this post was submitted on 07 Aug 2024
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[Dormant] Electric Vehicles
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One trick when buying any car is to arrange financing ahead of time.
Find the car. Negotiate a price. Get a Buyers Order. It will have all the fees and BS on it because of what happens next. Take the Buyers Order to the credit union. CU writes them a check, and they don't have an opportunity to add more fluff, or sell you financing.
You can often get pre-approved for a car loan up to a certain amount, and the bank will provide you a check that you can fill out up to that specified amount and make payable to the dealer. Basically, you can show up to the dealer pre-financed by a third party, do the deal, drive away, no need to make an extra trip out and back.
Or is it that the bank will deposit the money in your account, then you write the check from there, and return the vehicle purchase details to the bank within a certain time frame? I know we've done this a couple of times, but I forget exactly how the process plays out.
I’m the ‘car and tech guy’ for my family/friends, two most recent trips were cash buys… you can see the look on the salespeople’s faces drop when they find out they won’t get any finance commission.
You can also finance and pay off the loan early as well.
I've taken dealer financing on a car to lock in their lower offer and then paid it off in full the next month. No interest, no bullshitting around.
Just make sure there is no penalty for paying the loan off early. Check the actual contract.
I nearly did. this on my last car. A really good tip.
The 'trick' I'm getting at is to force them to give you an out-the-door price. If you walk in with a blank check, they're going to try and max it.
You don't tell them that you have financing already until you have a promised price on the vehicle you want.
This is actually a really good tip.
Car dealers try to present the transaction as "one thing" - purchase price, trade in, financing, warranty. They figure out which one of those things you are most sensitive to, and then give you a good deal on that part, making up the difference by not giving you a good deal on the other parts.
Even if you want to buy a car, with a trade in, and finance it, and you want an extended warranty (sometimes those can be okay, that's a whole other story that I am happy to talk about if anyone is interested) -- you should still go in and only talk about one thing at a time.
Zeroth step: If anything gives you pause anywhere along this process, walk. There's other cars, other dealers, other salespeople. Always be ready to stand up and leave, and don't just make empty threats.
First is to find a vehicle that suits your needs - something you would buy. Then get an "out the door" price on that vehicle. That price is going to include all the fees and taxes and registration, not just the purchase price of the vehicle.
Only after you have that in hand do you move to the next thing, and that would be trade-in. If you want any offer on a trade in vehicle, that vehicle will need to be at the dealer with you for them to inspect it. They're already eye-fucking the car you drove in, from the moment you came on the lot. In order to get that trade in offer, you will need to hand over your keys. Yes, your car is now a hostage to keep you in the dealership. "While they're checking your trade, why don't we talk about financing, warranty, accessories, pre-paid maintenance?" No. One thing at a time. You will refuse to talk about any other aspect of this transaction until your trade has been evaluated and a trade in price settled on. You may need to demand your own car back so that you can leave.
That's done, you have agreed on a trade in price (or you do not have a trade in), now you can talk about financing. If you intend to self finance, skip this step. Even if you do not intend to self finance, you should have done some research on what kind of rates you could get from a bank or credit union, otherwise you have no way of knowing whether what the finance office has to offer is competitive.
The finance office will also be the place where extended warranty is offered. In short, if the warranty offered is an exclusive warranty (covers everything except what's on a particular list), it might be worth it to you to get. An inclusive warranty "only covers what's on this list," and those are universally bad. Adding the warranty to the financing might affect your interest rate, but it shouldn't be by very much, if at all.
Make sure that you're satisfied with the condition of the car. Something doesn't work? Unsightly door dings? Ask if the dealer can take care of those. Maybe they will, maybe they won't, but you don't know until you ask. Paintless dent repair probably costs the dealer $25 per ding for their vendor to come do it, maybe they'll pass that along to you at cost to get the deal done. Anything the dealer promises to fix, they will write you a "We Owe" for. If it's not on paper, it's not going to happen.
All done, right? Nope. Now they will draw up the official paperwork for the transaction. Check every single line item on that sales contract to make sure they all match what you were promised. What's this extra fee for? Why is the price of the extended warranty $400 more than what you said? How come I'm being charged for dealer-added pinstripes when I never agreed to that? Remember the Zeroth Step? Be ready to walk. You've been in the dealer for hours now, and they're banking on you just being tired of going through this and wanting it to be over. Even if everything is correct, you can still walk at this point. Don't let your emotions get in the way.
Now you can sign the contract and drive off in your car.
Depends on the dealership. I went in and asked if I could get additional money off the car for using their financing. They say yes they gave a $1,000 credit.
I then asked how many payments did I need to make for them to get their full incentive for the loan. They said 6 months. I asked if I could pay it off after that, and they said sure, they'd have their kickback from the bank.
And that's what we did. It was a pretty frank conversation with the dealer, they were cool, we were cool.
You're more likely to get a better deal if you use their financing since they make money on that too, and they usually have competitive rates if you have good credit.
They shuffle numbers around to make it look good. They'll pad the price so they can show you a good rate. Why do you think they ask about financing so early in the process?
They're crooks, the lot of them. Never trust someone that can write numbers upside down.
They ask for financing early on so they don't waste time talking to someone who can't even buy a car. There are a lot of people who go look at cars that can't actually buy one.
You're right that they shuffle things around, but if you remove an entire revenue stream from the equation, you're going to get a worse price on the car than if you could get by financing through them. They can often offer the same rate that the credit union is offering, but they make a couple grand in kick-backs from the bank. They will sometimes use that kickback to offset the price of the car.