Quote:
Originally Posted by MZ DAIZY
Thinking about upgrading wife’s war wagon. She’s got a 2011 Kia Forte hatchback with 32,000 miles on it. Runs fine and only had one problem with it (CEL) which was fixed for about $500, About a year ago. She wants the creature comforts of today’s cars, like LED’s, heated seats, remote start, etc...
Called the local Honda dealer. They have a 2023 HR-V AWD which would suit her needs (and mine) to a tee. MSRP of roughly $29,000.
So far so good...
Comes to financing now. $602 a month for 72 months with $4,000 down.
Me: uh, excuse me? What’s the interest rate?
Dealer: 5.9%
Me: ok, how do you come up with that number?
Dealer: $4,000 down on a $39,000 vehicle?
Me: $10,000 over sticker price?
Dealer: we’re not the worst ones out there.
Me: Stick it up your ***.
Dealer: sir, you don’t understand...
Me:say hello to Mr. dial tone. :click:
I’ll wait a couple of months, years when we go back to “negotiating” a price. This clowns should be run out of business by the manufacturer’s.
Next to a lawyer or politician, I can’t think of a lower life form than a car “dealer”.
:rant off:
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My opinion:
We're in a bit of a weird spot. On one hand, due to COVID, there still is a global supply/parts/labor issue. On the other hand, the feds are trying to fight inflation and raising rates beyond belief (three 75 bps raises YTD), with a few more increases expected by the end of the year. While the feds are trying to discourage spending to bring inflation under control (which is good for a still qualified buyer, as the dealership knows there will be less potential buyers and in theory should be more likely to work with a buyer to get their business), this still doesn't help with the supply/inventory side. At least in real estate, this contributes to the inflated home prices and values, and I would imagine this would be the same concept for the auto industry with elevated car pricing and values.
In regards to the 5.9% rate, was that the bank/lender talking or a car salesperson that gave you a random number? Especially in today's climate of a rate-rising environment, what you could do is go to your local bank and see if they have an option to do a soft-pull on your credit and see what you could qualify for in terms of loan amount and rate - that way, you have an idea of where you stand and not just relying on the F&I Manager of hopefully doing their job. Just keep in mind though that the F&I Manager may be able to offer a better rate through his lender network than what your bank/lender could offer (this is the reason for the soft-pull as you don't want your score potentially decreasing). Think of it this way: if you get pre-approved through your bank, you are a $29K customer vs the dealership being a $1 million+ customer to the bank, so who's more likely to get a better deal?
I come from mortgage lending, so things may be a bit different in auto lending. When it comes to rate, no bank/lender has a magical rate, and should be relatively the same across the board. For example, if you see 4 gas stations at an intersection, there is a good chance they may offer different pricing for gas, but by a few cents difference and not by a dollar - same principle with interest rates.
I will say that I think you do have some leverage to negotiate because you are going in with a trade-in and you have the potential to the dealership to be the starting domino effect of yielding multiple deals for them because of your trade-in.