Espi said:
Paying cash money on a vehicle is not a good choice at all, IMO. I've never put a cent down on a car--the minute you exit the parking lot, you lose the money you paid down. Why watch your money dissapear into thin air? Remember that vehicles "depreciate" (which means cars are vastly overpriced to begin with) the moment you purchase them.
I have laughed at many car dealers who assumed I would down-pay cash for a car.
If you want the car now, you can get it...just get a co-signer. But, don't spend cash...none, zip, nada.
Here's what you do:
1. Next September, buy a piece of junk car (i.e. $500 or less).
2. Visit your local car dealer and DO NOT reveal you have a trade-in item UNTIL YOU NEGOTIATE THE NEW CAR SELL PRICE FIRST!! The car salesman will ask if you have a trade, and you will smile politely, as if the car dealer insulted you, and say, "At this point, we're not going to discuss that." You have to be a d1ck...remember: car dealers are corrupt. Automobiles depreciate because the car dealers jack the price up to an exorbitant amount and try to make you pick up the slack. So make the dealer work for the sale. After all, he's making a ton of money off you.
3. When the dealer makes his third offer (you decline the first two offers), say, "Oh, I have a trade in." (Watch his face turn red! LOL) INSIST ON A $1000.00 trade in value for your recently purchased $500.00 or less vehicle. Tell the dealer the car has sentimental value. If he refuses, walk out and proceed to the next dealer.
Now, keep in mind this strategy works if you have good credit or if you have someone sign for you with good credit. You can make a car dealer be your biatch for a few hours if you do what I say.
WRONG WRONG WRONG
The point isn't deprication. Even Bentley's Depreciate.
The point is, lets say in 3 years you want something else, you see a hot new car that you want to get in.
You don't want to be in a position that you owe more money on your car than it's worth.
Assume that matters to you, that's why I advice putitng 10% down. This is coming from someone who sold cars for a year, probably sold close to 150-200 in all.
Yes with great credit, you don't need a penny down, and depending on your interest rate, you might have a point. But interest rates are so high now compared to when I was in the business.. then a HIGH rate was 6 percent, now a great rate is 7.5 which means you are financing more money
first of all, your "tactic" wouldn't work, becuase if you have a 500 dollar trade, I can show you a grand for it, but in reality give you 1 buck for it.. which we did ALL the time.
that's what I am trying to get it. stop trying to otusmart people who do this for a living, that's where people waste time at, they make **** harder than it has to be. It's actually cute. I used to sell 15 cars a month on average.. you bought a car every 4 years, yet you were going to try to outsmart me.
if you came in and tried that "I have a trade" bullcrap at the end of the deal, it would depend on the deal. if it was a headringer, I wouldn't have a problem with it, I would hold back on it anyway, which wouldn't be hard becuase you made a 4-5 pound deal anyway, I doubt holding a couple of hundred dollars back on a trade would be a problem.
As a matter of fact I would be saying "oh, I can make some MORE money" (note, say you car is worth 5 grand, I give you 3 grand, there is a difference of 2, and the salesperson pockets 30 percent, so 600 bucks)
If I wasn't making any money, I would throw you out. I have before, becuase first of all you aren't respecting my job or my time. You are treating it like a game. I don't mind taking short money on a car, if you come in, it's not that much hassle and you know what you want... but the *******s who think it's a game, that come in and tell you they want this and this for 200 a month, make it happen, knowing they really have a budget of 350 a month and know that's what it really is going to take but want to see how much they can get off...
hence what we call in the business a "guerrilla pencil".. a pencil is when someone is actually working numbers on a car deal.. I would go to the sales tower and tell my manager to pencil this deal.
The first pencil, assuming you have decent to great credit, is always a head knocker. let's say you were looking at a 20k car and you had a trade honestly worth 3 thousand dollars.
The price of the car, if it was used, would be 23,995, the trade value would be 1500 if you were lucky, we would ask for 30 percent down, and your payment would be 500-510 a month.
Most sales people hate these pencils because they scare the **** out of customers. No one ever signs these... you might get one a month that will look at it and say "humm.... if I put 7000 down instead of 5000 down, what will that do to my payments" (while you are having an orgasm realizing how much money you are about to make).
speaking of, want to know a surefire way if you got ****ed or not? If this ever happens to you, EVER, say at that moment, I won't buy this car unless you drop the payment 40 bucks a month.
You get the paperwork done with the salesman and you step into the finance office and they tell you one of two things...
"Sir, I have great news for you, I was able to get a better interest rate and we knocked your payment down 40 bucks a month" (or somewhere around that... at least 20 dollars a month"
or
"Okay, all of these insurance options are already included in the price, Gap, full extended car warranty, tire car, **** shine, babysitting services, etc (you get the point)
RUN
This is what happened. They made so much money off of you, the bank wouldnt finance it all. In the last instance, they added everything they could to the deal they possibly could, becuase if the car itself is just 23k, and you agreed to pay 450 for 84 months, that's closer to 28-30k, and they load the back end of the deal with extras..
you know you got ****ed if you both happens, which I have had happen before. I sold car and the payments were 84 months, 2500 down, 440 a month, and both the husband and wife had 800 beacons... and they had two trades we held 2 grand back on each. Their payment dropped to like 370 with every possibly warranty you could imagine.. I think we made 16grand off that deal front and back.. I pocked 3500.
the stories I could tell you.
that's how my company got alot of it's startup capital, and how I learned how to really sell computers.
back to the trade value thingy you were trying to pull. just becuase I SHOW you 1k for the trade, doesn't mean you are getting 1k for the trade. I always made it a note to overvalue the trade on paper so I can always, worst case, fall back on the "well, who else is going to give you 4 grand for this car that you even said might be worth 1 thousand dollars".. and what could they say? They knew I was right
Want to know how to get a good deal.
This is all you have to do. Buy two NADA books (whcih is what all salespeople use, not Kelly blue book and not edmunds). Assuming you want a preowned car, find out what condition your car is honestly in, rough or clean, it won't be excellent no matter what it is. Find out what a car normally retails for.
Go to a dealer, test drive the car. if you like it, take a pecie of paper, tell him this is what you want to pay for the car (1500 back of retail), this is what I want for my trade, this is what my interest rate should be which should leave my payments here.
One pencil. I got one of thoose a month,a nd the deal wouldn't take 5 mintues. My manager would say 'what in the hell are you waiting for, write it up"
knwoing what you are buying takes care of 95% of all problems.
last thing on credit.. when I fixed my credit, and I got this from the car business.. I just left everything on my credit where it was, fixing it wasnt going to do that much good. I just focused on the now and the future.
