Current Events > dealerships aren't too happy with someone buying a car in cash

(+) Yeah! (+)

https://i.imgur.com/EUV7Qse.jpeg

They prefer it

how would you feel if someone walked into your dealership and had $23,340~ wanting to buy anew car?

They make more money on interest on payment plans

Of course they would prefer the extra margin that comes from a finance deal, but they're not exactly gonna refuse to take your money.

They lose money on card purchases. They are probably happier if you pay all with cash up front. Financing deals are always kind of a risk. If they have to repo, they will get back a car worth much less money than what it sold for originally.

what debit cards allow you to make a purchase of more than $10,000?

Dealerships (usually) don't even own the (new) cars.

They get them on loan (as capital) from the bank, per my understanding.

So, as long as they can make money to cover what they owe, plus cost of employee(s) and other general business overhead, I doubt they give a fuck how you pay.

The bank might prefer they get loans, especially if the person finances through the dealerships bank, but otherwise I doubt the dealership cares.

I bought a car last year, and the finance guy, somehow, came back with a more competitive rate offer through Honda Finance, so it actually worked out for me to go through the dealerships financing.

Otherwise I don't see how it matters to the dealership. If I get a loan for X amount of $, from my own bank, to cover the entire cost of what I owe the dealership, it isn't like they see the interest I would pay to my bank, and in essence would function as a cash transaction ultimately. Because my debt would no longer be with the dealership, but with my bank (who is using the car as collateral to cover my loan)

True in my country.
They have a deal with leasing companies that will make more profit for them.

I accompanied my cousin last year to buy a new motorcycle, but the first dealership we visited refused to full cash payment.

Ricemills posted...

True in my country.
They have a deal with leasing companies that will make more profit for them.

I accompanied my cousin last year to buy a new motorcycle, but the first dealership we visited refused to full cash payment.

Couldn't they have just matched half, get a loan for the other half then immediately pay off the loan?

Aside from the credit ding, you're essentially only adding a couple steps to the process.

What shady dealerships usually rely on is someone being an unreliable buyer and not being able to afford, so they wind up drowning in interest or not making payments and thus the dealership can go repo the car and start the process again on someone else

wackyteen posted...

Couldn't they have just matched half, get a loan for the other half then immediately pay off the loan?

Aside from the credit ding, you're essentially only adding a couple steps to the process.

What shady dealerships usually rely on is someone being an unreliable buyer and not being able to afford, so they wind up drowning in interest or not making payments and thus the dealership can go repo the car and start the process again on someone else

The minimum they offered was 12 monthly payment lease and they still charge full interest even if paid in advance.

Ricemills posted...

The minimum they offered was 12 monthly payment lease and they still charge full interest even if paid in advance.

Lmao trash

Yeah, I'd avoid a place like that

Yep, and iirc if you walk in and start off by announcing it they try to jack the price up. You might actually get a better price negotiation and then at the end say "I'm paying cash" and then they can't slap on fees, plans, etc.

I remember a few years ago when my parents bought a new car the dealer knocked 500 off the price for them giving a 5 star google review. They were very persistent in getting their 5 star review. I then decided to check out the reviews and it was literally like those bot reviews, which says a lot...

Beveren_Rabbit posted...

what debit cards allow you to make a purchase of more than $10,000?

You can split payment across multiple cards.

I work for a vehicle finance company. The dealers get a LOT more incentive if you finance vs paying in cash. They have absolutely given customers an extremely difficult yime trying to pay cash. They'll offer shit like rebates, very low apr, service contracts, discounts, whatever if you finance vs paying cash. They'll tell you to wait 3 months before paying it off because that's what locks in their incentives. But in reality you're allowed to pay it off whenever you want.

Simply put cash is absolutely no longer king.

But isn't it more beneficial for the consumers to pay the car off monthly rather than cashing it out?

Dealership make most of their gross profit in F&I. It's always better to negotiate making them think you'll finance and usually it's smarter to finance and then payoff 10 days later.

VeggetaX posted...

But isn't it more beneficial for the consumers to pay the car off monthly rather than cashing it out?

Case-by-case basis but generally no. Interest accumulating essentially is a poor tax. For vehicle contracts, no matter what the dealer lies to you, interest begins the moment you sign the contract.if you have a stupidpy low .9% apr you wont be bothered as much as someone with 3%+. If you have the cash to pay it off then you're better off doing that in the long run rather than paying extra for literally nothing.

Fable posted...

I work for a vehicle finance company. The dealers get a LOT more incentive if you finance vs paying in cash. They have absolutely given customers an extremely difficult time trying to pay cash. They'll offer shit like rebates, very low apr, service contracts, discounts, whatever if you finance vs paying cash. They'll tell you to wait 3 months before paying it off because that's what locks in their incentives. But in reality you're allowed to pay it off whenever you want.

Simply put cash is absolutely no longer king.

I most recently bought a car five years ago, and it was exactly as you said: They effectively made it so you lost money if you paid cash, and you could only put a fraction on a credit card (or cards). I put the remainder on the manufacturer's 0% intro-APR loan and paid it off with no penalty in three months, which they didn't care about at all. They just wanted that internal corporate incentive.

Kloe_Rinz posted...

They make more money on interest on payment plans

This. A friend's ex worked at a dealership and said they make more money on financing than the car.

Fable posted...

Case-by-case basis but generally no. Interest accumulating essentially is a poor tax. For vehicle contracts, no matter what the dealer lies to you, interest begins the moment you sign the contract.if you have a stupidpy low .9% apr you wont be bothered as much as someone with 3%+. If you have the cash to pay it off then you're better off doing that in the long run rather than paying extra for literally nothing.

And currently, minimum apr is at or close to 4%. So unless your funds are earning over 4%, is better to pay as much as you can, as soon as you can.

It just like you financed, from your own bank. They are missing out but normal.

I never finance anything, I always pay in full up front.

do you feel cool when you show up to a dealership with $20,000+ for a new vehicle?

do you think you're a cool person when you show up at a dealership with a big down payment?

Beveren_Rabbit posted...

do you think you're a cool person when you show up at a dealership with a big down payment?

I showed up with $10K to put down, but it wasn't in cash.

I didn't really feel cool, though. Mostly cause I knew I was getting an ultimately pretty raw deal since it was mid-end of Covid times and if I didn't buy the car, someone else would gladly so there wasn't even an opportunity to haggle or feign disinterest.

Can't you do like a cashier's check or something?

Tyranthraxus posted...

You can split payment across multiple cards.

We wrote a check

Beveren_Rabbit posted...

do you feel cool when you show up to a dealership with $20,000+ for a new vehicle?

yes

Beveren_Rabbit posted...

do you think you're a cool person when you show up at a dealership with a big down payment?

also yes

oh look, it's Mr. Bigshot coming in with a $10,000 downpayment and wants a 2 year payment plan, but pays it off early anyway.

Well that might be all he has saved and would want a better financing deal. I would do the same thing right now. I'm loking to buy but I dont ant to plop down 30k all in one shot. I'd say here is 10k, lets talk. It shows that first you are serious and not going to not make payments. Now if that money is in a bank be careful taking it out all at once.......if you know what I mean. Stupid law

What would they do if you paid in cash but the whole thing was in nickels?

Beveren_Rabbit posted...

do you feel cool when you show up to a dealership with $20,000+ for a new vehicle?

Calm down. It's not about being "cool."

divot1338 posted...

What would they do if you paid in cash but the whole thing was in nickels?

Give you a pickle