Hell Toupee wrote:
On 8/11/2011 7:59 AM, Home Guy wrote:
Does anyone know (or do any of these buying guides ever say) if when
negotiating for a new vehicle, if an offer to outright buy the
vehicle (check, bank draft, credit-card, etc) is seen by the
dealership as more (or less) desirable vs the typical way most
people buy cars (long term payment plan). ?

How you will pay for the vehicle should be a separate discussion that
takes place after you've negotiated the price of the vehicle. People
tend to assume that dealers prefer cash, but that's not a given. If
they have in-house financing and persuade you to use it, they'll make
more money with your loan. How you plan to pay will a factor they use
when negotiating the purchase price with you (the infamous example is
the standard salesman question, "How much do you want your monthly
payment to be?" You reply: you will decide to buy based on the final,
actual price of the vehicle, not by the monthly payment.)

Be non-committal and tell them you won't decide on how you'll pay for
it until after you settle on the purchase price. If they do finance,
they may specifically make an offer contingent on your financing with
them. Run the numbers and see if it's worth your while. If you were
planning on financing, compare their rates and terms to other lenders.
If you can buy the loan cheaper elsewhere, tell them so. They may be
able to negotiate that, too.

Same for trade-ins - don't bring up your desire to do a trade until
you've negotiated the best price you can get for the vehicle you'll be
buying. Negotiate the trade-in value afterwards. You should have done
your research beforehand to assess the fair trade value, decide what
you'll take for it, and what you'll do if you and the dealer can't
agree on the trade.

To sum up: all of these factors (purchase, payment/financing, and
trade-in) are separate transactions. Mixing them up will confuse
things, which almost always works to the dealer's advantage. So don't
do it.

And remember, you must always be prepared to walk away...and you need
to make that clear. Or they'll steamroll you.

The MAIN object of a dealership is to move cars out the door. Simply not
losing money on the deal is sufficient.

All the car companies (Ford, GM, etc.) monitor the finances of their
franchise holders. They require that a dealership meet ALL its operating
expenses (payroll, taxes, utilities, insurance, etc.) from the profit
generated by parts and service. The more cars a dealership "sells" the more
business for their service department.

Profit, if any, from the sale of NEW cars is (usually) devoted entirely to
the owners of the dealership.

The justification for this division is simple: If a dealership depends on
the profit from new car sales to keep the doors open, there will come a time
when they can't sell new cars - the teamsters are on strike, all they can
get are titty-pink Pintos, and so on. But cars need service every day of the
week.

The service department is much more predictable and stable.