Don’t get yo-yo’ed by your car dealer!

Having your own financing will prevent this.
At least that’s what I’m doing when mine comes in, looking at a late March delivery

 

Yep always gone through my bank, mostly have better rates too.

 

Mine is beating Toyota by .5%

 

At the very least I would secure my own financing if I decided to have a loan on a car. I opted to save up and buy my truck in cash instead. I went to several dealerships over the course of a few weeks and told them I would buy a truck in cash for a certain price, that it would be the easiest sale they made. After getting a few written quotes, I eventually found a no-bs salesperson who knew that a surefire, fast, easy sale for an hour of his time was worth it.

They always say you get a better deal when financing, but that has not been my experience. It gives way too much leverage to the dealership. You cannot go between dealerships and make them compete as easily.

 

RULE #1 - Always - Always - Always get your financing PRE-APPROVED from a bank or Credit Union NEVER the dealer - Always
RULE #2 - Never trade in your old vehicle - sell it independently

Put yourself in the position where you are negotiating only the price of the vehicle not finance terms and trade in value. All that just muddies the water and lends itself to getting ripped off.

 

I had this happen with the very first Tacoma I bought from some shitbag dealership in Eugene, OR back in 2009 (edit: Kendall Toyota). After pulling every bait and switch and new-puppy tactic, they said I qualified for a special student rate (was grad student at OSU at the time). A week later they call me and tell me I didn't qualify for it after all and would have to sign a new financing contract.

I told them I'd just bring my truck back, which didn't seem to be what they were expecting to hear. Dude told me he needed to talk to sales manager, called me back later and tried to play it that I was lucky they were going to honor the original terms, but really they just new they'd eat shit on the car value since they'd have to list it as used now.

I guess either folks aren't willing to risk losing the car to keep terms, or the used market is so strong it no longer matters to dealerships.

TL;DR - fuck car dealerships and shady sales practices. Always. All Car Dealerships are Bastards.

 

Cash deals normally won't get a better deal on the price of a new vehicle. At least not where the dealer thinks all along that you will be financing through them. They are thinking long term loan interest income. Cash deals provide zero back end income on the sale.

In 2017 I worked four different Toyota dealerships over text/phone/email for a VIN that was 3 hours away on yet another dealers lot. Never left my living room until I had my OTD price in writing.

I just played them back and forth over the course of an afternoon pushing the OTD price lower and lower each time. Each dealership was wanting the sale, and each dealership generally assumed I was going to finance through them. I actually had my finances pre approved through my credit union. In the end my OTD price was way lower than a cash deal could reach (at the time). And my credit union was a few points better than any dealer rate.

I financed 25% of the cost through my credit union over 3 years, paid cash on the rest so I still had fluid cash in the bank for other emergencies.

The winning dealer trailered a trade truck up 3 hours to the dealer my VIN was at and trailer back mine. Had 3 miles total on the OD when I drove off the lot.

Now, you can certainly pay cash (aka check) in front of the Finance Manager at closing to eliminate any future interest on your end, and give them some heartburn. That certainly works.

I would never disclose my payment plan until I am sitting with the Finance Manager at the point of sale.

If ever asked how I am financing this purchase anytime during the process of negotiating the OTD price, I just give vague answers leading them to believe I plan to finance with them. This way they will go as low as possible on the VIN just to score the sale.

 

Fair enough. I can see how that might be a better approach. Maybe I got lucky, because I got a good deal on mine. I basically did the same thing, just without obfuscating the method of payment. I didn't want my time wasted by all that finance talk. Just in-out-done. It was a super fast sale.

 

Playing games with a dealer as he suggests will only get them to possibly do the same back. Does a dealer want you to finance? Absolutely. But they’re not going to pass up a deal just because you’re paying cash. Any smart desk manager knows any finance profit is maybe money versus guaranteed front end profit.

I suggest being transparent, knowing what you want to be at and walking away if it doesn’t happen.

 

My price negotiation process was a few hours of chatter back and forth online and via phone (each dealer had their preference on communication).

Final OTD deal was emailed to me with dealership credentials so I had good faith to drive 40mins to said dealer that day.

I put $3500 down on my credit card with signed agreement that my VIN would be available for viewing/driving and purchase by noon the following day. They needed to arrange a vehicle swap 3 hours north.

Next morning I was contacted that my truck was on sight, washed, and gassed up. I stayed at my folk's house that night to eliminate the 40mins home and 40mins back. They live roughly 10mins from the dealer.

Looked it over, test drove, got free coffee, OJ and donuts (son went with me). Shook hands with the salesman I was working with. Sat down with the Finance Manager for payment and dropped my payment plan in his lap. The look on his face was priceless. Checkmate!

All the while they were assuming I was going to just take any dealer interest rate that was available. Right then and there, all back end $$$ just left the chat.

 

Nice job!

 

This was my philosophy. I knew their cost and was willing to pay an OTD price above that. It wasn't a lot, but this was a 100% guaranteed sale with basically zero time investment on their part. At the end of the month, this can be a pretty good lever.

 

Exactly, imo this stuff mostly happens to ppl who can't afford their car in the first place.

 

I don’t understand this … how would they auction your car while you’re at the dealer buying a new one ? This article hurts my brain

 

Hence the reason to line up your own financing before entering a dealership.

#LifeLessons

 

Playing games (if that is what we are calling it) with dealers is exactly how you get the deal that works best for you.

I am only one fish in the sea of deals, and yes they can and will go whatever direction they want that fits their need. We need to be able to play poker just the same.

When I negotiate a car deal, I am always going to be in control of how my money is spent. I am not in the business of keeping dealerships a float.

Dealerships are constantly developing new ways to try and maintain the upper hand on a deal, and we as customers need to stay on top of these new ways.

Tomorrow might require new ideas to stay ahead of the "game". Right now, this works best for my approach.

1. Know exactly what I want or which exact vehicle I am wanting to purchase before contacting a dealer.

2. Get pre-financed through a credit union, have cash (or both). Do not disclose how I plan to pay until I am with the Finance Manager and ready to pay.

3. Sell outright, do not trade in.

4. Negotiate for OTD price to eliminate any and all hidden fees, taxes, etc.

 

The dealer sends you home with paperwork that spells out "the deal".

Unfortunately it usually includes your siggy for the small print that will cover their ass if/when they perform a bait and switch.

While you are home waiting on some final details that they conveniently put into place (like final loan procurement, interest rate or vehicle specifics), they "sell" your trade in right out from under you.

Dirty, dirty tricks!

As mentioned above these kinds of dealership transactions are used on folks that are impatient or don't have a good grasp on their finances. They know these people don't have the means or fortitude to prepare for or fight back.

It's these kinds of dealerships that assist in financial disaster of new or unsuspecting purchasers.

 

I guess I don’t get it.. I’m on my 6th new car in the last 24 months and I haven’t experienced this once or anything close

 

Dealership term is called a spot delivery. Many deals are made after bank hours. Many lenders require an underwriter to approve deal structure (while many will auto approve based on credit, Loan structure, etc). It’s not illegal at all. Just when you have someone with a 615 with high DTI, carrying $3,000 negative and trying to advance 121% and submitting at 9% (pipe dream) it becomes a problem. Seen thousands of spot deliveries on a Saturday night where customer is a 750+ and it’s sent over at 1.99% and it approves instantly Monday morning.
No one ever talks about those deals, it’s the credit criminals that can’t afford their current car but want a new one. Just to add, I’ve been out of car business 7 years but I know how it all works after being in it for 15.

 

You are probably smarter and better prepared so they have no reason to use these sleazy tactics on you.

I've never been that situation either.

I'm curious on the circumstances of being on your 6th new car in 24 months?

Are you flipping for them profit, building an empire, ADHD and can't decide on a one car, can't drive and keep crashing?