My New Car Buying Tips

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Leesbro63
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Re: My New Car Buying Tips

Post by Leesbro63 »

LadyGeek wrote: Thu Jan 02, 2020 6:46 am
Leesbro63 wrote: Thu Jan 02, 2020 5:57 am
LadyGeek wrote: Wed Jan 01, 2020 8:49 pm ...Mentioned earlier, I got a $1,000 price drop by financing part of the payment with Toyota Financial Services. (I split between cash and financing to get the $1,000).

I'm impressed with Toyota's online loan servicing, as the loan just showed up in my online account. It was very easy to setup a bank account and complete the payoff transaction. The payoff amount was calculated for the middle of the month.

I expect a check for the daily interest difference between now and then ($0.82 / day) and the title to be mailed to my house.

So, my price drop was actually $990 = $1,000 - $10 interest.
I did the same thing (also Toyota Financial) for a $500 saving three years ago. But I was told that I had to keep the loan for 90 days to avoid a clawback. Come to think of it, I never saw that in writing and I didn’t test it because the interest rate was close to zero...not enough dollars involved to get worked up about. But I’m curious if you’re sure it’s OK to payoff so soon (that you’re not risking your $1000 savings).
Interesting, as the finance manager told me to "make a few payments" before paying it off. My retail installment sale contract says "No prepayment penalty". Period. If there's a clawback, they'll have to show me where, exactly, it's stated in my contract.

The contract includes the $1,000 as a rebate. "Rebate" only appears in the contract as "rebate of finance charge", which has no relation to the promotional rebate incentive to finance the vehicle.

The contract is on Form "LAW® 553 Retail Installment Contract". Specifically, "553-PA-ARB-ea" for PA.
It will be useful if you post what happens. I'm guessing you'll never hear anything about the $1000, but if it does happen they'll apply your payoff then you'll still be showing $1000 due in your loan account online. But again, probably the right hand doesn't know what the left hand is doing and the $1000 rebate is applied at purchase, once the loan is approved, and that's the end of it.
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Re: My New Car Buying Tips

Post by LadyGeek »

The $1,000 was applied as a factory incentive / rebate at the time of purchase. That's a done deal. I'll post back here if anything unexpected happens (and when I get my title).
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Leesbro63
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Re: My New Car Buying Tips

Post by Leesbro63 »

LadyGeek wrote: Thu Jan 02, 2020 7:58 am The $1,000 was applied as a factory incentive / rebate at the time of purchase. That's a done deal. I'll post back here if anything unexpected happens (and when I get my title).
Thank you for doing that. I'm interested as I might be doing this again sometime soon.
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Re: My New Car Buying Tips

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LadyGeek wrote: Thu Jan 02, 2020 6:46 am
Leesbro63 wrote: Thu Jan 02, 2020 5:57 am I did the same thing (also Toyota Financial) for a $500 saving three years ago. But I was told that I had to keep the loan for 90 days to avoid a clawback. Come to think of it, I never saw that in writing and I didn’t test it because the interest rate was close to zero...not enough dollars involved to get worked up about. But I’m curious if you’re sure it’s OK to payoff so soon (that you’re not risking your $1000 savings).
Interesting, as the finance manager told me to "make a few payments" before paying it off. My retail installment sale contract says "No prepayment penalty". Period. If there's a clawback, they'll have to show me where, exactly, it's stated in my contract.

The contract includes the $1,000 as a rebate. "Rebate" only appears in the contract as "rebate of finance charge", which has no relation to the promotional rebate incentive to finance the vehicle.

The contract is on Form "LAW® 553 Retail Installment Contract". Specifically, "553-PA-ARB-ea" for PA.
There is generally no prepayment penalty as that would upset the vehicle financing market. Any financed car (loan/lease) can be totaled at any time, and therefore, there needs to be some level of liquidity in the loan asset. The same goes for mortgage loans.

In terms of the loan, yes, it's generally good to keep the loan for at least 90-120 days as dealers will be chargedback the incentives they are given for getting the car financed by a lender. That's why the whole PF thing of "Cash is king!" and "I'm paying cash so I have the most leverage" is about as real as a $3 dollar bill. The interest you pay on holding a loan for a few months is not that much.

The chargeback that is what the lending institution pays the dealer to be a preferential lender in the car deals. If Toyota is giving you $1,000 extra cash for financing, they're also likely giving a backend commission to the dealer --- however, if the buyer simply pays off the entire loan <90 days, the dealer loses their commission.

The stuff above is sometimes good to know/ask about when working a deal, because you don't know if you're leaving money on the table by simply paying cash. When you're dealing with the dealerships, viewing it as a 100% adversarial relationship that your number one goal is to extract as much from them as possible and leave as little money on the table as possible for them --- probably the wrong way to approach things. It's going to change the way you deal with them.


edit: revised comment --- I said something that I think is incorrect.
Last edited by Helo80 on Thu Jan 02, 2020 5:20 pm, edited 1 time in total.
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Helo80
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Re: My New Car Buying Tips

Post by Helo80 »

hudson wrote: Thu Jan 02, 2020 7:19 am
Helo80 wrote: Wed Jan 01, 2020 3:03 pm PF types
What are PF types? many thanks!

Personal Finance people.

If you ever want to throw a digital grenade on this forum, start talking cars. You'll find every school of thought in the world on car ownership here. Traditionally, PF types are very adversarial to car ownership as cars can be detrimental to long term wealth creation.
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Leesbro63
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Re: My New Car Buying Tips

Post by Leesbro63 »

Helo80 wrote: Thu Jan 02, 2020 10:37 am
LadyGeek wrote: Thu Jan 02, 2020 6:46 am
Leesbro63 wrote: Thu Jan 02, 2020 5:57 am I did the same thing (also Toyota Financial) for a $500 saving three years ago. But I was told that I had to keep the loan for 90 days to avoid a clawback. Come to think of it, I never saw that in writing and I didn’t test it because the interest rate was close to zero...not enough dollars involved to get worked up about. But I’m curious if you’re sure it’s OK to payoff so soon (that you’re not risking your $1000 savings).
Interesting, as the finance manager told me to "make a few payments" before paying it off. My retail installment sale contract says "No prepayment penalty". Period. If there's a clawback, they'll have to show me where, exactly, it's stated in my contract.

The contract includes the $1,000 as a rebate. "Rebate" only appears in the contract as "rebate of finance charge", which has no relation to the promotional rebate incentive to finance the vehicle.

The contract is on Form "LAW® 553 Retail Installment Contract". Specifically, "553-PA-ARB-ea" for PA.
There is generally no prepayment penalty as that would upset the vehicle financing market. Any financed car (loan/lease) can be totaled at any time, and therefore, there needs to be some level of liquidity in the loan asset. The same goes for mortgage loans.

In terms of the loan, yes, it's generally good to keep the loan for at least 90-120 days as dealers will be chargedback the incentives they are given for getting the car financed by a lender. That's why the whole PF thing of "Cash is king!" and "I'm paying cash so I have the most leverage" is about as real as a $3 dollar bill. The interest you pay on holding a loan for a few months is not that much.

The chargeback that is what the lending institution pays the dealer to be a preferential lender in the car deals. If Toyota is giving you $1,000 extra cash for financing, they're also likely giving a backend commission to the dealer --- however, if the buyer simply pays off the entire loan <90 days, the dealer loses their commission.

The stuff above is sometimes good to know/ask about when working a deal, because you don't know if you're leaving money on the table by simply paying cash. When you're dealing with the dealerships, viewing it as a 100% adversarial relationship that your number one goal is to extract as much from them as possible and leave as little money on the table as possible for them --- probably the wrong way to approach things. It's going to change the way you deal with them.
Interesting. So when the dealer says "make a few payments", he's really saying "PLEASE make a few payments. You can pay the loan off tomorrow and it won't affect you at all. But if you don't let the loan last for 90 days, we, the dealership, will get nicked for that $1000". If it were me and I knew that...and I now know it...I probably would let the loan last 90 days and not nick the dealer. Not that I have any love for the dealer, but it just seems wrong to nick them for $1000 if it costs me under $100 and was an understanding in my deal (that I'd get $1000 and the dealer wouldn't get nicked for it). I MIGHT say to the dealer, if I knew what I just learned ahead of time, that I'll promise not to pay off the loan if you throw in an extra set of mats or whatever $100 "gimme" I can get..to offset my interest cost for 90 days. But by the time you get to the financing desk another $100 either way probably isn't worth the hassle.

It will be interesting to see what happens once the dust settles on Ladygeeks loan payoff. I'm guessing nothing will happen, but as a Toyota product buyer, this is useful to learn about.
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Re: My New Car Buying Tips

Post by hudson »

Helo80 wrote: Thu Jan 02, 2020 10:39 am
hudson wrote: Thu Jan 02, 2020 7:19 am
Helo80 wrote: Wed Jan 01, 2020 3:03 pm PF types
What are PF types? many thanks!

Personal Finance people.

If you ever want to throw a digital grenade on this forum, start talking cars. You'll find every school of thought in the world on car ownership here. Traditionally, PF types are very adversarial to car ownership as cars can be detrimental to long term wealth creation.
Thanks Helo80! I prefer digital trial balloons.
Last edited by hudson on Thu Jan 02, 2020 3:45 pm, edited 1 time in total.
stilltrying
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Re: My New Car Buying Tips

Post by stilltrying »

Leesbro63 wrote: Thu Jan 02, 2020 1:16 pm
Helo80 wrote: Thu Jan 02, 2020 10:37 am
LadyGeek wrote: Thu Jan 02, 2020 6:46 am
Leesbro63 wrote: Thu Jan 02, 2020 5:57 am I did the same thing (also Toyota Financial) for a $500 saving three years ago. But I was told that I had to keep the loan for 90 days to avoid a clawback. Come to think of it, I never saw that in writing and I didn’t test it because the interest rate was close to zero...not enough dollars involved to get worked up about. But I’m curious if you’re sure it’s OK to payoff so soon (that you’re not risking your $1000 savings).
Interesting, as the finance manager told me to "make a few payments" before paying it off. My retail installment sale contract says "No prepayment penalty". Period. If there's a clawback, they'll have to show me where, exactly, it's stated in my contract.

The contract includes the $1,000 as a rebate. "Rebate" only appears in the contract as "rebate of finance charge", which has no relation to the promotional rebate incentive to finance the vehicle.

The contract is on Form "LAW® 553 Retail Installment Contract". Specifically, "553-PA-ARB-ea" for PA.
There is generally no prepayment penalty as that would upset the vehicle financing market. Any financed car (loan/lease) can be totaled at any time, and therefore, there needs to be some level of liquidity in the loan asset. The same goes for mortgage loans.

In terms of the loan, yes, it's generally good to keep the loan for at least 90-120 days as dealers will be chargedback the incentives they are given for getting the car financed by a lender. That's why the whole PF thing of "Cash is king!" and "I'm paying cash so I have the most leverage" is about as real as a $3 dollar bill. The interest you pay on holding a loan for a few months is not that much.

The chargeback that is what the lending institution pays the dealer to be a preferential lender in the car deals. If Toyota is giving you $1,000 extra cash for financing, they're also likely giving a backend commission to the dealer --- however, if the buyer simply pays off the entire loan <90 days, the dealer loses their commission.

The stuff above is sometimes good to know/ask about when working a deal, because you don't know if you're leaving money on the table by simply paying cash. When you're dealing with the dealerships, viewing it as a 100% adversarial relationship that your number one goal is to extract as much from them as possible and leave as little money on the table as possible for them --- probably the wrong way to approach things. It's going to change the way you deal with them.
Interesting. So when the dealer says "make a few payments", he's really saying "PLEASE make a few payments. You can pay the loan off tomorrow and it won't affect you at all. But if you don't let the loan last for 90 days, we, the dealership, will get nicked for that $1000". If it were me and I knew that...and I now know it...I probably would let the loan last 90 days and not nick the dealer. Not that I have any love for the dealer, but it just seems wrong to nick them for $1000 if it costs me under $100 and was an understanding in my deal (that I'd get $1000 and the dealer wouldn't get nicked for it). I MIGHT say to the dealer, if I knew what I just learned ahead of time, that I'll promise not to pay off the loan if you throw in an extra set of mats or whatever $100 "gimme" I can get..to offset my interest cost for 90 days. But by the time you get to the financing desk another $100 either way probably isn't worth the hassle.

It will be interesting to see what happens once the dust settles on Ladygeeks loan payoff. I'm guessing nothing will happen, but as a Toyota product buyer, this is useful to learn about.
I just purchased a new car, and was offered $1500 incentive to finance. The finance manager requested I keep the line open 6 months as I had expressed that I wanted to pay the loan off next month. She stressed that the loan charged basic interest, so I can pay a large lump sum in the first month, leaving almost no principal against which to charge interest. I’m amenable to that.
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Re: My New Car Buying Tips

Post by LadyGeek »

Helo80 wrote: Thu Jan 02, 2020 10:37 am ...There is generally no prepayment penalty as that would upset the vehicle financing market. Any financed car (loan/lease) can be totaled at any time, and therefore, there needs to be some level of liquidity in the loan asset. The same goes for mortgage loans.
Sorry, I don't quite follow. Are you saying there's no prepayment penalty because the asset (house or car) can be lost at any time before the loan is paid off, therefore the borrower should not be penalized to fulfill the loan terms early? An example with an explanation would be helpful.

============
Regarding dealer chargeback, I'm finding a lot of info via google "auto loan chargeback dealer". It's a view of the industry I never knew about.

Acronym decoder: "F & I" refers to Finance and Insurance products.
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Helo80
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Re: My New Car Buying Tips

Post by Helo80 »

Leesbro63 wrote: Thu Jan 02, 2020 1:16 pm Interesting. So when the dealer says "make a few payments", he's really saying "PLEASE make a few payments. You can pay the loan off tomorrow and it won't affect you at all. But if you don't let the loan last for 90 days, we, the dealership, will get nicked for that $1000". If it were me and I knew that...and I now know it...I probably would let the loan last 90 days and not nick the dealer.

Correct --- and it's a moral/ethical decision you have to make and less of a legal one.

I don't appreciate all of the sales pressure of the Finance Manager's office, but once it's over, it's over and I usually am comfortable with letting the dealer make their money on the backend via financing if I go that route.

(note: For mortgage brokers, it is very similar. I asked about how aggressively I could pay down the mortgage in regards to pre-payment penalties. There were no pre-payment penalties, but I was asked to kindly not do that as otherwise the lender will reverse the commission the broker gets on the transaction)
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Helo80
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Re: My New Car Buying Tips

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LadyGeek wrote: Thu Jan 02, 2020 4:12 pm
Helo80 wrote: Thu Jan 02, 2020 10:37 am ...There is generally no prepayment penalty as that would upset the vehicle financing market. Any financed car (loan/lease) can be totaled at any time, and therefore, there needs to be some level of liquidity in the loan asset. The same goes for mortgage loans.
Sorry, I don't quite follow. Are you saying there's no prepayment penalty because the asset (house or car) can be lost at any time before the loan is paid off, therefore the borrower should not be penalized to fulfill the loan terms early? An example with an explanation would be helpful.

I think it's more of a courtesy thing now in order to keep financees happy. Though, I think this starts going into the weeds on financing and lending theory, and I am not well-versed on it, though I've heard a compelling argument at work from somebody who knows more on the issue.

Now that I think of it, I think that I may have gotten the wording wrong up there which is why you're not following --- I think that there is reason why pre-payment penalties do exist within financing. I believe that sometime in the housing bubble burst, legislation was passed such that pre-payment penalties in mortgages was made illegal and while it superficially sounds good, it upsets the backend for the following example:

Imagine the BH community decides to go out and take 15 year fixed interest home loans at say 4% and it's packaged into a bond that is then sold to an investor at 3%. The good little BHs pay their mortgage loans off over a 15 year period, and said investor receives his/her 3% return over a 15 year period. However, imagine the entire BH community decides to pay off their loans within 2 years --- suddenly, the investor accepted a financial product at a 3% ROI over 15 years and is now left with nothing. Or, at least 3% over a 2 year period.
Last edited by Helo80 on Thu Jan 02, 2020 5:28 pm, edited 1 time in total.
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Re: My New Car Buying Tips

Post by rich126 »

I don't know how it works with new cars but I used to talk with a used car salesman (about 10 years ago) and he would get various bonuses. Bonuses were based on reaching a sales milestone (I think 8 in a month), extended warranties and financing.
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Re: My New Car Buying Tips

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rich126 wrote: Thu Jan 02, 2020 5:20 pm I don't know how it works with new cars but I used to talk with a used car salesman (about 10 years ago) and he would get various bonuses. Bonuses were based on reaching a sales milestone (I think 8 in a month), extended warranties and financing.

Payment plans at dealerships and autogroups is 100% variable and dependent upon said dealership or autogroup.

Generally speaking, at most branded use car lots (e.g. Ford of Boglehead), the Finance Manager is the one that handle EWs and financing. The salesmen simply are responsible for showing the customer the car, and representing the customer to the Sales Manager who okays or nicks the deal.

Finance Managers tend to being doing well for themselves as they've gone through the ropes of car sales and have a proven sales record, and hence are rewarded for said effort by a more predictable work schedule and the opportunity to sell stuff like EWs, tire/paint/wear and tear/etc protections/prepaid maintenance, etc. In new car sales, this is where most of the money is made now --- on the backend. On the front end, it's minimal as competition is mighty with the internet, invoice pricing, cross-shopping etc.
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Re: My New Car Buying Tips

Post by LadyGeek »

I had earlier decided to purchase the tire and wheel replacement package:
LadyGeek wrote: Sun Dec 22, 2019 8:19 pm ...He then pitched a tire and wheel protection package. Those RAV4 wheels are made from aluminum, they're fragile and could cost you $1600 to replace (I had to keep from laughing). For only $1495, you'll save the cost of the package the first time around. This got my attention, as it was unlimited replacement, no pro-rating, for tire and wheel damage. I've ruined wheels on potholes, and was thinking I might go for it. He also pitched that 92% of customers buy this package (the "herd mentality" pitch - go with the crowd).

So, I declined both packages. An instant "I'll give you the tire package for 5 years at $995." Can you go lower? No. OK, I'll take it.
Now that the dust has settled, I did some research on 2020 RAV4 wheel replacement. The 17" wheels are less than $300 at TireRack. Tires run around $200. I'm thinking $600 to replace a tire and wheel. My thoughts are to cancel the tire and wheel package and get my money back.

The tire and wheel service agreement says I can cancel within 30 days for a 100% refund. However... there's a catch. Lienholders (it's financed) have a say on this agreement. Unless the owner has a "Release of Lien", I can't get my money back. Toyota is certainly not going to cancel the agreement unless the vehicle has been totaled or repossessed.

Revision 1/14/20: You can get a refund, but it will be pro-rated after 30 days with a $25 processing fee. Unless you have a "Release of Lien" (loan is paid off), the refund will be paid to Toyota Financial Services (or split between you and Toyota).

The balance due on my Toyota loan is now zero. I'm hoping I get my title before the 30 days is up.

Revision 1/14/20: The Release of Lien will arrive before the title. That's all you need to cancel the agreement.

Tip: Financing your vehicle has an impact on the ability to cancel the add-on packages. Read the complete paperwork in full before signing. I didn't and was lucky to find the 30-day cancellation procedure.

Revision 1/14/20: You can cancel the package, but you will not get the full purchase price after 30 days.
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Re: My New Car Buying Tips

Post by UpperNwGuy »

I am planning to buy at RAV4 in a few months, so reading LadyGeek's story has been quite informative.
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Re: My New Car Buying Tips

Post by JAZZISCOOL »

LadyGeek wrote: Sat Jan 04, 2020 2:31 pm I had earlier decided to purchase the tire and wheel replacement package:
LadyGeek wrote: Sun Dec 22, 2019 8:19 pm ...He then pitched a tire and wheel protection package. Those RAV4 wheels are made from aluminum, they're fragile and could cost you $1600 to replace (I had to keep from laughing). For only $1495, you'll save the cost of the package the first time around. This got my attention, as it was unlimited replacement, no pro-rating, for tire and wheel damage. I've ruined wheels on potholes, and was thinking I might go for it. He also pitched that 92% of customers buy this package (the "herd mentality" pitch - go with the crowd).

So, I declined both packages. An instant "I'll give you the tire package for 5 years at $995." Can you go lower? No. OK, I'll take it.
Now that the dust has settled, I did some research on 2020 RAV4 wheel replacement. The 17" wheels are less than $300 at TireRack. Tires run around $200. I'm thinking $600 to replace a tire and wheel. My thoughts are to cancel the tire and wheel package and get my money back.

The tire and wheel service agreement says I can cancel within 30 days for a 100% refund. However... there's a catch. Lienholders (it's financed) have a say on this agreement. Unless the owner has a "Release of Lien", I can't get my money back. Toyota is certainly not going to cancel the agreement unless the vehicle has been totaled or repossessed.

The balance due on my Toyota loan is now zero. I'm hoping I get my title before the 30 days is up.

Tip: Financing your vehicle has an impact on the ability to cancel the add-on packages. Read the complete paperwork in full before signing. I didn't and was lucky to find the 30-day cancellation procedure.
Thanks. Good tip to remember. :happy
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Re: My New Car Buying Tips

Post by tc101 »

A few days ago, I wrote:
I tried the technique in the original post of this thread. I contacted the 5 dealers closest to me. Only 1 responded with a price. After repeated requests from the others for a phone call or visit to their show room, and repeated insistence by me that they email me an OTD price, one other dealer sent me a price, but it was absurdly high.

So now I have two prices. One is high and the other is absurdly high. The other 3 dealers have totally refused to give me an OTD price with email, just insisting that they will give me a great price if I just talk to them on the phone or visit their showroom.

So I am wondering if the technique given in the original post really works?

Maybe this is the busiest time of the year for car dealers and I should wait a few weeks and try again.
So now that the Christmas and year end rush is over, I have suddenly gotten some reasonable prices from some dealers. Maybe the technique does work when business is slow.
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Re: My New Car Buying Tips

Post by A440 »

For forum members who purchased a vehicle in December. Anyone ask for one of those big Christmas bows they put on the cars in the showroom?

I asked for one in jest and I was told by my sales rep that they cost $400. :shock:
I didn't push for one to be included with my purchase, but found that price a little incredible. 😁
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Re: My New Car Buying Tips

Post by smackboy1 »

I just bought an Acura. I could have paid all cash, but there was a $1500 credit if financed through Acura. I talked to the finance person and found out the minimum loan required to get the incentive. Then I told him I was only financing to get the incentive and I was going to prepay the entire loan ASAP. He told me that I should keep the loan for not less than 91 days to avoid Acura clawing back the $1500 credit. He did say that the dealership would have to pay it, not me, the customer, but if people did that, the dealerships would stop passing through the savings to customers. He recommended I pay the loan over 3 payments like this to minimize the amount of interest:

1st payment - normal payment
2nd payment - pay off everything except $4-500
3rd payment (at least 91 days after purchase) - pay off the remaining balance and retire the loan

Don't ask the saleperson about how to take advantage of the financing, they are clueless. I got different answers from different salespeople. Ask the financing person.
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.
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Re: My New Car Buying Tips

Post by Leesbro63 »

smackboy1 wrote: Mon Jan 06, 2020 5:05 pm I just bought an Acura. I could have paid all cash, but there was a $1500 credit if financed through Acura. I talked to the finance person and found out the minimum loan required to get the incentive. Then I told him I was only financing to get the incentive and I was going to prepay the entire loan ASAP. He told me that I should keep the loan for not less than 91 days to avoid Acura clawing back the $1500 credit. He did say that the dealership would have to pay it, not me, the customer, but if people did that, the dealerships would stop passing through the savings to customers. He recommended I pay the loan over 3 payments like this to minimize the amount of interest:

1st payment - normal payment
2nd payment - pay off everything except $4-500
3rd payment (at least 91 days after purchase) - pay off the remaining balance and retire the loan

Don't ask the saleperson about how to take advantage of the financing, they are clueless. I got different answers from different salespeople. Ask the financing person.
He was honest with you. If it were me, I’d do what he suggested. I see no reason to hurt the dealer just to hurt the dealer and/or to save a very small amount of money
Last edited by Leesbro63 on Mon Jan 06, 2020 5:50 pm, edited 1 time in total.
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Re: My New Car Buying Tips

Post by hudson »

Leesbro63 wrote: Mon Jan 06, 2020 5:21 pm
smackboy1 wrote: Mon Jan 06, 2020 5:05 pm He recommended I pay the loan over 3 payments like this to minimize the amount of interest:
I’d do what he suggested. I see no reason to hurt the dealer just to hurt the dealer and/or to save a very small amount of money
I agree. If I took the incentive, I would keep the loan long enough.

I hope that I am always honest and straightforward with dealers...no playing games; I expect the same of the dealers, manufacturers, and everyone in between.
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Re: My New Car Buying Tips

Post by JAZZISCOOL »

hudson wrote: Mon Jan 06, 2020 5:33 pm
Leesbro63 wrote: Mon Jan 06, 2020 5:21 pm
smackboy1 wrote: Mon Jan 06, 2020 5:05 pm He recommended I pay the loan over 3 payments like this to minimize the amount of interest:
I’d do what he suggested. I see no reason to hurt the dealer just to hurt the dealer and/or to save a very small amount of money
I agree. If I took the incentive, I would keep the loan long enough.

I hope that I am always honest and straightforward with dealers...no playing games; I expect the same of the dealers, manufacturers, and everyone in between.
+1
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Re: My New Car Buying Tips

Post by stilltrying »

smackboy1 wrote: Mon Jan 06, 2020 5:05 pm I just bought an Acura. I could have paid all cash, but there was a $1500 credit if financed through Acura. I talked to the finance person and found out the minimum loan required to get the incentive. Then I told him I was only financing to get the incentive and I was going to prepay the entire loan ASAP. He told me that I should keep the loan for not less than 91 days to avoid Acura clawing back the $1500 credit. He did say that the dealership would have to pay it, not me, the customer, but if people did that, the dealerships would stop passing through the savings to customers. He recommended I pay the loan over 3 payments like this to minimize the amount of interest:

1st payment - normal payment
2nd payment - pay off everything except $4-500
3rd payment (at least 91 days after purchase) - pay off the remaining balance and retire the loan

Don't ask the saleperson about how to take advantage of the financing, they are clueless. I got different answers from different salespeople. Ask the financing person.
Mine was an Acura too. I was told six months to avoid the dealer clawback. A regional variance perhaps? I’m in the NE.
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Re: My New Car Buying Tips

Post by LadyGeek »

I have corrected my previous post regarding the Tire and Wheel Protection package agreement terms:
LadyGeek wrote: Sat Jan 04, 2020 2:31 pm I had earlier decided to purchase the tire and wheel replacement package:
LadyGeek wrote: Sun Dec 22, 2019 8:19 pm ...He then pitched a tire and wheel protection package. Those RAV4 wheels are made from aluminum, they're fragile and could cost you $1600 to replace (I had to keep from laughing). For only $1495, you'll save the cost of the package the first time around. This got my attention, as it was unlimited replacement, no pro-rating, for tire and wheel damage. I've ruined wheels on potholes, and was thinking I might go for it. He also pitched that 92% of customers buy this package (the "herd mentality" pitch - go with the crowd).

So, I declined both packages. An instant "I'll give you the tire package for 5 years at $995." Can you go lower? No. OK, I'll take it.
Now that the dust has settled, I did some research on 2020 RAV4 wheel replacement. The 17" wheels are less than $300 at TireRack. Tires run around $200. I'm thinking $600 to replace a tire and wheel. My thoughts are to cancel the tire and wheel package and get my money back.

The tire and wheel service agreement says I can cancel within 30 days for a 100% refund. However... there's a catch. Lienholders (it's financed) have a say on this agreement. Unless the owner has a "Release of Lien", I can't get my money back. Toyota is certainly not going to cancel the agreement unless the vehicle has been totaled or repossessed.

Revision 1/14/20: You can get a refund, but it will be pro-rated after 30 days with a $25 processing fee. Unless you have a "Release of Lien" (loan is paid off), the refund will be paid to Toyota Financial Services (or split between you and Toyota).

The balance due on my Toyota loan is now zero. I'm hoping I get my title before the 30 days is up.

Revision 1/14/20: The Release of Lien will arrive before the title. That's all you need to cancel the agreement.

Tip: Financing your vehicle has an impact on the ability to cancel the add-on packages. Read the complete paperwork in full before signing. I didn't and was lucky to find the 30-day cancellation procedure.

Revision 1/14/20: You can cancel the package, but you will not get the full purchase price after 30 days.
The "Release of Lien", an original notarized letter, arrived a few days ago. I went to the dealer today with the letter in hand, not to mention a printout of the contract (first page and the page containing the cancellation procedure).

The finance manager briefly asked why I had paid the loan off before making 3 payments. I stated that I didn't remember that part of the conversation (honestly, I didn't remember). She then proceeded blame the sales department for not making that point clear. It can't be put in writing. I was told "Don't worry about it". OK, I'm not worried about their chargeback.

She then explained that I should reconsider the cancellation. After all, she used it 3 times in the last several years - for multiple cars. No, let's cancel. After I clarified that the refund is not pro-rated (showing her the contract), we completed an "Agreement Cancellation Request Form". I'll be getting a refund check within 60 - 90 days. This means I'll get the refund check on Day 90.
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Re: My New Car Buying Tips

Post by LadyGeek »

On the same day I received my "Release of Lien", I also received an unexpected check for close to $500. Why? They accidentally charged me 8% sales tax instead of 6% (PA is 6%). :shock:

I asked the finance manger how could that possibly happen, since everything is done by software? Nope, it's a manual process, they just check it.

So, I have a 2020 refund for a 2019 itemized deduction. That's 2020 income on my tax return, a.k.a. recovery. Publication 525 (2018), Taxable and Nontaxable Income
Recoveries

A recovery is a return of an amount you deducted or took a credit for in an earlier year. The most common recoveries are refunds, reimbursements, and rebates of itemized deductions. You also may have recoveries of nonitemized deductions (such as payments on previously deducted bad debts) and recoveries of items for which you previously claimed a tax credit.
I'll start a separate thread if I need tax help.
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Re: My New Car Buying Tips

Post by A440 »

Edited: Thank you Grabiner for the correction :happy That's why it is great having knowledgeable people on this forum.

For folks who purchased a vehicle in 2019, see if the tax you paid on your sales tax is greater than the amount of income tax paid to the state. If you itemize, it might help.
Last edited by A440 on Sun Jan 26, 2020 12:49 pm, edited 1 time in total.
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Re: My New Car Buying Tips

Post by grabiner »

A440 wrote: Sun Jan 26, 2020 11:16 am I'm not a tax pro, but for folks who purchased a new car in 2019, you might do better itemizing this year vs. taking the standard deduction because of the tax you paid on your vehicle.
This is not likely to be useful. You can deduct either income tax or sales tax, but not both. If the $3K tax on a car, plus other sales taxes, is more than your state income tax (which could happen in a state without income tax), you would need to donate a lot to charity to exceed the standard deduction.
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Re: My New Car Buying Tips

Post by LadyGeek »

grabiner is correct. I just checked my H&R Block Schedule A itemized deductions worksheet. Line 5a says "You may include either income taxes or general sales taxes on line 5a, but not both". The software does indeed pick the highest of the two.

Regarding my earlier post for a 2020 refund for a 2019 itemized deduction, I'll reduce my 2019 sales tax by the reimbursed amount instead of claiming it as income on my 2020 return. Since I haven't filed my 2019 return yet, I can do this. (If I'm wrong, someone please let me know.)

On a minor point, charities are not the only area which can be used to increase your itemized deductions. Qualified medical expenses over 10% 7.5% AGI are another.

Update: Corrected medical expense AGI (Adjusted Gross Income) threshold. It's 7.5% in 2019, 10% in 2020.
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Re: My New Car Buying Tips

Post by JAZZISCOOL »

LadyGeek wrote: Sun Jan 26, 2020 12:32 pm grabiner is correct.
On a minor point, charities are not the only area which can be used to increase your itemized deductions. Qualified medical expenses over 10% AGI are another.
Thanks, LadyGeek, but I wanted to confirm the medical deduction % as I thought it was changed with the Dec. 2020 legislation:

"Re: Tax Law Changes for 2020
Post by changingtimes » Sat Dec 21, 2019 7:27 am

Yay, they cut the medical deduction mark back down to 7.5%! I wasn't going to hit 10%, but I did hit 7.5%. That'll show Uncle Sam! 😁"

Thanks! :happy
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Re: My New Car Buying Tips

Post by LadyGeek »

^^^ Yes, it did. Thanks, I have revised my post. (7.5% in 2019, 10% in 2020)
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Re: My New Car Buying Tips

Post by Bigj5t4n »

Hi all,

Thanks for such a great thread.

I am looking to purchase a 2020 Honda Accord. I have been emailing the following to dealers:

"I am looking to purchase this car, specifically VIN: Stock# on your lot. I am soliciting multiple dealers for the best price. Please submit your best bid OTD for this car.

If the specific car is not available please submit your best bid OTD for an accord LX, 1.5T CVT. No color or additional option preferences above base options.

I will be soliciting these bids and will communicate exclusively via email. Thank you in advance."

Was hoping to get opinions for some of the more experienced car buyers on how much I can expect to negotiate for a higher volume car such as the base model accord.

Invoices I have found online hover around $21,900. Trying to get a handle on what I can expect as a reasonable % below invoice in order to determine how much to ask the dealers to beat my best quote in a second round of emails.

Any thoughts?

Regards,
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Re: My New Car Buying Tips

Post by hudson »

Bigj5t4n,

Let us know how it goes.
Some dealers have gotten too many emails and don't know which ones are serious. It depends, you might hit a good "email" dealer.
I like to do the same as you're doing by phone. I don't tell them my plan. I just try to establish that I'm a serious buyer who's going to buy a vehicle in x number of days. I tell the person that I'm talking to that I want to deal with him or her and I need their preferred contact information...and their backup person if he/she isn't available. I ask for an OTD price for a specific model....I haven't given a VIN...but that's not a bad idea. With a VIN, they can quickly figure out what you want. I don't do any talk of bids or re-bids....but of course, I'm going to call him/her back if the give me an OTD price.
If emails work, good; if not, consider trying the personal touch. I've bought 5 vehicles using a version of your method; I've given out my cell number, home address, and main email each time....with zero problems.
All they have to do to sell me a vehicle is talk to me a few times on the phone for a very few minutes; they do have to have the lowest OTD price.
I've found that the largest dealers in my area don't want to play the bid game; they may not even give me a price. That's OK; I've always found other dealers that will adjust prices to sell a vehicle. You'll never know unless you call.
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Re: My New Car Buying Tips

Post by Bigj5t4n »

Got quotes from a few dealers, but I think I may have not done the best online negotiation.

Took lower quote from dealer #1, and email dealer #2: I have a quote for $X, can you beat it by $300.

Response was to send them the written quote from the other dealer. Of course all quotes up to this point have been via email.

I sent them a screenshot without identifying info of the other dealer. I feel like it will be too easy for them to imply the other quote is not legitimate, and refuse to deal.

Also wondering about saying the other dealer price so quickly.
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Re: My New Car Buying Tips

Post by hudson »

Bigj5t4n wrote: Mon Feb 03, 2020 8:09 pm Got quotes from a few dealers, but I think I may have not done the best online negotiation.

Took lower quote from dealer #1, and email dealer #2: I have a quote for $X, can you beat it by $300.

Response was to send them the written quote from the other dealer. Of course all quotes up to this point have been via email.

I sent them a screenshot without identifying info of the other dealer. I feel like it will be too easy for them to imply the other quote is not legitimate, and refuse to deal.

Also wondering about saying the other dealer price so quickly.
I don't ever name a price; I let the dealer name the price. If they ask me how much I would pay, I give a non-answer. I wait for them to name the price.
I trust them until I learn differently; I expect them to trust me; I am truthful. No one has ever asked me for a copy of a quote; if they did, I would politely refuse. I also don't give any information out about other dealers except for the OTD price that I get. The price that I tell other dealers is 100% truthful; I don't play any games.
If they imply that the quote is not legitimate and refuse to deal, that's fine. I'll thank them for talking to me and move on to another dealer. There are many dealers.
Consider taking a look at James Bragg's Fighting Chance website; I use his service whenever I buy a new vehicle.

I usually make from 5-10 initial calls. I tell the salesperson that I'm a serious buyer, and I'm going to buy a car in say 2 days. The dealers that give me an OTD price get a second round call. I'll say, I found this price on vehicle X; I'll probably buy that one. Then I don't say a word; the salesperson knows what he/she needs to do to stay involved without any gabbing from me. After round two, I'm usually down to 3 dealers. I'll call each using the round 2 statement. They know what to do. Round 3 is my last round....I'll usually tell all 3 that I'm going to make a final decision in x number of hours. I can do the entire process in a day...sometimes 2.

If they don't trust me, I take it that they don't want to deal, and I mark them off.
I've never had that come up. I've had lots of dealers that didn't want to deal...but not because of a trust issue.
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Re: My New Car Buying Tips

Post by venus_06 »

This thread has been very educating as I’m trying to negotiate buying a new RAV4. I’ve run into this issue as I’m negotiating over email: there are no base models for the basic trim in my area, they all have ~$500-1000+ Manufacturer add-on packages for cargo liners, guards, cargo rack etc. I was unable to find any bare models within my zip code on the Toyota website either. I was told by more than 1 dealer that the add-ons are quite common and it may be difficult to find one exactly the way I’d like it. This also makes comparing OTD quotes quite difficult, as some just start with a higher MSRP as they have all the bells and whistles and some have fewer additions. It seems like I have to find which dealer has a more basic model in stock, and not left with much room for negotiation. Am I doing this wrong? Would love to hear your suggestions.
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Re: My New Car Buying Tips

Post by tibbitts »

venus_06 wrote: Sun Jun 28, 2020 11:50 am This thread has been very educating as I’m trying to negotiate buying a new RAV4. I’ve run into this issue as I’m negotiating over email: there are no base models for the basic trim in my area, they all have ~$500-1000+ Manufacturer add-on packages for cargo liners, guards, cargo rack etc. I was unable to find any bare models within my zip code on the Toyota website either. I was told by more than 1 dealer that the add-ons are quite common and it may be difficult to find one exactly the way I’d like it. This also makes comparing OTD quotes quite difficult, as some just start with a higher MSRP as they have all the bells and whistles and some have fewer additions. It seems like I have to find which dealer has a more basic model in stock, and not left with much room for negotiation. Am I doing this wrong? Would love to hear your suggestions.
I would say there are certain features I want, and would consider offers for any car that has that set of features at least. If it had more, fine, I'd look at what I was getting vs. the out-the-door price. I wouldn't eliminate a car just because more items than I absolutely required were included. If the added items don't have any value to you that's fine, you can still decided whether to buy based on the price. I suppose you could price ordering a car and compare that price too.

Also I don't really understand a Boglehead worrying much about buying such a basic car, since most keep cars nearly forever, barring accidents. For me I wouldn't necessarily keep a car that long but still wouldn't want too basic of a model - missing little features would annoy me over even a shorter period of time. Relative to the portfolios of most Bogleheads, I think too much is made of saving a few thousands dollars on buying a car. I really think it's more of a hobby thing to Bogleheads ... it's like a game they want to win, it really doesn't make a practical financial difference.
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Re: My New Car Buying Tips

Post by hudson »

venus_06 wrote: Sun Jun 28, 2020 11:50 am This thread has been very educating as I’m trying to negotiate buying a new RAV4. I’ve run into this issue as I’m negotiating over email: there are no base models for the basic trim in my area, they all have ~$500-1000+ Manufacturer add-on packages for cargo liners, guards, cargo rack etc. I was unable to find any bare models within my zip code on the Toyota website either. I was told by more than 1 dealer that the add-ons are quite common and it may be difficult to find one exactly the way I’d like it. This also makes comparing OTD quotes quite difficult, as some just start with a higher MSRP as they have all the bells and whistles and some have fewer additions. It seems like I have to find which dealer has a more basic model in stock, and not left with much room for negotiation. Am I doing this wrong? Would love to hear your suggestions.
I've tried to do the bare model method before; it won't work; there aren't any bare bones models.
I would just check into what's available. If you're going to get bids, go for something that's common or close among dealers and go from there.
You may have plenty of room for negotiations or not. If you are buying a vehicle that's scarce or in heavy demand, it's harder. If you are looking for a vehicle that every dealer has a lot of, negotiations are more in your favor.
In 1969, I went to buy a VW Beetle. They were in high demand. There were no negotiations; you just paid what the dealer asked or you bought something else.

I don't negotiate using email; I just pick up the phone and call away.

I would use the phone a lot when I'm checking around...before starting any negotiations. I like the instant back and forth communication of a phone.
I would keep the contact info of who I called, so I could call that person back. I want them to know me and know that I will soon become a serious buyer.
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Re: My New Car Buying Tips

Post by LadyGeek »

Another thing to consider is that COVID-19 has disrupted the supply chain. Long story short is that you get what the dealer has in stock - which may include a premium due to a short supply.

This thread contains my 2020 RAV4 buying experience, which was before COVID-19. My posts start here. Later in the thread, I paid off my loan and got a refund on the tire + wheel protection package.
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Re: My New Car Buying Tips

Post by BeneIRA »

tibbitts wrote: Sun Jun 28, 2020 1:29 pm Also I don't really understand a Boglehead worrying much about buying such a basic car, since most keep cars nearly forever, barring accidents. For me I wouldn't necessarily keep a car that long but still wouldn't want too basic of a model - missing little features would annoy me over even a shorter period of time. Relative to the portfolios of most Bogleheads, I think too much is made of saving a few thousands dollars on buying a car. I really think it's more of a hobby thing to Bogleheads ... it's like a game they want to win, it really doesn't make a practical financial difference.
Counter-point: My last two cars were the absolute bare bones and I was perfectly happy. It was a point A to B appliance for me and I didn't value the premium of the higher trims. Looking back, I have no regrets not going with the higher trims. I like very much that if someone scratches it in a parking lot or rams their cart into it (has happened more than once), I get over it quickly. If I had spent more on a higher trim, I might think it was more fragile and let those things get to me more.

To Your Point: My current car, a Civic LX with nothing special, while it does the job, the seat comfort could be better. I have dealt with it for quite a few miles, but 20/20 hindsight, it would have been fine to pay a few thousand extra and get the leather seats and such. Not a life changer, but to your point, I may have been picking up pennies that didn't matter in the grand scheme of things just to be frugal.
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Re: My New Car Buying Tips

Post by RetiredCSProf »

I read through this thread and found it helpful. I'm undecided between taking a lease-buyout on my current car or purchasing a newer model of the same car. The pandemic has put a hold on the process -- I'm waiting for a new car to arrive at the lot. Either way, I plan to finance a portion of the purchase price.

On a new car purchase, to get the incentives (cash off the MSRP), I would need to finance through the dealer. If I refinance at my CU within 90 days of purchase, the CU will consider it a new car, and their interest rate may be lower than the dealership. Reading through this post, I see that the dealer may pressure me to keep the loan past 90 days.
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Re: My New Car Buying Tips

Post by hudson »

RetiredCSProf wrote: Tue Jun 30, 2020 10:57 pm I read through this thread and found it helpful. I'm undecided between taking a lease-buyout on my current car or purchasing a newer model of the same car. The pandemic has put a hold on the process -- I'm waiting for a new car to arrive at the lot. Either way, I plan to finance a portion of the purchase price.

On a new car purchase, to get the incentives (cash off the MSRP), I would need to finance through the dealer. If I refinance at my CU within 90 days of purchase, the CU will consider it a new car, and their interest rate may be lower than the dealership. Reading through this post, I see that the dealer may pressure me to keep the loan past 90 days.
RetiredCSProf,
Consider getting the final OTD price before discussing finance options.
I'm sure that you'll already have the deal with the CU ready to use if needed.
Take the deal that you like best. If I took out a loan from a dealer, I would strongly consider keeping it long enough for them to get their incentive. I would also want to know exactly what the loan contract said about paying off the loan early.

Dealer Pressure: Before I put down a deposit or go to a dealership to close on a new car, I'm going to have an agreement that the finance person in the back room does not spend more than 30 seconds trying to sell me any thing additional. They are welcome to lay out all of their up-sells in 30 seconds. My answer is always, "No thanks." If there is dealer pressure, I walk.
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Re: My New Car Buying Tips

Post by RetiredCSProf »

Hudson, It's been 23 years since I last purchased a car.

I think the out-the-door (OTD) price is calculated from:
1) MSRP (includes destination fee and any factory-installed upgrades),
2) less a negotiated discount (maybe in the range of 5-10% off MSRP, depending on supply-demand),
3) less dealer incentives (e.g., "loyalty incentive," APR incentive, recent college graduate incentive) -- contingent on dealer financing
4) sales tax on the sales price (MSRP minus discount and incentives) -- 9.5% in my area
5) license and registration fee ($588 in my area)

If I negotiate a deal that assumes dealer financing, I don't understand how I can expect the salesperson to give me the same OTD price without the dealer incentives. What am I missing?
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Re: My New Car Buying Tips

Post by hudson »

RetiredCSProf,

New car dealers and used car dealers are all experts on the out the door (OTD) price.
You do not have to worry about the details, just ask for it. I don't care what is in the OTD price. I don't even analyze what's in it. I just know that when I decide on the final purchase, that's what I'm paying. I compare dealer to dealer with the OTD price.

I've used the bid system on 5 vehicles since 2000. In all I've talked with say 7-10 dealers per purchase. Only one time did a salesman "play" with the OTD price. Since this salesman was the low bidder, I asked for an email showing my OTD price before driving to the dealership. The emailed price (from his sales manager) was higher than his quote. He was no longer the low bidder, and I bought from another dealer. I believe that salesman knew that he was "playing" with the OTD price. The sales manager and the salesperson both called me and apologized. I told them thanks for calling....but they didn't have the lowest bid.

If they asked me whether I would take the 0% financing or take $1000 incentive, I would request the incentive so that they could price it right.
I get the OTD price first. I don't discuss financing until the bidding process is over.
Last edited by hudson on Fri Jul 10, 2020 5:19 pm, edited 1 time in total.
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Re: My New Car Buying Tips

Post by Helo80 »

LadyGeek wrote: Sun Jun 28, 2020 1:48 pm Another thing to consider is that COVID-19 has disrupted the supply chain. Long story short is that you get what the dealer has in stock - which may include a premium due to a short supply.

This thread contains my 2020 RAV4 buying experience, which was before COVID-19. My posts start here. Later in the thread, I paid off my loan and got a refund on the tire + wheel protection package.


Second this comment....

For the BHs that think the stars are aligning with an economy all over the place, people losing jobs and unable to get financing, etc. and all of this leading to dealers desperate to make big sales.... yeah, you probably punked yourself if you have been waiting to buy a new car.

Market timing on buying new or used cars is very akin to market timing in buying index funds.... but the former BHs think they can master, the latter.... BHs mostly agree they cannot master.

Used cars ---- Way, way off as in-person auctions are still not running (to my knowledge). Everything is online now and that changes buying dynamics for the reps who have been buying in-person for like.... forever. So, used inventory is extremely thin. If you don't buy today for the asking price, there is no guarantee the vehicle will be there later that day or tomorrow.... especially if the price is competitive for the area.

New cars --- dealers are all scrambling to compete for what is coming out of the factory as most of their inventory is what has been picked over and through by many buyers. If you don't buy today for the asking price, there is no guarantee the vehicle will be there later that day or tomorrow.... especially if the price is competitive for the area.

If you try to hold out for a particular price on a car and the dealer won't budge, just move on with your life. At this point, the ball is firmly in dealers hands as there is simply very little inventory.
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Re: My New Car Buying Tips

Post by Helo80 »

RetiredCSProf wrote: Tue Jun 30, 2020 10:57 pm On a new car purchase, to get the incentives (cash off the MSRP), I would need to finance through the dealer. If I refinance at my CU within 90 days of purchase, the CU will consider it a new car, and their interest rate may be lower than the dealership. Reading through this post, I see that the dealer may pressure me to keep the loan past 90 days.

Depending on the lending institution, dealers do get kickbacks from lenders for directing customers to them. Generally speaking, 90 days is the minimum a lender requires the account to be open otherwise they'll do a chargeback from the lending institution to the dealership.

There is usually nothing prohibiting you from paying off the loan early, but it's a bit of a game of what the daily charge is for financing versus how much you want to screw over the dealer.

At the end of the day, BHs hate car "stealerships" even though they provide a lot of jobs, often for people with only a HS education. Dealerships are expensive to run, and most car deals, especially on the new side, are not netting them thousands and thousands of dollars unless you buy backend products and/or pay more above invoice pricing b/c the car is a hot mover at the time.
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Baker1357
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Joined: Fri Sep 29, 2017 5:07 am

Re: My New Car Buying Tips

Post by Baker1357 »

I doubt if this will work, they will not give you their otd price by email as they know you will just shop it around. You will get MRSP plus rebates, etc. some of which you will not qualify for. Most of them will ignore you.
GT99
Posts: 757
Joined: Wed Jun 20, 2018 5:26 pm

Re: My New Car Buying Tips

Post by GT99 »

Baker1357 wrote: Fri Jul 03, 2020 12:00 pm I doubt if this will work, they will not give you their otd price by email as they know you will just shop it around. You will get MRSP plus rebates, etc. some of which you will not qualify for. Most of them will ignore you.
Some dealers won't. Most will. Some will give you the runaround before they provide it, some just will do it. This has become a very common buying approach, and they know they're going to lose sales if they don't do it. Frankly, smart dealers love selling a car to someone who knows what they want that they've only spent 5 minutes on via email. It's much cheaper to have an "e-salesperson" who can deal with 50 potential customers in a day than a salesperson only dealing with folks in person who might be able to squeeze in 10 customers in a day.

Regarding OTD pricing, I always recommend reading all paperwork before signing anything. Many dealers will try to slide in a random fee (like a documentation fee) at the end that is pure profit for them. It will usually be towards the back of the paperwork, with the expectation that someone will have already signed most of it and feel like it's too late to do anything about it. When you question it, they'll say something like "that's just standard on every sale" and if you say you asked for the OTD price, they'll tell you something like "sorry for the confusion - OTD price includes taxes, tag, and title, but not <insert fee name." Personally, if this happens to me, I walk.
hudson
Posts: 7098
Joined: Fri Apr 06, 2007 9:15 am

Re: My New Car Buying Tips

Post by hudson »

Baker1357 wrote: Fri Jul 03, 2020 12:00 pm I doubt if this will work, they will not give you their otd price by email as they know you will just shop it around. You will get MRSP plus rebates, etc. some of which you will not qualify for. Most of them will ignore you.
I've had better luck calling the dealer. I tell them that I'm a serious buyer and that I'm going to buy a car in one or two days. I tell them exactly what I want; it's usually something that I know that they have on their lot. I ask for the out the door price. Ninety percent of the time I get the OTD price. I don't hesitate to give them my regular email, cell number, and address. Many times, they'll give me the OTD price in just a few minutes. Sometimes, they'll email it or call me back.

For those that don't give me the OTD price, I thank them and move on. There are plenty of dealers.

Bottom Line: The key is to convince the salesman that you are a serious buyer who wants a car soon.
hudson
Posts: 7098
Joined: Fri Apr 06, 2007 9:15 am

Re: My New Car Buying Tips

Post by hudson »

GT99 wrote: Fri Jul 03, 2020 12:27 pm
Baker1357 wrote: Fri Jul 03, 2020 12:00 pm I doubt if this will work, they will not give you their otd price by email as they know you will just shop it around. You will get MRSP plus rebates, etc. some of which you will not qualify for. Most of them will ignore you.
Regarding OTD pricing, I always recommend reading all paperwork before signing anything. Many dealers will try to slide in a random fee (like a documentation fee) at the end that is pure profit for them. It will usually be towards the back of the paperwork, with the expectation that someone will have already signed most of it and feel like it's too late to do anything about it. When you question it, they'll say something like "that's just standard on every sale" and if you say you asked for the OTD price, they'll tell you something like "sorry for the confusion - OTD price includes taxes, tag, and title, but not <insert fee name." Personally, if this happens to me, I walk.
I agree!
When I'm down to the lowest bidder, I call them and tell them that I'm probably going to go with them. Before giving them my credit card number for the obligatory $300 deposit, I ask for some sort of document that lays out the deal in detail. I don't really care what's on the list as long as the agreed upon OTD price is the same as the total amount. If the number is higher, we have a problem, but I'm still at home, I can easily buy from the next lower bidder. Dealers don't usually want to irritate customers because many manufacturers send out customer satisfaction surveys.
RetiredCSProf
Posts: 1226
Joined: Tue Feb 28, 2017 3:59 pm

Re: My New Car Buying Tips

Post by RetiredCSProf »

Hudson, I'm trying your buying tips with modest success. I tried to be vague about whether I would be leasing or purchasing, but the dealers really want to know.

Inventory is a big issue. I want to purchase a 2021 model that has just started trickling into the showrooms in the last two weeks.

I found eight dealerships within 30 miles; five of these have at least one car on the lot. Two dealerships told me that there are cars at the port (in transit) waiting for OK from Customs. It could take days or months, due to the pandemic. I've extended the lease on my current car for two months, not sure I can extend it beyond that.

On Sunday, I took a test drive and met with one salesperson. After some negotiation, the salesman was willing to come close to my price, but there were some after-factory "perks" tacked on to the price that he insisted are mandatory. He offered 0.9% financing on a 48-month or 60-month loan; no option for cash back. They already had a customer for the car, so I felt like I was in a competition.

I was able to get an email quote from a sales manager that I called at another dealership, over an hour's drive away. She agreed to email a quote, which is the sticker price, with some dealership extras tacked on to the price. She offered 4.9% APR with $2000 cash back -- although I'm not sure if the $2000 is an APR credit or some other rebate.

Given that the financing is through the car company's financial services, I do not understand why they are inconsistent in the loan terms.
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