Who here works for a car dealership?

[Chiefs Pantalones]

I know there is some but I forget. I have a couple questions about trading in my car or selling it privately.

[hometeam]

Originally Posted by Chiefs Pantalones

And if I end up doing this I'm not taking anything less than $29k for it, which is KBB ($29-$31k).

Dealers were selling the same vehicle with 40,000 more miles on them for as much as $33k.

Asking 33k and getting 33k are two different things.

You need to look at the LOWEST amount they are being listed at, as that will give you a better idea those kind of vehicles will really bring in the end.

[hometeam]

I will throw this out here again, for new folks or people who dont know..

I will help you, and anyone else on this forum, with honest advice, that will help get you the best deal on your new/pre-owned car.

Take advantage of it, I offer this service on all forums and groups I am a part of, and I have been doing this for a very long time at a high level. I have no skin in the game except to help you guys.

[R8RFAN]

hometeam... Does buying a new vehicle cash have any power in negotiating nowadays?

[Dayze]

I would venture to say no. since financing it typically, I believe, done outside the dealership/manufacturer. sometimes you might find GM financing, or something of the like, but each time I've done it, they sell the loan off anyway.

[Dayze]

also think of Invoice vs Cost as:

You buy a flesh light for $50 from Rico. but Rico gets it for $25 after the manufacturer after he sells one. so even though the invoice Rico has says $50, when it's all said and done, it only costs Rico $25 to put it on the shelf next to the glory hole.

[hometeam]

Originally Posted by 3rd&48ers

hometeam... Does buying a new vehicle cash have any power in negotiating nowadays?

None whatsoever, in fact in some dealerships it may get you a worse deal. (Where I am, it wont help, but it wont hurt) When someone comes in and acts like they should get some special attention because they have cash, dealership personnel just roll there eyes and let them think that it does, because saying no to a customer is always a bad idea.

The dealership makes money on the financing, even if you don't buy any financing 'product' they still make money on the interest rate. No rate, no money.

There are times when a dealership will say.. take a loss on the front end of a car if they know they can make it up on the interest reserve, etc.

[hometeam]

Originally Posted by Dayze

I would venture to say no. since financing it typically, I believe, done outside the dealership/manufacturer. sometimes you might find GM financing, or something of the like, but each time I've done it, they sell the loan off anyway.

Not quite how it works but the sentiment is the same.

The dealership doesn't make the loan then sell it off, they actually have a buy rate, and a sell rate.

Say you come in and buy a car, and the dealership says ok your rate is going to be 2.9%. Well, the dealership got a buy rate of 1.9%. Meaning the difference in interest amount the bank will collect over the life of the loan is 1%

So hypothetically lets say in this situation that amounts to another 800 bucks over the life of the loan. The bank actually pays a % of that number to the dealership for facilitating/bringin the loan to them. Depending on the lender, this % can vary, but there is where you make money on finance reserve, as a dealership.

Before anyone goes "OMG THEY ARE MARKING MY RATE UP!11!!" Keep in mind, the 'buy rate' the dealership gets typically cannot be gotten by you as a consumer from that bank any way, what the bank is doing is rewarding the dealer for feeding them loans. In simple terms, the dealership is basically just wholesaling them loan customers, and collect on the difference between the wholesale rate, and the retail rate.

Edit; To add to this, even when you buy a new car and take 0% or 1.9% financing on it, even the manufacturer will pay out a couple hundred bucks to the dealer, so no matter what, financing makes the dealer money, cash buyers or outside lienholders do not.

[R8RFAN]

Originally Posted by hometeam

None whatsoever, in fact in some dealerships it may get you a worse deal. (Where I am, it wont help, but it wont hurt) When someone comes in and acts like they should get some special attention because they have cash, dealership personnel just roll there eyes and let them think that it does, because saying no to a customer is always a bad idea.

The dealership makes money on the financing, even if you don't buy any financing 'product' they still make money on the interest rate. No rate, no money.

There are times when a dealership will say.. take a loss on the front end of a car if they know they can make it up on the interest reserve, etc.

So exactly how much should one put down (%) to get the best deal... I can finance one for a few months to improve my credit score...

[hometeam]

Originally Posted by 3rd&48ers

So exactly how much should one put down (%) to get the best deal... I can finance one for a few months to improve my credit score...

There is no real set percentage. And it will vary from dealer to dealer. As I said before, having cash down or none is not going to make a lot of difference on what you can buy the car for on the front end. Now of course, the total amount financed will affect how much interest you pay, so the more you put down the less interest you pay.

In fact ZERO down is the best for the dealership to make money, because that creates a higher reserve in dollars.

Also a few months wont improve it much, lenders/credit agencies factor TIME on accounts as a major portion of credit score.

[R8RFAN]

Originally Posted by hometeam

There is no real set percentage. And it will vary from dealer to dealer. As I said before, having cash down or none is not going to make a lot of difference on what you can buy the car for on the front end. Now of course, the total amount financed will affect how much interest you pay, so the more you put down the less interest you pay.

In fact ZERO down is the best for the dealership to make money, because that creates a higher reserve in dollars.

Also a few months wont improve it much, lenders/credit agencies factor TIME on accounts as a major portion of credit score.

I am sitting on a 769 score right now from using 3 credit cards for the past year or so and paying them off every month so I am good there

[hometeam]

Originally Posted by 3rd&48ers

I am sitting on a 769 score right now from using 3 credit cards for the past year or so and paying them off every month so I am good there

If your a 769, you are already as prime as you can get, you are going to see the best rates banks will offer you, even if you go up to say 800. once you get over 720 you are pretty much home free.

Also, there are 3 credit bureaus. Every lender is different on what you are looking at. Im a 715 Equifax, but im a 785 Transunion, so if I buy something on credit from a lender that uses Equifax, I will have a higher rate than if I used a lender who uses Transunion scores.

[Chiefs Pantalones]

Originally Posted by hometeam

PM me. If I cant help you then no one can~

Ill even give you my phone number and we can make it easy with a short phone call.

PM sent

[R8RFAN]

Originally Posted by hometeam

If your a 769, you are already as prime as you can get, you are going to see the best rates banks will offer you, even if you go up to say 800. once you get over 720 you are pretty much home free.

Also, there are 3 credit bureaus. Every lender is different on what you are looking at. Im a 715 Equifax, but im a 785 Transunion, so if I buy something on credit from a lender that uses Equifax, I will have a higher rate than if I used a lender who uses Transunion scores.

I don't know which one is used, I get that free Fico every month in my Discover statement

[MahiMike]

Originally Posted by ChiefsOne

I own a small used car lot.

My dream job. Can I ask how much capital it took to start that?

[hometeam]

Originally Posted by 3rd&48ers

I don't know which one is used, I get that free Fico every month in my Discover statement

Yes, same, Discover uses Transunion, which usually scores the easiest of the 3.