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- Thread starter waloshin
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Sometimes, but mostly because they're idiots -- assuming your likelihood of paying back the loan (which they can estimate accurately) is high, you're generally robbing them of a significant source of income when you pay up front. Technically in a truly transparent economy you'd probably pay slightly more to avoid the loan. But you can use the standard psychological tricks -- I have this wad of cash (or a checkbook right here)... here, I've written a check for $14,995 -- now I can void it or hand it to you, it's all your choice. Here, let me rip it out for you....
Now my experience however, is that I would not make this a primary contention -- negotiate the price down as far as you can first, and then talk about paying for it.
Now my experience however, is that I would not make this a primary contention -- negotiate the price down as far as you can first, and then talk about paying for it.
As long as you don't get too crazy with the discount, you should be able to get them to lower the price a bit. On a new car, dealers usually make more money from the financing than they do from the sale, but used cars can be different.
OTOH, since most salespeople are on commission, it can be very difficult to turn down a guaranteed sale. Just make sure there is a bit of room for them to make said commission.
OTOH, since most salespeople are on commission, it can be very difficult to turn down a guaranteed sale. Just make sure there is a bit of room for them to make said commission.
See my perception is that used cars are even more skewed towards financing profits -- at least in the US, used car loans almost invariably carry higher interest rates. The 0-3% interest rates for new cars are almost unheard of for used cars, at least traditionally, because they're essentially a marketing expense subsidized by the car maker (the OEM pays out of its marketing budget to its financial arm to subsidize the below-cost loan as another form of incentivization).
True, in the traditional sense, they made more on the financing of new cars. Before interest rates tanked, most car companies made more money from their financing arms than from the sale of new cars. Now, with rates like you are talking about, I think that is out the window. What I was thinking of is that many of the corporate owned financing companies (GMAC, Toyota Motor Credit, etc) are less likely to finance used cars. Those are often done through third party banks. At least mine were financed that way.