Quote:
Originally Posted by UNKNOWN_370
And where did you get that info from? Banks and dealers have a very cozy relationship. Show me a major dealership that isn't wired into at least 90% of the banking industry? How you pay matters more than you think.
Anyway I'm not going to make this another 370z forum hashout "Mr. Mustang"  Its just advice from info I have obtained over the years. I'm just trying to help. Advice can be taken or left behind. |
I don't know why you think this is going to turn into a forum hashout or feel the need to call me "Mr Mustang." Bitter, much?
You stated that the dealer will try to make you pay a higher price if they know you are paying cash. I want to know how this makes any sense.
First of all, method of payment is usually discussed
after you agree on price, so the dealer would never think "well, this guy is paying cash so I'm not going to budge on my pricing as much as if he were financing with us." The fact is, all dealers will try not to budge on price as much as possible. They want to maintain as high of a profit margin as they can on the sale, regardless of how the customer is paying.
Second, dealerships that offer financing usually do it in one of three ways:
1) They offer financing through their own independent financing company (large dealership networks sometimes have their own financing arms)
2) They offer financing through each individual manufacturer's financing arm (i.e. Ford Credit).
3) They are partnered with local financial institutions to offer financing.
In scenario 1, the dealership network assumes all of the risk of the loan through it's financing arm. They stand to lose money if the customer fails to make his payments.
In scenarios 2 and 3, the dealership is paid up front, just as if the customer was paying in cash (either with cash or with a loan from an outside institution). So terms of the loan do not matter to them in a situation like this, unless there are some kickback schemes where the financing arm pays the dealership a "finders fee" or a trail on the business.
But really, when does a dealership
NOT have an incentive to charge you as much as humanly possible for a car? Regardless of how you are paying for it, they want as much as you can get.
If anything, Options 2 and 3 are best for the dealer because they could snooker an uneducated consumer into buying based on monthly payment amounts and not total costs.
If you are smart and negotiate pricing BEFORE you even discuss payment, you have the upper hand. I didn't come here for a fight (like you always assume
), I just want an honest discussion and an explanation from you on why the form of payment matters. Maybe there is something I haven't considered that you could fill me in on.