Ray incorrectly wrote the slogan . If Ray went to college and had an 8:00 o'clock class, he would know that "Knowledge is Power, But Sleep is More Powerful than Knowledge". I think if that was written on his T-shirts, they would be hot sellers in every college. LOL.
I wish there were a database of car purchases for the year that would include the final out the door cost of everyone's car purchased. Then we might be able to go into a dealership, ask for a fair price, and leave if our informed expectation isn't met. Dealerships won't change their business models until it is no longer profitable. As consumers we can probably make that happen, we just have to be organized and refuse to take bad deals.
Bought a car last year and we were approved by our bank for 2.49%. Finance Manager said the best he could do was 5%. Our bank was closed because they kept us after 10 pm. I was so irritated that when I got my first statement, I paid it off entirely. Glad to know that I hurt the Finance Manager by causing a chargeback. He deserved it.
Once back in the late 80’s I got the finance manager so pissed off with my relentless questions and refusal to accept their terms that I knew were blatant over charges to beef up their end that he shamed me by yelling on the show room floor what a pain in the ass I was, threw my car keys at me and told me to get the fuck out. This was at a Ford dealership in Tempe, Arizona. I complained about his behavior the next day to the General Manager and quess what? The General Manager marched over to the finance manager and confronted him with me standing next to him and the bastard could not deny it. The General Manager shamed him by telling him to box up his things and leave immediately right in front of me. I later got the van I wanted that day for the price that was at their cost. It pays to hold your ground and complain to the correct person.
Hater. That was a lawsuit when he threw your keys at you, if it made contact that is battery. You could have won with the right lawyer. Screaming at you is harassment too. He used derogatory words.
We bought a car 6 years ago. Husband has excellent credit and they advertised 0% interest for 60 months. Finance offered us 3.99% and when I questioned their advertised amount of 0% then he "looked farther" and found 1.99%. We took that, yet I knew they weren't being honest. I've learned so much from y'all. I won't concentrate on only one vehicle, so when/if the deal doesn't go as I plan, I won't be afraid to walk away.
Very often the manufacturer will offer 0.0% OR a rebate. Sometimes one is better and sometimes the other is better. Ask to see it both ways and you decide which is better for you.
I tell them from the get go, that I’m not buying anything extra, just the vehicle. Also, NEVER let them run your credit, if you have your own financing. I’ve walked away when they insisted and said it was required by the Patriot Act or some other BS, it’s not!
Same happened to me. They insisted on doing their own credit check giving some BS about "five day either/or" in case my lender (USAA) didn't fund the already approved loan. Schmucks. I walked out the door.
This is the part I don’t understand. If I submit my information to the dealer in good faith to secure financing. And the bank approves me at one rate and the dealer raises that rate for the purpose of his own financial gain without disclosing it to me how is that not fraudulent.
I had never considered this being a thing because yeah, it's sounds completely illegal. Trying to tell me a car is better or worth more than it is is shady but expected, telling me I got approved at a 5% when I really qualified for a 2% seems completely fraudulent. Glad this video was made. What an eye opener.
It's not illegal because you're allowed to make whatever agreement you want. If they offer you 8% and you agree, there's nothing illegal or immoral about that. If you make a deal with someone else for 4%, there's nothing illegal or immoral about that either. You have to take responsibility for agreements you make.
boy are you gonna be shocked when you find out the credit card rates and how much they are over base %. It is YOUR responsibility to know your best rate or try to negotiate it with the dealer if you think it is higher than it should be.
I enjoyed boning a finance department once when I knew my credit was outstanding 800+ but this guy got me a mediocre rate. I paid that note off with the bank within 30 days. Hope they enjoyed that "charge back". I learned my lesson from that experience & check with my own banks these days. Bottom line know your worth.
For me, question zero is "what is the 'out the door' price?" Then I pull out my financial calculator and figure the payment. Having visited my Credit Union prior to shopping I already know my interest rate. I must be a terrible customer.
I do the same thing. I also take a book with me.. whenever they make me wait, I pretend to be busy or actually read. that way I remain alert and stick to my points. There is one more thing I do.. its usually the finance guy who tries to add on bs for 500 each etc. i keep saying no for all that and occationally praise their dealership and car to him. works great for me.
@@webguy943 Possibly why I hate going to the dealer service department. I breath a sight of relief when the warranty finally expires so that I am no longer required to use them.
@@webguy943 Depends on the dealership. One I worked at the techs and service department had nothing to do with the sales people. Techs and parts department hung out and sales people... Did weird pagan rituals for all we knew. Never had interaction with them. Sales didn't come back to service department, either.
Finance guy really didn't like me using my loan calculator. When it became obvious our numbers were quite different he finally got frustrated and tried to convince me I owed the extra $1200 for interest the loan would accrue until my first payment.
Just bought a new car on Monday. Price was negotiated on out-the-door price. When I got to the finance officer every add on was marked as 'no'. Of course I would have accepted anything they wanted to add at no change of price to me. I also knew the finance amount and interest rate so I also knew the monthly payment and length of loan. It was pleasant for both sides since there was nothing to get tense about with everything settled at the out-the-door price accepted.
I bought my last new car a couple years ago from a mom & pop dealership with, I am guessing, fewer than 20 employees. There was no sales manager that I could see and no F&I ( no high volume sales, but very low overhead). The salesman gave me 3 options with 3 prices- pay cash, finance at .9%, or finance at 3.5%. The size of the monthlies were never discussed, just the OTD price.The 3.5% for 60 was the best OTD price, of course, about 14% below MSRP. The vehicle had no added options and was already the cheapest of that model on the lot by far (including about 15 other dealerships in my half of the state). The deal saved me about $1800 over paying cash. I don't recall the salesman mentioning a 90 day wait to pay off the loan. I think I probably heard it later on you tube. I really can't be sure. I paid the loan off in 60 days. Had I known for certain that the bank required 90 days, and I do not, I would have waited another month. It would have only cost me a few dollars in interest and possibly meant a difference in the salesman's paycheck. If they work with me I like to work with them.
Walk into the finance office. "Total price $32,600, here is my bank draft for $32,600. Let's get the deal finished, as you can see, no money for anything you want to sell!" Works for me every time!
I actually called my bank and asked if they will charge me for paying my loan off early before getting pre-qualified. They said no, they do not charge their customers for that. I asked this before I even walked into a dealership.
I purchased a SUV for my sister and got additional cash back for financing through the dealer ship and the fiance man said I can pay off after three months so I called wells Fargo and they said I can pay off before the end of the month so I did. Only paid three dollars interest...
I think the biggest takeaway here is to always shop for financing before going to the dealer. Now you know exactly what rate you are approved for and its up to the finance person to match or beat it rather than try to scalp you.
You guys are all sooo adorable. I’m getting more and more confident about approaching my rental car purchase with each of your edu-taining videos.☺️🙌🏾I’m a woman and I’ve been terrified because I don’t think I have anybody that can go with me into this Lion’s den of rental car dealerships but one thing about me is I always do tons of research before I proceed into challenging situations. I’m almost ready to go AT these wolves! Thanks guys.Yeah!!!💪🏾
Good information. I am fortunate to serve on the board of directors of a local credit union. Our director makes sure that we are educated on all aspects of lending, particularly auto loans. I did not know this stuff before my time on the credit union board.
I disagree with your statement regarding paying cash. In my recent purchase while in the F&I office after we had agreed on a potential rate and all other issues I almost laughing asked what incentive there was for paying cash. The answer was $750.00. So why would I take financing ( and lose the $750 in savings) just so I can wait until I get my first statement and then pay off the loan???? I can see no reason to not take the $750 savings.......What am I missing?
I hate the "game" of car buying these days. A lesson I have learned is if you are pre-approved make sure your lender is open when you buy your vehicle. The dealer may tell you they cannot verify your pre-approved rate on your lenders website and since it was Sunday they could not contact them. This happened to me and my wife with both of us having credit of 793 (me) and 805 (her). Had to accept a slightly higher rate if we wanted the car that day. The most powerful thing you can bring to a car dealer is your willingness to say no and walk away.
When I go into finance office it is very quick. From showroom I've already come up with the total out the door cost; so, when I go into finance office I write a cheque and sign papers.
When I bought our new Rav4 last fall, the F&I guy set us in front of a big electronic console and showed us "The Menu." I knew it was coming and when he asked " which combination of features" I wanted, and I told him "none," he was stunned. He said, "well, I have a bit of flexibility on those numbers," and I told him "I'm frankly not interested in any of it." He brought in a closer to twist my arm a bit further (but not too severely) and I said "I'm just not interested in any of these at any price. " He finally folded up his electronic menu, had me sign the papers, and I got the sale closed for exactly our negotiated price, which included the factory rebate plus a nice dealer discount off MSRP. I was happy. More importantly, my *wife* was happy.
Car dealerships hate me. When the salesperson says they have to go talk to someone, I say, "I'll go with you". If the meeting is about me, I want to be there. If they say no I can't go, I just leave.
This philosophy is dumb and counter-productive. Are you that insecure that you feel you must disrupt their SOP ??? For what reason, they will never have a confidential conversation about your deal with you sitting there so the best likelihood is the Sales manager will step in and you will probably get a worse deal, just to teach you a lesson, for being an a-hole. Learn how to negotiate and let them do whatever they want as you will be in control. What they do behind the scenes is 100% irrelevant.
@@rm-dc6tx - I wouldn’t use Stephen’s strategy, but there’s nothing wrong with it. I’m the customer. It’s never your place to teach me any lessons. It’s your place to serve me. Keeping as much of my money as possible - yes, even by trying to disrupt the games dealers play to try to take it - is not “being an a-hole.” It’s being a responsible consumer. My job is to get the exact vehicle I want, for the least amount of money possible, with the greatest number of options possible, under the most favorable terms (for me) possible with zero regard for the dealership or salesperson. Many, if not most of them are trying to screw me every way they can. In doing so, they’ve established the rules for the transaction and given me permission to play by those rules. Thanks to the internet in general and TH-cam in particular, going to a dealership is now like watching a magic show where you know the trick behind every illusion. It may not be as much fun, but the customer is much less likely to be fooled by the so-called magician. Dealerships that give customers exceptional deals and great customer service can make their money in legitimate financing profits, service departments and repeat business. Those that focus on short-term gain by screwing over every customer they can? They deserve to rot.
@@rm-dc6tx I can tell you from experience, sometimes the conversation has nothing to do with your question but made to look like it and they already have the answer before going to the managers. Some things are for show (doesn't matter the business).
In the comments of one of these types of TH-cam videos I heard of a family that walked out when the salesperson went to their manager and this sales person asked where you're going and they said they were going out to lunch while you talk to your sales manager. Well the salesperson stopped that game!
I really love the info you provide. Please do a video on the "charge back" you mention in this video. That is something I do not understand. After watching your many videos about buying a car, I really appreciate the "mom & pop" new car dealership that I had dealt with since 1983. I told the owner what I was looking to buy and all the things I wanted. He never tried to "up sale" me. He wrote down on a piece of paper, which I could take with me when I left, the breakdown of all the costs and the "drive out the door" price(no other dealership would ever do that because they were afraid I'd take it to other dealerships). Without even asking, he wrote down the dealer discount I was getting as well as all the other rebates. There was no "F & I" to content with. Everything was straight forward and no haggling was necessary. His price was always better than the other dealerships in my area with whom I had to haggle price. Because of his honesty and transparent way of dealing with people, I remained a loyal customer until he retired and closed down the dealership in 2019. Sadly, that type of dealership no longer exists.
The charge backs don't affect you but dealerships do try to stop you. I'll give a short rundown. So when a dealership writes a loan, they and the lending agency are both making money off you. They chage interest to do this. Those two agencies are expecting you to make as many payments as possible so that they can get as much finance profit as possible. Car loans nowadays simple interest pretty much, unlike the old days when they were all precomputed interest that you had to pay upfront. So the lending agency and the dealership need you to keep making that payment to get the most money. If you pay off or refinance immediately, all they did was loan you let's say $40k to make a hundred bucks on that $40k. Not a good investment or use of loan funds. The charge back is the lienholder charging the dealership a precompted interest penalty for you paying the vehicle off too soon. Sometimes in the case of rebates or programs that require you to finance with the manufacturer, the dealership also gets charged back against those items, because the manufacturer is not your friend and gave you that money intending you to pay it back with interest through financing and you're not doing that so the manufacturer takes that money back from the store.
I hate when financial officer add cost protection to my finance when I told him no, until I found a month later , I have to call that sucker many times until i got straight out
💖Ohhhh! Dad has all the knowlege. Zach is smart enough to have listened and learned. Dad can learn from Zach too. 🤔🤨Y'all's mutual adoration and respect for each other, your integrity and caring for people is power. You're a power team! If I had to lean one way, it'd be Ray, the Patriarch.
I just bought a new Hyundai. The rate and payments were all negotiated by the sales manager (2.75 %) I qualified for 0% but would have lost the cash rebates . When I went to finance he pushed and pushed but I just declined everything extra in the packages. They were all very over priced and I didn't need them. For example they wanted $760 for a Service plan that included just oil changes and tire rotations for six years. Problem is Hyundai already covers three years for those services. So he was trying to scam me to pay $253 a year for services which would cost me about $120 at current rates pay as I go. I left that dealer with my nice low original payment.
yes I did twice over the years once when I realized that the bank that the dealer was using was the the bank I had my accounts in and they were advertising 2% lower new car loans so I refied within 30 days, the second when the finance guy was just being a jerk on the hard sell stuff which I refused to fall for and we had a 'difference of opinion' which got loud so I went to my credit union and refied with them, my way to send a little message to him his tactics were not appreciated.
The finance dude is there to recoup any discounts sales gave you. When presented with warranty options, say no several times. You’ll find they will lower the price a couple times buy asking are you Cosco or Sam’s club members. Doesn’t matter if you are or not, it’s just a way of them discounting prices without looking like they are and your getting a deal.
The more I watch this fiasco, the more I realize the atrocity of car dealers and how the objective of these crooks is to complicate and decieve. It's just a tangled web of sociopaths hell bent on stealing as much as possible. Wake up and see this for what it is. Think about this...these guys have oodles of videos to try to explain and educate us poor suckers on how twisted these organizations have become. How about this, quit screwing people and try ethics. These are sick operators. Downright gross and pathetic.
I like that you used the word “sociopath”. That’s exactly what they are. No conscience. They look people in the eyes and lie every single day. They deserve no respect.
Dont walk into a dealership without first doing ur homework. Know ur credit scores. Go to a credit union to check interest rates. When the salesperson asks what you want ur monthly payment to be, say “ZERO!’ I want the out the door price and interest rate, then I’ll see if the payment works for me. Not there to negotiate monthly payments, just the price of the car.
You guys, I have to thank you for letting us share in the pleasure you seem to be having working together, and for sharing such valuable information and insight on such an entertaining way.
You also definitely, really, really, want to know is what type of loan is it. Is it simple interest (unlikely but possible, better for customer) or rule of 78s (better for the lender, and, of course the dealer). You guys should really discuss this. Rule of 78s is front end loaded on the interest so if you pay off early you don't save nearly as much and their hand is deeper into your pocket.
But then precomputed interest would be as such that they don't have to care if you pay off the car early. The dealership already got their cut. Any customer of mine got a simple interest loan. The market is switching over. Maybe it's my area and the way the lenders operate here, IDK.
Always shop your financing with your bank before going to a dealer! Know the amount you can finance and at what rate. Never buy based on payment, buy based on cost and the rate and term will give you the payment!
I actually used the,”I’ll wait three months to pay out loan for the lower price. “ so I get a lower price and the dealer made his $$ on the loan”. Having said that next time I WILL be asking to see my approval from the lender. Thank you !!
Certain bad actors still exist in the industry, especially if they were trained by unscrupulous old school types or are old school themselves (just because they're still in the game doesn't mean they adapted). I've had customers ask me that question quite regularly, which they wouldn't really have to if people weren't still getting lied to.
F&I managers will often tell consumers with poor credit that the finance company will not approve the loan unless the take, ie-credit life and disability insurance. Just one example of F&I not being truthful.
In rare cases the dealership and lienholder may be trying to protect themselves because the customer could only get approved on a beater and they let other cars go to late payments or repo because of needed repairs. The warranty would protect the likelihood of still making the payment because any needed repairs would potentially be covered later. If it's EFG or JMA warranty it'll actually cover things, for instance. But if the lienholder doesn't approve a warranty being added to the financing there's no reason for finance to sell it. The loan won't get paid out by the lienholder.
car dealers, even today, with all the so called "knowledge" on the internet, still are doing the same things...only now, they just tell you "good luck and go to another dealer"...I just had it happen, literally yesterday...and how many dealerships secretly record people in the showroom or offices????
#1 the monthly payment is no way to negotiate a vehicle purchase. #2 a person should not need a dealer sales or finance manager to tell them their creditworthiness. If anyone use these tactics the dealer will know that you have no idea what you are doing.
I had no idea the dealer might be jacking up the loan interest rate on a car loan. Very useful information. By the way, I've always checked with my bank before going to the dealership to buy a car. I know what the bank will charge and how much they will lend. I tell the finance manager that if he or she can beat my bank's loan terms, I'll go with the the dealership's arranged loan. They usually beat my bank.
I don't know which is more perplexing: How anyone with a good conscience can be in the car business or how people making a living in the car business can do so in good conscience.
My comment does not really relate to this video, but the sum of all of your videos. It is very helpful advice. I just bought a car, and used the negotiations techniques that you described. With some steadfastness, I was able to get the deal that I wanted. Thanks for the helpful advice and the role playing, it helped.
A little late to the video, But another big scam is the extended warranty. 10yr./100,000mi. Most new vehicles come with a factory 5yr./60,000mi. You would only be gaining another 5yr./40,000mi. of warranty.
Here's an honest mistake that I received from someone who sold me a car by owner. Her car recently had tires put on with a tire package that she said I would have when I purchased a car. I end up having an issue with one of the tires on the car down the road and that particular package told me that it didn't apply to me because I was the new owner. I do not believe it all the previous owner was aware of that or tried it to be deceitful in any way.
This happened to me this past weekend. The Dealership tried to hide my approval rate. I have a good credit score and I knew what my rate should have been around 3%. I did some back calculations and they marked it up to 8.5% and I gladly walked out of the dealership and did not purchase the vehicle.
Yea if you were doing dealer-arranged financing u should have negotiated your rate BEFORE you went in the F&I office to sign. And I mean negotiated with them via EMAIL and/or TEXT. The only things you want to do when you go in to the dealership is to test drive/examine YOUR vehicle (the exact one you're buying) AND to sign the paperwork. All the talking, negotiating, credit check, decision making can be done without you physically there in the dealership. Remember that, especially nowadays with Covid you wanna limit your exposure (and yes tell them that!).
@@bindingcurve because I wanted to see they would bet the rate. I had a 3% interest rate in my back pocket from my credit union bank but after they did that I didn't want to do business with that dealership. I was going through the motions like yaa said to do. I didn't think it waste of time I learned alot from that encounter
@@paulden3158 I agree with you and I attempted to negotiate the price would not move on the price so I went to show them that I was serious about purchasing the price. Actually, they didn't nmove on the price until I left and then called my phone and drop the price 1300. I was done after that. I wasn't worried about the interest rate because I had an approval rate of 3% from my bank in my back pocket so I was trying to see if they could beat and could get the price even lower having them think that could make some money on the back end and drop the price then hit them with my bank paperwork.
@@Jrrucker1 They dropped the price and you had financing so you did not buy the car out of spite? Lesson you need to learn is not to let a dealership piss you off. Walking out should be a negotiating tactic, not a emotional response.
Yep to get the best deal finance because the dealership thinks they're going to make money over the period of the loan, and then pay it off. When I worked in car sales whenever someone came in and said I'm paying cash it didn't matter we preferred finance customers every single time and we would give them a better deal every single time. Also most people that say they're paying cash are not paying cash their financing through a different bank so you just have to find a way to match that rate. Most of the time the dealership can do that.
Id love to know how any of you are making enough money these days to buy a new car with cash. Most people I know have $5k at most saved, and thats in a good month.
If you were planning on paying off the loan in 30-90 days, why would you go through all the trouble of financing the car through the dealership or the bank? Just get a cashiers check from your bank after you have negotiated the price of the car and go back to the dealership and present the check and get the car. Refuse ANY and all extra warranty stuff, these are MAJOR money makers for the dealerships. Also watch all those FEES they charge you and question each one and simply refuse any that are unreasonable. Another one are the so-called paint protection schemes. Another big money maker for the dealerships. Just wax your own car later on. If the dealership wants to sell the car bad enough, they will negotiate, otherwise just walk out. This is a major, major purchase, you are the customer, you are in control. CHEERS.
Exception to the lie - I bought from a Nissan dealer. Two weeks later I got a letter from them with the loan number. I went to the web site and got the payoff value. I paid off the remaining $13,000 of the loan and paid $23.xx in interest. I'm now broke, but not paying rent on someone else's money!
What about dealer hold backs? I haven’t watched the whole video but have read the comments, I didn’t come across any that mention that. That number can add up to quite a bit at the end of the month to a dealership. For people who don’t know I will do a very rough break down; the manufacturer will give a dealership a certain figure based on the amount of vehicles they sell. People are kind of aware that the best time to go is the end of the month, but I don’t think a lot of them understand why. Let’s say you go to buy an F150, on top of the other profit they have worked into the deal, there might be 2-5k in manufacturer cash to them tied to that vehicle. So at the end of the month if they meet the quota there might be 50-100k (very rough figures) in cash coming to them from the manufacture. Let them know you are aware of the holdbacks and see if you can give them a little squeeze.
I hate car loans because there are so many moving parts. Do not negotiate on the length of the car loan. Dealers will agree to a lower monthly price, but then extend the car loan out much, much farther. In the end, you pay a far greater amount overall even though it looks like you got a bargain with a smaller monthly payment. I am lucky because now I can pay cash. But I had to save every penny and dime to get there.
A car buyer should never trust anyone at the dealership for anything. The F&I manage is the worst, period. The only question a car buyer should always ask the F&I manage is "what is the buy rate?" If the F&I manager refuses, the car buyer can be certain the F&I manage has bumped the interest rate. If the F&I manager refuses, just walk away. A couple of years ago, at a Honda dealer buying for my daughter, the F&I manager refused to disclose the buy rate. He had offered a rate of 4.3 percent. I asked for the buy rate, he said "4.3 percent is the rate the dealer is offering and suggested I could refinance." I said no, nope, nada and stood up to walk away. He immediately mumbled a bit and asked me to wait a few moments. He disappeared and returned a few minutes later and redid the deal at 2.3 percent (which was the correct rate for my daughter's credit score and profile).
If you don't know your own credit information and score, you surely shouldn't be taking out a loan at a car dealership. I would suggest that if you can't pay cash for the vehicle you are likely already wrong in financing any vehicle. I know this because I've been there, done that. I was an idiot. I did finance my last vehicle, but I'm paying 1.86% and the money I would have spent is making me gobs of interest. That is the only reason to take out a loan on a vehicle. If you can't afford to buy it cash, you're buying too much car. Likewise, if you have a 30 year loan on your house, you bought too much house. (Only do 30 year loans on property if you're doing it for income ....and then know why you are doing it that way.)
"That is the only reason to take out a loan on a vehicle." Simply not true. You can use financing as a tool to get a better price on the vehicle. Then, simply pay it off as soon as you get your first statement.
Funny. I was told this big lie just last month. The sales guy told me that I needed to make monthly payments for at least 6 months or I would get fined $1,600. I got an OTD price, wrote the check and drove off. Don't let them force you into a con job deal.
Was this on the sales floor or with the F&I guy? Just wondering if your negotiated OTD price was with them assuming that you would be financing in-house.
Just went through this, hardly any dealer wants to disclose the" OTD" price, what excuses. One dealer did and I bought because the car was loaded and the right color and interior combo.
I work in the car business; I've been in it for over 35 years and in fact I train F&I Managers. I can tell you that there are banks who put prepayment penalties (Usually $100 or so) right into their finance agreements, if a loan is paid off too soon, say 90 days. What a Finance Manager should not say is that you CAN'T pay it off early. You can. But if you pay off a loan too early, there may well be a penalty. It's there because lenders aren't really interested in financing cars for 30 or 60 days.
When I bought my last car, I got $500.00 off the cost of the car if I financed it. I was also told the big lie and had to make at least 3 payments, or I would be charged a penalty. When I got my "payment book" I paid in the first payment the total loan except for $2.00. For the next two payments I paid $1.00 plus 4 cents in interest. I was never charged a penalty.
I had one tell me I could only buy gap thru him at dealer & was almost $1000.. my bank was within parking lot distance & had just ask & it was around $300 .. bought my gap that evening at bank.. finance guy got hateful so I told salesman get me another manager or lose his deal.. they guy was fired the nxt wk.. same type bull
These are questions for the finance office, not while you are negotiating the price of the car. Three questions you want to ask finance office: 1. What is your base payment? (This is the monthly payment without any added stuff they want to sell you, to make sure it matches what sales person said.) 2. What are the actual prices of each plan, not what the payments are? 3. Will you show me my approval? You want to see if they are adding a percentage to your rate that the dealership will receive, not the bank. Tip: Do not discuss financial situation on the showroom floor. SSN is insecure and not needed. Big lie: Is there a pre-payment penalty on this loan? They will lie and say you have to make a specific amount of payments. This is false because the car dealership will lose money because the bank didn’t make money from you.
Hello! I watch videos with the captions on- they are on the lower mostly left portion of the screen- your information pop ups are hidden by captions- and they go kinda quick before they are clearly visible- I wanted to let you know! Thank you so much for your videos!
Its should be illegal to advertise a low lease or purchase price and then NEVER have that available when you go in to buy. That special $189 a month is always $300+ a month.
The best way to refuse something is to just say "No", with no explanation. It is the explanation that provides the lever to get you to change your mind.
@@Jillousa I learned it from a guy I used to work with. The boss would propose a software change that really made no sense and he would respond by just saying "No," and walking away. Made my job so much easier when I decided to copy him.
Get preapproval from a bank or credit union before going to the dealer. You almost never want to get financing through a dealer. And never buy a service contract or extended warranty while at the dealer. It's not usually a good deal for the buyer, which is why they try so hard to sell you one. And if you do want one it will always be cheaper the next day or month. And you want to be sure you're happy with the vehicle before you purchase any extended service or warranty. If you trade it in 6 months, or the car is a lemon that money will be wasted.
Always negotiate actual price, NEVER THE MONTHLY PAYMENT. Buy the vehicle you need(not want)and always walk out on the deal when you are not comfortable. Buyers remorse is an awful feeling. Always do your homework too, shop on line first, have your financing lined up, buy what you can actually afford. New vehicles are wonderful, but always account for the costs before hand, 20/20 vision works better forward in this case rather than backward.
I was able to refinance a new vehicle purchase within a week of purchase. I was able to get the $1000 rebate for financing at the dealership, but then refinanced at a local credit union the next day to get a lower interest rate. The loan went through within days.
Here’s one for you. A dealer would not come off the price of a 1 year old BMW. $40,000. I hired a guy who goes to the Auction. He bought that exact vin # two weeks later for $28,000. Good deal for me but the dealer? What a bunch of idiots.
They like to ask, what kind of payment would you like, to which I say, $1.87 or less. After a chuckle they say, “no really,” so I say, if we’re talking payments, that’s my target. Not much laughing after that, but we move on to out the door prices. In reality though, after hours of haggling and numbers games, if they let you leave with a vehicle, they made all the money they needed to.
seems common sense to me. I always ask the price and not payment. top tip: tell them to build your package as per YOUR requirements and say you'll take the finance IF its at a good rate as you'll be shopping around. these days most credit cards do 0% on both transfers and purchases for 2 to 3 years. why would you even need dealer finance unless its a killer rate and you have negotiated the product price down to marginal. use the finance to negotiate the price down as much as possible and take it out. then clear with 0%credit cards
Stupid me....When I purchased my car, they said they had a special plan for oil changes including tire rotation, etc. that I could add on to my purchase. Stupid me thought, ok, that sounds good, not thinking this was being built into my auto loan and now I am paying interest on oil changes for 2 years......How Stupid of me to agree to this!!!
You want a good tip I got a CPO clearly needed tires also bought extended service plan paint good money for it to so I took it back this needs tires talking back and forth they wouldn’t budge but hey I can went right into finance office cancelled esp I said if I’m fighting with you now for tires imagine if something does go wrong and can’t use the warranty so long story short I got my esp plan money back and bought brand new Michelin
I got my numbers from my credit union and gave the finance team a chance to meet or beat the rate. I arrived at 2pm, to do this. The dealership dragged their feet, until after banking hours and said that my info was false, but they had a higher rate, just sign here. I walked out, waited for snail mail to deliver my credit Union info and returned several days later. Funny isn’t it?
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Who wore their "knowledge is power" t-shirt better? Ray or Zach?
dad rules. always.
Why, Big Papa Ray of course!
Ray incorrectly wrote the slogan . If Ray went to college and had an 8:00 o'clock class, he would know that "Knowledge is Power, But Sleep is More Powerful than Knowledge". I think if that was written on his T-shirts, they would be hot sellers in every college. LOL.
Zachy, showing some ink😆😆😆
@@victoriachanel2493 yea says dad is #1
The best way to tell if a car salesman is lying, his or her mouth is open and words are coming out!
It's really a shame that people can't just go out and buy a vehicle without being schemed and played.
Exactly, and I think a new type of system for buying vehicles should be developed. A simple method with no scams.
@@colorwalk80 Agreed. Am wondering how a new system can be developed. Maybe the Tesla sales model. Tesla got rid of dealerships.
I wish there were a database of car purchases for the year that would include the final out the door cost of everyone's car purchased. Then we might be able to go into a dealership, ask for a fair price, and leave if our informed expectation isn't met. Dealerships won't change their business models until it is no longer profitable. As consumers we can probably make that happen, we just have to be organized and refuse to take bad deals.
@@ernestcassell3227 tesla is as big a gimmick as this too. Overpriced and overhyped.
@@tanthony3895 Agreed. Tesla has been overpriced.
Bought a car last year and we were approved by our bank for 2.49%. Finance Manager said the best he could do was 5%. Our bank was closed because they kept us after 10 pm. I was so irritated that when I got my first statement, I paid it off entirely. Glad to know that I hurt the Finance Manager by causing a chargeback. He deserved it.
That dude was a sick thief! Wow! He charged double...what a liar!
Gangster move. I love this
Love it!
At that point I would have walked out, I get being tired and worn out but still would have walked out
Could have you just walked out?
Once back in the late 80’s I got the finance manager so pissed off with my relentless questions and refusal to accept their terms that I knew were blatant over charges to beef up their end that he shamed me by yelling on the show room floor what a pain in the ass I was, threw my car keys at me and told me to get the fuck out. This was at a Ford dealership in Tempe, Arizona. I complained about his behavior the next day to the General Manager and quess what? The General Manager marched over to the finance manager and confronted him with me standing next to him and the bastard could not deny it. The General Manager shamed him by telling him to box up his things and leave immediately right in front of me. I later got the van I wanted that day for the price that was at their cost. It pays to hold your ground and complain to the correct person.
Hater. That was a lawsuit when he threw your keys at you, if it made contact that is battery. You could have won with the right lawyer. Screaming at you is harassment too. He used derogatory words.
theres always dramatics with these people. i rolled my eyes
Wouldn’t surprise me if the finance manager was back at work the next day and it was all a performance.
Right!? @@Sashazur
@@Sashazur But the customer got his price !!!
We bought a car 6 years ago. Husband has excellent credit and they advertised 0% interest for 60 months. Finance offered us 3.99% and when I questioned their advertised amount of 0% then he "looked farther" and found 1.99%. We took that, yet I knew they weren't being honest. I've learned so much from y'all. I won't concentrate on only one vehicle, so when/if the deal doesn't go as I plan, I won't be afraid to walk away.
Very often the manufacturer will offer 0.0% OR a rebate. Sometimes one is better and sometimes the other is better. Ask to see it both ways and you decide which is better for you.
I feel like I won when I took my loan out for 5.0% then paid it off in 2 weeks after getting a lower price on the car by taking the loan.
I tell them from the get go, that I’m not buying anything extra, just the vehicle. Also, NEVER let them run your credit, if you have your own financing. I’ve walked away when they insisted and said it was required by the Patriot Act or some other BS, it’s not!
Same happened to me. They insisted on doing their own credit check giving some BS about "five day either/or" in case my lender (USAA) didn't fund the already approved loan. Schmucks. I walked out the door.
@laurad1953 did you get a good deal from USAA?
This is the part I don’t understand. If I submit my information to the dealer in good faith to secure financing. And the bank approves me at one rate and the dealer raises that rate for the purpose of his own financial gain without disclosing it to me how is that not fraudulent.
Because govt deemed it Capitalism
I had never considered this being a thing because yeah, it's sounds completely illegal. Trying to tell me a car is better or worth more than it is is shady but expected, telling me I got approved at a 5% when I really qualified for a 2% seems completely fraudulent. Glad this video was made. What an eye opener.
It's not illegal because you're allowed to make whatever agreement you want. If they offer you 8% and you agree, there's nothing illegal or immoral about that. If you make a deal with someone else for 4%, there's nothing illegal or immoral about that either. You have to take responsibility for agreements you make.
boy are you gonna be shocked when you find out the credit card rates and how much they are over base %. It is YOUR responsibility to know your best rate or try to negotiate it with the dealer if you think it is higher than it should be.
I enjoyed boning a finance department once when I knew my credit was outstanding 800+ but this guy got me a mediocre rate. I paid that note off with the bank within 30 days. Hope they enjoyed that "charge back". I learned my lesson from that experience & check with my own banks these days. Bottom line know your worth.
Get the financing lined up, and don't accept he what kind of payment do you want, I'll let the bank worry about that, this works every time.
For me, question zero is "what is the 'out the door' price?"
Then I pull out my financial calculator and figure the payment. Having visited my Credit Union prior to shopping I already know my interest rate.
I must be a terrible customer.
I do the same thing. I also take a book with me.. whenever they make me wait, I pretend to be busy or actually read. that way I remain alert and stick to my points. There is one more thing I do.. its usually the finance guy who tries to add on bs for 500 each etc. i keep saying no for all that and occationally praise their dealership and car to him. works great for me.
They won’t like u. They will remember u and if u take it to their service department, they’ll screw u over.
@@webguy943 Possibly why I hate going to the dealer service department. I breath a sight of relief when the warranty finally expires so that I am no longer required to use them.
@@webguy943 Depends on the dealership. One I worked at the techs and service department had nothing to do with the sales people. Techs and parts department hung out and sales people... Did weird pagan rituals for all we knew. Never had interaction with them. Sales didn't come back to service department, either.
Finance guy really didn't like me using my loan calculator. When it became obvious our numbers were quite different he finally got frustrated and tried to convince me I owed the extra $1200 for interest the loan would accrue until my first payment.
Just bought a new car on Monday. Price was negotiated on out-the-door price. When I got to the finance officer every add on was marked as 'no'. Of course I would have accepted anything they wanted to add at no change of price to me. I also knew the finance amount and interest rate so I also knew the monthly payment and length of loan. It was pleasant for both sides since there was nothing to get tense about with everything settled at the out-the-door price accepted.
I bought my last new car a couple years ago from a mom & pop dealership with, I am guessing, fewer than 20 employees. There was no sales manager that I could see and no F&I ( no high volume sales, but very low overhead). The salesman gave me 3 options with 3 prices- pay cash, finance at .9%, or finance at 3.5%. The size of the monthlies were never discussed, just the OTD price.The 3.5% for 60 was the best OTD price, of course, about 14% below MSRP. The vehicle had no added options and was already the cheapest of that model on the lot by far (including about 15 other dealerships in my half of the state). The deal saved me about $1800 over paying cash. I don't recall the salesman mentioning a 90 day wait to pay off the loan. I think I probably heard it later on you tube. I really can't be sure. I paid the loan off in 60 days. Had I known for certain that the bank required 90 days, and I do not, I would have waited another month. It would have only cost me a few dollars in interest and possibly meant a difference in the salesman's paycheck. If they work with me I like to work with them.
Walk into the finance office.
"Total price $32,600, here is my bank draft for $32,600. Let's get the deal finished, as you can see, no money for anything you want to sell!"
Works for me every time!
U still was ripped off ? Lol
What does that mean?
The finance 90 days lie is so true. Every Acura dealer told me to wait 90 days at least before refinance. What a bunch of crooks. smh
That's to get the dealer past the date where they get the finders fee (or interest rate spread) from the bank.
@@briantracy1324 wow should of known
How can a dealership up the interest rate over what the bank says? And how do they get the extra rate?
Always love Kimberly's guidance and as always she is looking stellar!
I actually called my bank and asked if they will charge me for paying my loan off early before getting pre-qualified. They said no, they do not charge their customers for that. I asked this before I even walked into a dealership.
I purchased a SUV for my sister and got additional cash back for financing through the dealer ship and the fiance man said I can pay off after three months so I called wells Fargo and they said I can pay off before the end of the month so I did. Only paid three dollars interest...
I think the biggest takeaway here is to always shop for financing before going to the dealer. Now you know exactly what rate you are approved for and its up to the finance person to match or beat it rather than try to scalp you.
Yep!
This has always worked for me!
You guys are all sooo adorable. I’m getting more and more confident about approaching my rental car purchase with each of your edu-taining videos.☺️🙌🏾I’m a woman and I’ve been terrified because I don’t think I have anybody that can go with me into this Lion’s den of rental car dealerships but one thing about me is I always do tons of research before I proceed into challenging situations. I’m almost ready to go AT these wolves! Thanks guys.Yeah!!!💪🏾
Good information. I am fortunate to serve on the board of directors of a local credit union. Our director makes sure that we are educated on all aspects of lending, particularly auto loans. I did not know this stuff before my time on the credit union board.
Thank you for that! So glad you're here
Kimberly is such a wealth of inside info. Thank you Kim for all your honesty.
I disagree with your statement regarding paying cash. In my recent purchase while in the F&I office after we had agreed on a potential rate and all other issues I almost laughing asked what incentive there was for paying cash. The answer was $750.00. So why would I take financing ( and lose the $750 in savings) just so I can wait until I get my first statement and then pay off the loan???? I can see no reason to not take the $750 savings.......What am I missing?
Just bought a '25 Tucson Hybrid (in high demand) for $300 over invoice with no haggling. Thank you for your guidance!
I'm shopping for a new car and this is the most knowledgeable I've ever been in 20 years. Thank you guys!
Same!
I hate the "game" of car buying these days. A lesson I have learned is if you are pre-approved make sure your lender is open when you buy your vehicle. The dealer may tell you they cannot verify your pre-approved rate on your lenders website and since it was Sunday they could not contact them. This happened to me and my wife with both of us having credit of 793 (me) and 805 (her). Had to accept a slightly higher rate if we wanted the car that day. The most powerful thing you can bring to a car dealer is your willingness to say no and walk away.
When I go into finance office it is very quick. From showroom I've already come up with the total out the door cost; so, when I go into finance office I write a cheque and sign papers.
Kimberly is great.. Clear and concise. If I asked to see the loan rate and the FI manager refused...I'd give him an earful and then walk out!
When I bought our new Rav4 last fall, the F&I guy set us in front of a big electronic console and showed us "The Menu." I knew it was coming and when he asked " which combination of features" I wanted, and I told him "none," he was stunned. He said, "well, I have a bit of flexibility on those numbers," and I told him "I'm frankly not interested in any of it." He brought in a closer to twist my arm a bit further (but not too severely) and I said "I'm just not interested in any of these at any price. " He finally folded up his electronic menu, had me sign the papers, and I got the sale closed for exactly our negotiated price, which included the factory rebate plus a nice dealer discount off MSRP. I was happy. More importantly, my *wife* was happy.
mean u didn't even buy a toyota hang on rear view mirror stinky forest green scented hanging tree
That story made me happy.
How much off of MSRP? How do you go about getting that discount?
I think there should be some truth in lending when dealers mark up loans
Not gonna lie. Been watching these more lately for Kimberly.
Huh? No man, stop bottom fishing.
yup, i'm here for the finance deets
Car dealerships hate me. When the salesperson says they have to go talk to someone, I say, "I'll go with you". If the meeting is about me, I want to be there. If they say no I can't go, I just leave.
This philosophy is dumb and counter-productive. Are you that insecure that you feel you must disrupt their SOP ??? For what reason, they will never have a confidential conversation about your deal with you sitting there so the best likelihood is the Sales manager will step in and you will probably get a worse deal, just to teach you a lesson, for being an a-hole. Learn how to negotiate and let them do whatever they want as you will be in control. What they do behind the scenes is 100% irrelevant.
@@rm-dc6tx - I wouldn’t use Stephen’s strategy, but there’s nothing wrong with it. I’m the customer. It’s never your place to teach me any lessons. It’s your place to serve me. Keeping as much of my money as possible - yes, even by trying to disrupt the games dealers play to try to take it - is not “being an a-hole.” It’s being a responsible consumer. My job is to get the exact vehicle I want, for the least amount of money possible, with the greatest number of options possible, under the most favorable terms (for me) possible with zero regard for the dealership or salesperson. Many, if not most of them are trying to screw me every way they can. In doing so, they’ve established the rules for the transaction and given me permission to play by those rules. Thanks to the internet in general and TH-cam in particular, going to a dealership is now like watching a magic show where you know the trick behind every illusion. It may not be as much fun, but the customer is much less likely to be fooled by the so-called magician. Dealerships that give customers exceptional deals and great customer service can make their money in legitimate financing profits, service departments and repeat business. Those that focus on short-term gain by screwing over every customer they can? They deserve to rot.
@@rm-dc6tx I can tell you from experience, sometimes the conversation has nothing to do with your question but made to look like it and they already have the answer before going to the managers. Some things are for show (doesn't matter the business).
In the comments of one of these types of TH-cam videos I heard of a family that walked out when the salesperson went to their manager and this sales person asked where you're going and they said they were going out to lunch while you talk to your sales manager. Well the salesperson stopped that game!
I really love the info you provide. Please do a video on the "charge back" you mention in this video. That is something I do not understand.
After watching your many videos about buying a car, I really appreciate the "mom & pop" new car dealership that I had dealt with since 1983. I told the owner what I was looking to buy and all the things I wanted. He never tried to "up sale" me. He wrote down on a piece of paper, which I could take with me when I left, the breakdown of all the costs and the "drive out the door" price(no other dealership would ever do that because they were afraid I'd take it to other dealerships). Without even asking, he wrote down the dealer discount I was getting as well as all the other rebates. There was no "F & I" to content with. Everything was straight forward and no haggling was necessary. His price was always better than the other dealerships in my area with whom I had to haggle price. Because of his honesty and transparent way of dealing with people, I remained a loyal customer until he retired and closed down the dealership in 2019. Sadly, that type of dealership no longer exists.
The charge backs don't affect you but dealerships do try to stop you. I'll give a short rundown.
So when a dealership writes a loan, they and the lending agency are both making money off you. They chage interest to do this. Those two agencies are expecting you to make as many payments as possible so that they can get as much finance profit as possible.
Car loans nowadays simple interest pretty much, unlike the old days when they were all precomputed interest that you had to pay upfront. So the lending agency and the dealership need you to keep making that payment to get the most money. If you pay off or refinance immediately, all they did was loan you let's say $40k to make a hundred bucks on that $40k. Not a good investment or use of loan funds.
The charge back is the lienholder charging the dealership a precompted interest penalty for you paying the vehicle off too soon. Sometimes in the case of rebates or programs that require you to finance with the manufacturer, the dealership also gets charged back against those items, because the manufacturer is not your friend and gave you that money intending you to pay it back with interest through financing and you're not doing that so the manufacturer takes that money back from the store.
@@Oxios thanks
I hate when financial officer add cost protection to my finance when I told him no, until I found a month later , I have to call that sucker many times until i got straight out
💖Ohhhh! Dad has all the knowlege. Zach is smart enough to have listened and learned. Dad can learn from Zach too. 🤔🤨Y'all's mutual adoration and respect for each other, your integrity and caring for people is power. You're a power team! If I had to lean one way, it'd be Ray, the Patriarch.
Welcome to Ray’s gun show! And Kimberly went hard in the paint with the knowledge in this video - Thank you!
I just bought a new Hyundai. The rate and payments were all negotiated by the sales manager (2.75 %) I qualified for 0% but would have lost the cash rebates . When I went to finance he pushed and pushed but I just declined everything extra in the packages. They were all very over priced and I didn't need them. For example they wanted $760 for a Service plan that included just oil changes and tire rotations for six years. Problem is Hyundai already covers three years for those services. So he was trying to scam me to pay $253 a year for services which would cost me about $120 at current rates pay as I go. I left that dealer with my nice low original payment.
Here is what I learned: I can screw over a dealership that I don't like by immediately paying off the loan.
@Fred Wills You got it, Fred!
Serves 'em right for padding the interest rate
Frickin crooks. Jesus. This is sick.
yes I did twice over the years once when I realized that the bank that the dealer was using was the the bank I had my accounts in and they were advertising 2% lower new car loans so I refied within 30 days, the second when the finance guy was just being a jerk on the hard sell stuff which I refused to fall for and we had a 'difference of opinion' which got loud so I went to my credit union and refied with them, my way to send a little message to him his tactics were not appreciated.
Always immediately pay off the loan
It’s cool that you seem to have plenty of fun helping others with valuable information.
The finance dude is there to recoup any discounts sales gave you. When presented with warranty options, say no several times. You’ll find they will lower the price a couple times buy asking are you Cosco or Sam’s club members. Doesn’t matter if you are or not, it’s just a way of them discounting prices without looking like they are and your getting a deal.
The more I watch this fiasco, the more I realize the atrocity of car dealers and how the objective of these crooks is to complicate and decieve. It's just a tangled web of sociopaths hell bent on stealing as much as possible. Wake up and see this for what it is. Think about this...these guys have oodles of videos to try to explain and educate us poor suckers on how twisted these organizations have become. How about this, quit screwing people and try ethics. These are sick operators. Downright gross and pathetic.
I like that you used the word “sociopath”. That’s exactly what they are. No conscience. They look people in the eyes and lie every single day. They deserve no respect.
That's why they are called "stealerships".
Kimberly was sweet to do thins interview! Amazing information!!
Dont walk into a dealership without first doing ur homework. Know ur credit scores. Go to a credit union to check interest rates. When the salesperson asks what you want ur monthly payment to be, say “ZERO!’ I want the out the door price and interest rate, then I’ll see if the payment works for me. Not there to negotiate monthly payments, just the price of the car.
This is probably one of the best and most effective videos yet! Thank you.
You guys, I have to thank you for letting us share in the pleasure you seem to be having working together, and for sharing such valuable information and insight on such an entertaining way.
You also definitely, really, really, want to know is what type of loan is it. Is it simple interest (unlikely but possible, better for customer) or rule of 78s (better for the lender, and, of course the dealer). You guys should really discuss this. Rule of 78s is front end loaded on the interest so if you pay off early you don't save nearly as much and their hand is deeper into your pocket.
But then precomputed interest would be as such that they don't have to care if you pay off the car early. The dealership already got their cut. Any customer of mine got a simple interest loan. The market is switching over. Maybe it's my area and the way the lenders operate here, IDK.
Very interesting!
A good book to read if it’s still in print “Don’t get taken the next time you buy a car” by Remar Sutton.
Always shop your financing with your bank before going to a dealer! Know the amount you can finance and at what rate. Never buy based on payment, buy based on cost and the rate and term will give you the payment!
I actually used the,”I’ll wait three months to pay out loan for the lower price. “ so I get a lower price and the dealer made his $$ on the loan”. Having said that next time I WILL be asking to see my approval from the lender. Thank you !!
I’ve learned about the “charge back” and how it can be used to my advantage...
Everything is a negotiation
I've never had anyone in finance tell me I couldn't pay the loan off early. So that is a big lie I've never heard.
Certain bad actors still exist in the industry, especially if they were trained by unscrupulous old school types or are old school themselves (just because they're still in the game doesn't mean they adapted). I've had customers ask me that question quite regularly, which they wouldn't really have to if people weren't still getting lied to.
F&I managers will often tell consumers with poor credit that the finance company will not approve the loan unless the take, ie-credit life and disability insurance. Just one example of F&I not being truthful.
In rare cases the dealership and lienholder may be trying to protect themselves because the customer could only get approved on a beater and they let other cars go to late payments or repo because of needed repairs. The warranty would protect the likelihood of still making the payment because any needed repairs would potentially be covered later. If it's EFG or JMA warranty it'll actually cover things, for instance.
But if the lienholder doesn't approve a warranty being added to the financing there's no reason for finance to sell it. The loan won't get paid out by the lienholder.
car dealers, even today, with all the so called "knowledge" on the internet, still are doing the same things...only now, they just tell you "good luck and go to another dealer"...I just had it happen, literally yesterday...and how many dealerships secretly record people in the showroom or offices????
Just bought a CPO last week when the finance guy started I just nicely said I just want the car! Quickest deal I have ever made! Out in 10 minutes.
U guys are hilarious....love the father and son chemistry 😄 .. love the T-shirts gotta have one. Wealth of useful information....thanks for sharing 👍👍
#1 the monthly payment is no way to negotiate a vehicle purchase. #2 a person should not need a dealer sales or finance manager to tell them their creditworthiness. If anyone use these tactics the dealer will know that you have no idea what you are doing.
My question is this: Shall you sign for a car loan from the Dealer (their Financial Institution) or from a Bank that you have business with?
Whoever gives you the best rate.
I had no idea the dealer might be jacking up the loan interest rate on a car loan. Very useful information.
By the way, I've always checked with my bank before going to the dealership to buy a car. I know what the bank will charge and how much they will lend. I tell the finance manager that if he or she can beat my bank's loan terms, I'll go with the the dealership's arranged loan. They usually beat my bank.
Always a safe bet.
Doing the same thing. USAA offered me loan at 1.89%.
You two are a pair of funny goofballs bringing good to the car buying public - THANK YOU!
I don't know which is more perplexing: How anyone with a good conscience can be in the car business or how people making a living in the car business can do so in good conscience.
So don’t discuss paying off the loan early until after the deal is sealed or the FI might try to jack up price to preserve profits.
My comment does not really relate to this video, but the sum of all of your videos. It is very helpful advice. I just bought a car, and used the negotiations techniques that you described. With some steadfastness, I was able to get the deal that I wanted. Thanks for the helpful advice and the role playing, it helped.
A little late to the video, But another big scam is the extended warranty. 10yr./100,000mi. Most new vehicles come with a factory 5yr./60,000mi. You would only be gaining another 5yr./40,000mi. of warranty.
Here's an honest mistake that I received from someone who sold me a car by owner. Her car recently had tires put on with a tire package that she said I would have when I purchased a car. I end up having an issue with one of the tires on the car down the road and that particular package told me that it didn't apply to me because I was the new owner. I do not believe it all the previous owner was aware of that or tried it to be deceitful in any way.
This happened to me this past weekend. The Dealership tried to hide my approval rate. I have a good credit score and I knew what my rate should have been around 3%. I did some back calculations and they marked it up to 8.5% and I gladly walked out of the dealership and did not purchase the vehicle.
Why did you not get you financing in order before you went in and wasted your time?
Yea if you were doing dealer-arranged financing u should have negotiated your rate BEFORE you went in the F&I office to sign. And I mean negotiated with them via EMAIL and/or TEXT. The only things you want to do when you go in to the dealership is to test drive/examine YOUR vehicle (the exact one you're buying) AND to sign the paperwork. All the talking, negotiating, credit check, decision making can be done without you physically there in the dealership. Remember that, especially nowadays with Covid you wanna limit your exposure (and yes tell them that!).
@@bindingcurve because I wanted to see they would bet the rate. I had a 3% interest rate in my back pocket from my credit union bank but after they did that I didn't want to do business with that dealership. I was going through the motions like yaa said to do. I didn't think it waste of time I learned alot from that encounter
@@paulden3158 I agree with you and I attempted to negotiate the price would not move on the price so I went to show them that I was serious about purchasing the price. Actually, they didn't nmove on the price until I left and then called my phone and drop the price 1300. I was done after that. I wasn't worried about the interest rate because I had an approval rate of 3% from my bank in my back pocket so I was trying to see if they could beat and could get the price even lower having them think that could make some money on the back end and drop the price then hit them with my bank paperwork.
@@Jrrucker1 They dropped the price and you had financing so you did not buy the car out of spite? Lesson you need to learn is not to let a dealership piss you off. Walking out should be a negotiating tactic, not a emotional response.
The best way to do it is not finance a car to begin with. The only thing you should ever be financing is a house/condo/townhouse/apartment.
You can use financing as a tool to get a better price on the vehicle. Then, simply pay it off as soon as you get your first statement.
Yep to get the best deal finance because the dealership thinks they're going to make money over the period of the loan, and then pay it off. When I worked in car sales whenever someone came in and said I'm paying cash it didn't matter we preferred finance customers every single time and we would give them a better deal every single time. Also most people that say they're paying cash are not paying cash their financing through a different bank so you just have to find a way to match that rate. Most of the time the dealership can do that.
I actually used it to bring my credit from the 500s to over 750 in a few years. Sometimes it's worth it.
Id love to know how any of you are making enough money these days to buy a new car with cash. Most people I know have $5k at most saved, and thats in a good month.
If you were planning on paying off the loan in 30-90 days, why would you go through all the trouble of financing the car through the dealership or the bank? Just get a cashiers check from your bank after you have negotiated the price of the car and go back to the dealership and present the check and get the car. Refuse ANY and all extra warranty stuff, these are MAJOR money makers for the dealerships. Also watch all those FEES they charge you and question each one and simply refuse any that are unreasonable. Another one are the so-called paint protection schemes. Another big money maker for the dealerships. Just wax your own car later on. If the dealership wants to sell the car bad enough, they will negotiate, otherwise just walk out. This is a major, major purchase, you are the customer, you are in control. CHEERS.
Exception to the lie - I bought from a Nissan dealer. Two weeks later I got a letter from them with the loan number. I went to the web site and got the payoff value. I paid off the remaining $13,000 of the loan and paid $23.xx in interest. I'm now broke, but not paying rent on someone else's money!
another question to ask is "how many banks approved me and why you selected the one you picked out"?
The level of criminality discussed here is shocking
Thing is marking up the loans is not illegal. Lobby to change the laws and then we can better hold dealerships accountable.
Dealers are criminals
What about dealer hold backs?
I haven’t watched the whole video but have read the comments, I didn’t come across any that mention that.
That number can add up to quite a bit at the end of the month to a dealership.
For people who don’t know I will do a very rough break down; the manufacturer will give a dealership a certain figure based on the amount of vehicles they sell. People are kind of aware that the best time to go is the end of the month, but I don’t think a lot of them understand why.
Let’s say you go to buy an F150, on top of the other profit they have worked into the deal, there might be 2-5k in manufacturer cash to them tied to that vehicle.
So at the end of the month if they meet the quota there might be 50-100k (very rough figures) in cash coming to them from the manufacture.
Let them know you are aware of the holdbacks and see if you can give them a little squeeze.
I hate car loans because there are so many moving parts. Do not negotiate on the length of the car loan. Dealers will agree to a lower monthly price, but then extend the car loan out much, much farther. In the end, you pay a far greater amount overall even though it looks like you got a bargain with a smaller monthly payment. I am lucky because now I can pay cash. But I had to save every penny and dime to get there.
A car buyer should never trust anyone at the dealership for anything. The F&I manage is the worst, period.
The only question a car buyer should always ask the F&I manage is "what is the buy rate?" If the F&I manager refuses, the car buyer can be certain the F&I manage has bumped the interest rate. If the F&I manager refuses, just walk away.
A couple of years ago, at a Honda dealer buying for my daughter, the F&I manager refused to disclose the buy rate. He had offered a rate of 4.3 percent. I asked for the buy rate, he said "4.3 percent is the rate the dealer is offering and suggested I could refinance."
I said no, nope, nada and stood up to walk away. He immediately mumbled a bit and asked me to wait a few moments. He disappeared and returned a few minutes later and redid the deal at 2.3 percent (which was the correct rate for my daughter's credit score and profile).
Good job Douglas! Yes, you're right. Ask for the buy rate! Thank you so much for being here!
If you must get a loan, get it from your credit union. If you don't bank with a credit union you are already getting ripped off.
If you don't know your own credit information and score, you surely shouldn't be taking out a loan at a car dealership. I would suggest that if you can't pay cash for the vehicle you are likely already wrong in financing any vehicle.
I know this because I've been there, done that. I was an idiot.
I did finance my last vehicle, but I'm paying 1.86% and the money I would have spent is making me gobs of interest. That is the only reason to take out a loan on a vehicle. If you can't afford to buy it cash, you're buying too much car.
Likewise, if you have a 30 year loan on your house, you bought too much house. (Only do 30 year loans on property if you're doing it for income ....and then know why you are doing it that way.)
"That is the only reason to take out a loan on a vehicle." Simply not true. You can use financing as a tool to get a better price on the vehicle. Then, simply pay it off as soon as you get your first statement.
Funny. I was told this big lie just last month. The sales guy told me that I needed to make monthly payments for at least 6 months or I would get fined $1,600. I got an OTD price, wrote the check and drove off. Don't let them force you into a con job deal.
Was this on the sales floor or with the F&I guy? Just wondering if your negotiated OTD price was with them assuming that you would be financing in-house.
Just went through this, hardly any dealer wants to disclose the" OTD" price, what excuses. One dealer did and I bought because the car was loaded and the right color and interior combo.
I work in the car business; I've been in it for over 35 years and in fact I train F&I Managers. I can tell you that there are banks who put prepayment penalties (Usually $100 or so) right into their finance agreements, if a loan is paid off too soon, say 90 days. What a Finance Manager should not say is that you CAN'T pay it off early. You can. But if you pay off a loan too early, there may well be a penalty. It's there because lenders aren't really interested in financing cars for 30 or 60 days.
When I bought my last car, I got $500.00 off the cost of the car if I financed it. I was also told the big lie and had to make at least 3 payments, or I would be charged a penalty. When I got my "payment book" I paid in the first payment the total loan except for $2.00. For the next two payments I paid $1.00 plus 4 cents in interest. I was never charged a penalty.
I had one tell me I could only buy gap thru him at dealer & was almost $1000.. my bank was within parking lot distance & had just ask & it was around $300 .. bought my gap that evening at bank.. finance guy got hateful so I told salesman get me another manager or lose his deal.. they guy was fired the nxt wk.. same type bull
These are questions for the finance office, not while you are negotiating the price of the car.
Three questions you want to ask finance office:
1. What is your base payment? (This is the monthly payment without any added stuff they want to sell you, to make sure it matches what sales person said.)
2. What are the actual prices of each plan, not what the payments are?
3. Will you show me my approval? You want to see if they are adding a percentage to your rate that the dealership will receive, not the bank.
Tip: Do not discuss financial situation on the showroom floor. SSN is insecure and not needed.
Big lie: Is there a pre-payment penalty on this loan? They will lie and say you have to make a specific amount of payments. This is false because the car dealership will lose money because the bank didn’t make money from you.
re.her firts question. You can't ask the finance manager for the "base payment" until the rate and term of the loan have been settled.
Hello! I watch videos with the captions on- they are on the lower mostly left portion of the screen- your information pop ups are hidden by captions- and they go kinda quick before they are clearly visible- I wanted to let you know! Thank you so much for your videos!
I just bring a check from the bank and forget all those shennigans.
Its should be illegal to advertise a low lease or purchase price and then NEVER have that available when you go in to buy. That special $189 a month is always $300+ a month.
You need to negotiate the out the door price. Do not get suckered into addons. They are all scams just to inflate dealer fees.
The best way to refuse something is to just say "No", with no explanation. It is the explanation that provides the lever to get you to change your mind.
That is amazing advice because I really struggle with that Thank you so much
@@Jillousa I learned it from a guy I used to work with. The boss would propose a software change that really made no sense and he would respond by just saying "No," and walking away. Made my job so much easier when I decided to copy him.
The biggest lie, and the most common one, is "The car is here on site and it is still available".
Get preapproval from a bank or credit union before going to the dealer. You almost never want to get financing through a dealer. And never buy a service contract or extended warranty while at the dealer. It's not usually a good deal for the buyer, which is why they try so hard to sell you one. And if you do want one it will always be cheaper the next day or month. And you want to be sure you're happy with the vehicle before you purchase any extended service or warranty. If you trade it in 6 months, or the car is a lemon that money will be wasted.
Always negotiate actual price, NEVER THE MONTHLY PAYMENT.
Buy the vehicle you need(not want)and always walk out on the deal when you are not comfortable. Buyers remorse is an awful feeling.
Always do your homework too, shop on line first, have your financing lined up, buy what you can actually afford.
New vehicles are wonderful, but always account for the costs before hand, 20/20 vision works better forward in this case rather than backward.
I was able to refinance a new vehicle purchase within a week of purchase. I was able to get the $1000 rebate for financing at the dealership, but then refinanced at a local credit union the next day to get a lower interest rate. The loan went through within days.
hello friends It seems the moral is assume nothing. Force everyone to be explicit and pin them down to exact numbers.
Always get approved thru your Credit Union. Then go to the dealerships.
Here’s one for you.
A dealer would not come off the price of a 1 year old BMW. $40,000.
I hired a guy who goes to the Auction. He bought that exact vin # two weeks later for $28,000.
Good deal for me but the dealer?
What a bunch of idiots.
Thank you!!! I made that mistake with giving financial info to the salesmen 🤦🏽♂️ didn’t see this vid
They like to ask, what kind of payment would you like, to which I say, $1.87 or less. After a chuckle they say, “no really,” so I say, if we’re talking payments, that’s my target. Not much laughing after that, but we move on to out the door prices.
In reality though, after hours of haggling and numbers games, if they let you leave with a vehicle, they made all the money they needed to.
seems common sense to me. I always ask the price and not payment.
top tip: tell them to build your package as per YOUR requirements and say you'll take the finance IF its at a good rate as you'll be shopping around.
these days most credit cards do 0% on both transfers and purchases for 2 to 3 years. why would you even need dealer finance unless its a killer rate and you have negotiated the product price down to marginal.
use the finance to negotiate the price down as much as possible and take it out. then clear with 0%credit cards
Stupid me....When I purchased my car, they said they had a special plan for oil changes including tire rotation, etc. that I could add on to my purchase. Stupid me thought, ok, that sounds good, not thinking this was being built into my auto loan and now I am paying interest on oil changes for 2 years......How Stupid of me to agree to this!!!
You want a good tip I got a CPO clearly needed tires also bought extended service plan paint good money for it to so I took it back this needs tires talking back and forth they wouldn’t budge but hey I can went right into finance office cancelled esp I said if I’m fighting with you now for tires imagine if something does go wrong and can’t use the warranty so long story short I got my esp plan money back and bought brand new Michelin
Why would you have to commit to a loan and then call after the first statement to find out you cannot pay the loan off early? Just asking.
I got my numbers from my credit union and gave the finance team a chance to meet or beat the rate. I arrived at 2pm, to do this. The dealership dragged their feet, until after banking hours and said that my info was false, but they had a higher rate, just sign here.
I walked out, waited for snail mail to deliver my credit Union info and returned several days later. Funny isn’t it?
If you can afford to pay off your loan in 30 or 60 days, why not pay cash up front and save yourself the grief?