Not necessarily true:
Dealers are there to sell loans attached to cars. That’s where their bread and butter is; people paying cash won’t make them as much money unless they charge them more.
The cars are bait; the biggest profits are in the loan. Any time a place finances the sale of a product you can bet the financing is what makes the big bucks for that company.
The last time I bought a car I called my Credit Union beforehand and got a ballpark idea of what the rates would be based on the model year of the vehicle.
Once I decided on a car I liked, I called back and gave them the information they wanted, they said they would call me back with a rate.
In a stroke of luck, they called back just as I was finishing the test drive with the salesman. I put them on speaker so that he could hear the rate - “2.25%”.
When I got to talking with the F&I guy he asked if I would let them try to beat my Credit Union, I saw no harm in it and he came back with a rate of 1.99%, so I went with them.
Going in knowing what interest rates you qualify for can be a powerful negotiating tool.
It’s even easier with e-quoting. Once you pick out the model and features you want, look through your nearest dealers online (the ones around here all have their inventory online). Find a few dealers with the exact model and ask for an e-quote with the walk out the door price so you can arrive with check filled out. You’ll get the e-quotes and can pick the lowest assuming you are happy with that price.
No haggling, no added fees, no waiting for them running back in forth. Let them know you are coming in, what time, have the car ready and you’ll have the check for that exact amount. Takes a few minutes to fill out the paperwork and you are done.
The dealer makes far more on financing than they ever will on a sale.
The salesman was absolutely correct. The method of calculating FICO scores is a closely guarded secret and so CreditKarma et al. do their best guess. These are called FACO (Fake-O) scores and are not accurate. The only way to get accurate scores is either pay a monthly fee to the Big-3 or once a year get your report from annualcreditreport . com.
annualcreditreport . com does not provide FICO scores (although you have the opportunity to buy them directly from the Big 3).
CreditKarma provides your Vantage-3 credit score; Vantage is a competitor firm to Fair Isaac (home of FICO). What CreditKarma provides is absolutely an accurate score, but it’s not the same thing as any particular model of FICO. Fair Isaac has multiple scoring models, so it is perfectly possible to have an 820 FICO score and an 807, and have them both be true, accurate, and correct–it may be as simple as the difference between FICO 8 and FICO 9.
An average consumer will have somewhere around four DOZEN different FICO scores–what you buy from TransUnion will not be the same as what you buy from Experian, and what your credit union buys to assess mortgage risk will not be the same as what the auto lender buys to assess auto loan risk. Different models for different lenders, different credit bureaus, and different purposes, all labeled “FICO.”
The VantageScore is a guess. But CreditKarma’s scores for Experian and TransUnion come straight from Experian and TransUnion. The dealer was using a TransUnion score, which CreditKarma is not guessing at. The difference is based on the auto adjustment, which was explained earlier in the thread.
Yeah it does. It is Federal law that the Big-3 need to provide a free credit report once per year upon request. Are you perchance thinking of freecreditreport.com? Because those are FACO scores.
They have to provide a free credit report but not a FICO score. There is a difference.
My father happened to go on March 31, and got a $27K Forester for $5600 with his trade-in. I guess that thing must have been sitting there all quarter??
Them: We can get it down to $12K with the tradein.
Him: That’s more than I wanted to spend. I wanted to spend about $5000.
Them: Can you do $5600?
Of course he had done his homework on-line, expected to get the full trade-in and was ready to walk away. And he was paying cash.
They were playing with two dollar amounts there (price of the car and value of the trade-in). If they’re giving you the car for a steal chances are they’re buying your trade-in for a steal.
I believe the dealer was perfectly happy with it, but maybe because they were getting rid of the Forester? My father was going with the top end of the on-line estimates for his trade-in, and the bottom of what the car sells for.
He’s so frugal he walked away thinking he paid too much :smack:, but I still think it was quite a deal.
nm
Well, it depends what he was trading in. I’m having a hard time thinking of a comparable vehicle that would be worth $22,000.00 used.
Check with your credit cards and stuff, too. My US Bank card gives me free credit reporting from TransUnion including my score (at least my score according to TU).
I always thought I saw numbers when I got my report. Thank for the education.
Do they still play games with the value of your trade-in?
The deal was, basically, "If you pretend our car is worth twice what it is worth, we’ll pretend your car is worth twice what it is worth.
Note: know what your car is actually worth. You will not get that number from a dealer - he wants to make money when he turns it over.
If he is telling you that he’ll pay $500 more than it is worth, note that you will pay $1000 more than the new car is worth.
If you have sales tax (and, in CA at least, your registration is based on what you paid for the car), all those “good deals on trade-ins” do is increase the tax YOU pay.
If I know my car is worth $5000 on a good day, and the dealer is willing to pay me $8000, I am NOT getting a “good deal” - I’m paying tax on the $4500 difference between what he says it is worth vs what he is actually paying for it.
Tell him “Cut the bullshit trade-in and maybe we can deal”.
My ego is not on the line when talking money.
I am not going to pay more tax so I can leave the place thinking - “boy, it’s a good thing the dealer didn’t notice the funny tapping in the engine”.
He noticed.
Too bad you thought he didn’t and “Pulled one over on him”.
Again - that lot, the building, the equipment, the heat, lights, insurance - all paid for by people who thought “Boy, I got the better of* that* deal”.
The new car was listed at $27K and he saw the “actually paid” at ~$22K. His trade-in was listed at maybe $17K on the high end so that’s where he got the $5K net. They offered $15K sight unseen on the trade-in so that’s where they got the starting offer of $12K. (Tacoma quad-cab full-size bed pickup)