up my loan referral rate and fee and make me unpopular with my manager'. And at some point I presume you need a car so you can't walk away forever. The idea that you're an attractive customer if you'll pay cash is a 90s thing.

Godel_unicode 6y ago
The lowest total cost you can pay for most new cars* is to put in a sizable down payment, chose a loan with a low-but-non-zero interest rate, then pay the whole thing off as soon as the loan paperwork shows up. This will always get you the highest dealer incentives (i.e. lowest number on the invoice) which get made up by the bank paying for the profitable loan. After that is buying cash, and last place is 0-interest loans (I guess technically last place is interest-bearing loans paid off in installments, but if you can pay cash that's not really a consideration). There are always offers which are available to cash buyers/real loan buyers, but not 0% financing buyers. The reason for this is simple; 0% financing is a hack to get people to buy more expensive cars, and you'll discover that on the lower margin cars that option mysteriously vanishes. I just went through this myself and helped two friends out, it's true for Ford, Honda, VW, Audi, and Chevy at least in the US. * If you happen to be one of the few people who actually wants to buy a high-margin car (usually Halo cars like Corvettes) then sure, get the 0% financing. Just realize that you're being fleeced, although if you're buying a Vette you probably already knew that and value isn't top-of-mind