Ask the Sales Rep.

[B4tMan]

Originally posted by pathwaydon
I have had deals go totally sideways once I told a customer the full cost of the car and the amount they would finance. The bigger number scares most people.

I know, that is why also prices are listed are lower than in reality, and only later most buyers find out the real cost includes extras : dealer fees + registration + and the necessary GST + PST (for you). It is understandable though, your dealership has to also profit.

Coming back to the bigger number; it is like a mortgage. People do not know that the house costs double at today's rate at the end of the term.

Although not available to everybody, the idea of cash on the spot is better financially for the buyer.

[pathwaydon]

As a side note, no one is holding a gun to anyone's head on those VFC deals. I give them the payment, the term,the cost of borrowing and the opportunity to sign. It isn't my fault that they need a car and can't get premium financing.

Sometimes 2 bad choices (buy a car at 15% interest or don't buy a car at all) is the only way out for someone.

[pathwaydon]

Originally posted by B4tMan

I know, that is why also prices are listed are lower than in reality, and only later most buyers find out the real cost includes extras : dealer fees + registration + and the necessary GST + PST (for you). It is understandable though, your dealership has to also profit.

Sorry...this one does bug me. Advertised prices are ALWAYS ALWAYS ALWAYS for the least expensive trim level of particular model of vehicle. My pet peeve is people that refuse to read the small print. The auto industry isn't the only industry that does this. Go to the paper, read a Future Shop ad or whatever. Every item, everywhere is advertised as "Starts at..." for X trim level.

GRRR...this one really gets me. You got a nerve. I tried to be as empathetic as possible to everyone when I started this thread, I really did. Good job, you got me.

[B4tMan]

Sorry, I want the buyers to be more aware that some dealers are out for their money, not their well being.

This is a discussion board, don't involve any feelings it is meant to be argumentative. We are sharing ideas, and mine side with the buyer.

... besides, you are not losing any business in Alberta.

[pathwaydon]

Originally posted by B4tMan
Sorry, I want the buyers to be more aware that some dealers are out for their money, not their well being.

This is a discussion board, don't involve any feelings it is meant to be argumentative. We are sharing ideas, and mine side with the buyer.

... besides, you are not losing any business in Alberta.

Agreed. But it's my opinion that everyone wants they're money. Not just dealers.

I wasn't really that upset. I was kind of joking. My goal too was to educate buyers when I started the thread. My hope was to make the process easier for everyone buying a car by answering some of the questions people must have about why sales reps/dealers do the things they do.

[B4tMan]

Appreciate the view from the other side of the fence


How is the Genesis received by clientele as a product in the whole Hyundai lineup ? Am curios specifically about the sedan, as that seems to be quite a car.

[Masked Bandit]

Originally posted by pathwaydon
As a side note, no one is holding a gun to anyone's head on those VFC deals. I give them the payment, the term,the cost of borrowing and the opportunity to sign. It isn't my fault that they need a car and can't get premium financing.

Sometimes 2 bad choices (buy a car at 15% interest or don't buy a car at all) is the only way out for someone.

Isn't that the truth eh! I don't blame the dealerships for using the VFC / Wells Fargo outfits, I just can't understand who the hell agrees to those terms. Something about there being one born every minute I guess.

[Redlyne_mr2]

I'm not a fan of those newspaper adds that show the cheapest trim level and don't include the associated dealer fees. They're nation wide adds and dealer fees vary from province to province so when the customer does refer to the price in the paper it just creates more problems because of the discrepency.

[pathwaydon]

Originally posted by Masked Bandit


Isn't that the truth eh! I don't blame the dealerships for using the VFC / Wells Fargo outfits, I just can't understand who the hell agrees to those terms. Something about there being one born every minute I guess.

It's not about being suckers though. If someone has a bankruptcy or has dicey credit, VFC and Wells Fargo are the ONLY option they have if they don't have cash. They know why they're paying that interest and actually a car loan is one of the best ways to re-build damaged credit. Ask any trustee, they'll say the same thing.

[canuckcarguy]

For the record, I don't work in the industry. I did, for 4 months summer vacation during university years ago. Great education in personal finance and responsibility, and also a reminder of why I wanted to complete my university education - if I had to sell cars full time, I'd die a slow and painful death. That's not a sleight - I just think it's a tough grind. Plus, for a lot of dealers, dirty as hell.

I still stand by cash buyers having the opportunity to get the best deals. Yes, the dealer makes the same whether cash or finance, all things being equal (though they're often not). But again, cash in the pocket = power, and the confidence of knowing you're in the driver's seat (pun intended) should result in more negotiating ability and more discount.

As for investing the cash and financing the car, this really only makes sense in a true zero percent financing deal. These are rare, if only because dealers don't want to alienate cash buyers by offering incentives only to finance buyers. Again, if you're paying for 0%, it's not really 0%. And the depreciation argument is typical car sales bullshit. The depreciation is identical whether you pay cash or finance, and personally I'd rather not owe more money than a vehicle's worth. And respectfully, I don't go to a car lot for financial advice. A salesperson's assurance of one deal or another being better for my personal financial situation is useless. If I want financial advice, I'll go to a properly trained financial professional.

I've paid cash for every vehicle I've ever bought, save one that I leased for my business. Way more transparent deal when paying cash.

As you yourself have said in an earlier post, finance buyers are usually far more concerned about payment and credit approval than price, so at a minimum, it stands to reason that a cash buyer will be more focused on the bottom line and thus more likely to get a better deal. This is one good reason why the dealerships like a finance deal better.

And as far as the salesperson not having the power to set prices, this is a deliberate negotiation technique employed by the dealership to strengthen its negotiating position. It works well, though relegates the salesperson to a less important overall position in the transaction, since he often has no authority whatsoever. His only job is to sell the deal that the sales manager structures. Which means, from a negotiating perspective, that a customer should do the homework, decide on a price, and not deviate from it with the salesperson. If the sales manager has to come out and close the deal, so be it.

And on a final note, as long as we're discussing car negotiation, customers should never pay a document fee. It's a bogus, made-up fee that represents extra profit for the dealership, and under no circumstances should you pay it. I typically agree to pay a doc fee only if the dealer will in turn pay my doc fee, which of course is higher since I don't enjoy the same volume advantages as a dealer. This is always a battle, and always a winnable one, though oftentimes the dealership will take the doc fee out of total gross, thus affecting the salesperson's commission. Oh, well.

[kaput]

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[prae]

Originally posted by kaput
Are leases also 'open' in the same way as a finance ie. can be bought out with no penalty and no future interest charges at any time?

usually there is a penalty for early termination of the lease, i.e. if you walked away from the lease.

This is because the majority of the depreciation happens earlier in the term of the lease, so the lender would probably be "upside down" on the car if they had not collected all lease payments.

whether you could simply take residual value and add all the remaining lease payments, then own the car... dont know about that one.

[scat19]

Originally posted by Redlyne_mr2
I'm not a fan of those newspaper adds that show the cheapest trim level and don't include the associated dealer fees. They're nation wide adds and dealer fees vary from province to province so when the customer does refer to the price in the paper it just creates more problems because of the discrepency.

I saw one in the paper today. For a BMW 323i, so much per month etc. They showed a loaded 335i.

[kaput]

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[KrisYYC]

Is it true that it's easier to get a car loan for a new car vs. a used car?

[ExtraSlow]

The qualifiying criteria for each loan should be about the same. However, the loan interest rate is almost always lower for new cars since it's a promotional rate backed by the manufacturer.

[max_boost]

Originally posted by kaput


By early termination, I don't mean walking away from the lease, but buying it out. If I lease for 4 years rather than finance (ie. lower monthly payment) and then decide to sell the vehicle privately after 1 year, am I able to pay out the remainder owing on the vehicle interest free and without penalty?

I understand depreciation and being 'upside down' and I don't care about it. I just want to know if there is a penalty with leasing vs. financing, and what it is.

There shouldn't be a penalty. I've done this a couple times.

[canuckcarguy]

Originally posted by ExtraSlow
The qualifiying criteria for each loan should be about the same. However, the loan interest rate is almost always lower for new cars since it's a promotional rate backed by the manufacturer.

Plus even banks sometimes offer lower rates on what they consider to be "better" security, so often their rates are slightly better on newer vehicles. They sometimes treat loans on older vehicles as virtually unsecured.

[T-Bone M5]

Assuming I have a invoice (from CarCostCanada) in hand and cash in the other and no trade-in.

Is it fair to start negotiating at invoice cost minus any incentices? You will then only be negotiating dealer profit. What is a fair profit for the dealer?

I have heard a profit of $400 is a good deal for the customer, but 4% of the invoice price (minus incentives) is a more realistic price to agree on.

I usually ask for the dealer to throw in some oil changes after agreement on price, this usually sends them off, but they have always given in.

Do people actually pay MSRP? Reminds me of the King of the Hill episode, where Hank was so proud that he paid not a dime over the sticker price. ha