So, I’m getting a new car. After reading this Thread I feel pretty good about the decision I had already made to pay in full on the day of purchase.
I’m not very good at haggling. I’m not looking for a crash course in “driving a hard bargain”. But I also want to make sure I get a good discount for paying it all up front. Percentage-wise, how much should I be able to get them to come down from the listed price?
I’m looking to get a new Prius, if the type of car makes any difference in figuring this kinda thing out.
I’ve already donated my old car (which was barely running, I’m actually surprised they took it!) to charity, so we don’t have any trade-in to figure into the equation.
I’ve been told that since they make money from the financing, they’d rather you not pay in cash, so they’re not going to give you a discount for paying it all up front.
In Australia expect to pay more because the car dealers get a kickback from the finance company they use. Your failure to finance the purchase cuts their profit.
This recent article points out that there is a waiting list for the Prius, which means it’s unlikely that you’ll get any discount. It also addresses the fact that the Prius doesn’t get anywhere near the advertised MPG.
As I pointed out in the other thread, if you use dealer financing for part of the cost, then you have an additional protection in the event you get a “lemon”, depending on your state’s lemon law.
You should be able to research online to find out the lowest available price.
This has been my experence. When I said I wanted to buy it outright, they almost begged me to finance part of it, even if the financed part was only a few thousand or so.
Since it’s a Prius, and therefore popular and hard to get, I wouldn’t be surprised if you’re asked to pay a dealer markup above and beyond the sticker price, instead of a discount for a cash purchase. But I’m curious how it works out for you. Please let us know.
We just bought a new Prius and paid cash for it. We did not get a discount, and had to wait several months for it. I think the dealer would have laughed at us if we had asked for a discount.
And as for the milage, ours get far and away better milage than any car either of us has ever owned.
The other posters are correct in that the dealer makes more money off a financing deal, so is likely to give a bigger discount off list if the car is financed through them. You are under no obligation, however, to discuss the payment arrangements until you have negotiated the best price for the vehicle you want. Negotiate price first, then the payment arrangements.
The problem here is that the vehicle you want is a highly desirable model with (apparently) a months-long waiting list. It is therefore unrealistic to expect any sort of discount regardless of payment method; after all, there are numerous other buyers prepared to pay full list price.
I’ll just point out that from a purely practical standpoint, you most likely could get a new Corolla (similar in size and overall performance) for a discount that would cover several years of higher fuel bills for that car when compared to a Prius. I realize, however, that pure economics is not necessarily the sole reason for your selection.
When buying a car it’s not the discount you should discuss but the markup. That way you eliminate any dissimilarity between cars that have different options. You can find the dealer purchase price in magazines. Dealers often charge 2 different markups, one for the base price and one for the options. When you know what these are you can calculate the cost of the car off the sticker. This doesn’t apply to certain cars such as Saturn or even specific models. Ford changed to a fixed price for the Escort toward the end of it’s run.
Unfortunately, as has been pointed out, the Prius is on back order. You might surf the net for what people are paying for them. I’d start at Edmunds and go from there.
Right. Do NOT tell them you’ll be paying up front. In fact, you might not. Let them run your credit then come back with a quote based on that and with payments and an interest rate. I was ready to pay for my new car with a check, until they told me I qualified for a 0% interest rate- so not being a complete idiot- I took them up on it. Do tell them you are interested in the lowest interest rate possible, not the most payments. So, since you’re a SDMB poster, I assume you’re also not a complete idiot, so I also assume you’d accept a 0% or so interest rate right? So, if you tell them you’d be interested in financing the car loan through then- IF they came up with a good price AND a good rate, you wouldn’t be lying. Thus, they will likely come up with a lower price on the car, and MAYBE even a rate you’d accept. Ok, probably not, sure.
I suggest you go pay Consumer reports the pittance they want for a car price guide on your car.
It’s when you (like with furniture, appliances, etc. but not cars) will likely pay with your own Credit card- then they will likely offer you a small discount for “cash”. If I was buying anything more than $1000, I’d ask for such a discount. I have gotten discounts of 1%, 2%, even “no sales tax” (that’s 8%), and even when no discount was forthcoming “free delivery”- which saved $25.
If they won’t give you a discount for paying cash, but would for financing, could you accept the finacing then immediately pay off the loan in the first month or two? You’re allowed to do that, aren’t you?
Surely the dealer wouldn’t offer you a bigger discount that exceeds the money they would make off the finance charges? Would they?
Anyway, I was going to sugest going to a fleet dealer. I’ve always got financed through my own personal bank. So to the dealership, it’s like I was paying cash anyway. The last truck I bought off of a fleet dealer, they made $50 profit; according to the invoice he showed me. (Which could have very well been a scam, but still, I got the truck dirt cheap.) The only thing with a fleet dealer is you have to chose from a list of cars they have as opposed to custom ordering what you want.
But judging from the other posters; the Prius is hard to come by so the Prius isn’t something that’s likely to be on a fleet dealers list.
Things like that can’t ever affect your credit rating. Credit reports only showed if you paid your credit accounts late in 30, 60, and 90 day breakdowns. There are no hidden categories for things like paying a contract early.
Right, and unless you’re a lawyer- don’t think you can read that contract. They throw terms around like the “Rule of 78” which significantly effects the way your loan is paid off.
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SHAKES;** I am not sure I get your question. No, the dealer won’t offer you a bigger discount than he’ll make off the finance charge. But lets give an example. Let us say you saw a used car listing for $10000. The dealer has (say) $7500 in that car. Thus, $7500 is his “no profit” price. But if he thinks he’s going to make an extra $2000 off the financing, he might be willing to sell the car for $8000- which would make him a nice profit. However, $500 is still a modest gain.
It’s kind of a scam - the dealer invoice and the actual cost to the dealer are only sort of related. There can be a ton of things set up between the manufacturer and the dealer that affect the actual cost to the dealer. Here’s an article from Edmund’s that explains one of the most common arrangements that affect the actual cost, dealer holdback.
That’s not to say that you didn’t get a good deal on your truck. You may very well have gotten a good price - just not as good as the salesperson led you to believe.
Possibly of no interest at all tonight on Aussie TV was an old episode of the BBC’s Top Gear (best car show of all time) in which they tested out the Prius and in summary concluded:
*We sometimes get criticised for smacking the environment around the chops with a barrel of oil on Top Gear. It’s not our intention to hurt the planet and its fluffy bunnies, though. So we thought, let’s have a look at the Toyota Prius, which is a new hybrid car, containing both a standard petrol engine and an electric motor.
The theory behind this is simple: Use the electric motor for city driving, and the proper engine for motorways. The theory is great, but there are problems. First, the petrol consumption is awful - it manages less than a diesel Lupo, which defeats the point totally. What’s worse, is that it’s slower than a diesel too, which is really bad news, unless driving above 30mph scares you.*
They also criticised the car for being overpriced (you are paying for 2 under powered engines) and cheaply made.