That little square room.....

[ElectrolysisDoc]

It was 1996. Had to have an Explorer XLT. Had saved up $15 thousand, and was going to finance the rest. Knew exactly the options and colors and upholstery we wanted. Just needed to sign some papers.

Then it happened. We had to go the little square room to talk to the finance manager. I remember feeling like I really just wanted to get out of there. The chairs were hard, the lights were bright. Undercoating, Fabric spray, extended warranty, optional this, optional that, he just went on and on. Finally we got to the finance part. He has 2 plans, a standard plan with 10.5% interest, and an enhance plan with 7.5% interest. It was a no brainer-give me the 7.5% right?

Well, to "qualify" for the lower rate, you had to purchase the extended warranty that was about $950.00. I was trying to do the math in my head and wished I had brought a calculator. I ended up buying the extended warranty, and getting the lower rate. I just wanted out of that room.

Years later, talking about this with a (different) finance guy, he said that the trick is to agree to the extended warranty, get the lower rate, then after 30 days cancel the extended warranty. Within a week you get a check for 99% of the amount you spent on the warranty, but you keep the lower rate.

He also said the most profitable department in a dealership is not service, or parts or sales. You guessed it, IT'S FINANCE. In that little square room with the lights....

[theoldwizard]

I have a friend who loves the challenge !

Shops for cars on rainy Tuesdays, two days before the end of the month (especially if it is the end of a quarter), etc. He goes in knowing what the dealer inventory is (by visiting the lot after closing the week before) and the dealer cost of the cars (online research).

He tells them the price he will pay and has walked out on several negotiations. They call me and ask him to come back.

The best one was a lease several years ago. zero down, no first month payment, no last month payment, no security. He signed and drove off the lot without a penny out of his pocket !

[JimAbbett]

Secure financing in advance from your credit union or your bank. The dealers make money on the rate they finance you at. Often, the dealer will beat your pre-arranged financing deal to make what little they can.

[99Expy]

No offense, but their has to be a special place in hell for F&I guys.

[LastTudor]

I learned my lessons the hard way when I first started buying vehicles. The worst experience was when I bought a new 1996 Ranger SuperCab. I owned it for less than 24 hours, lol.

I had a 92 Ranger at the time, but it was regular cab and cramped. I was itching to replace it so I stopped at the Ford dealer. I drove and agreed to buy the 1996, which I really didn't need and could only marginally afford. They gave me only 3,000 for my 92, and I, being green as grass, agreed to pay sticker for the new one.

While sitting and waiting for the finance guy, after signing papers, I overheard the sales manager take a call. The person on the other end of the line apparently asked about used Rangers. I heard the sales guy say, "We just took in a 92 that's in perfect condition. We haven't even run it through cleanup yet. It's silver with red interior. We're asking $8,500." It hurt to the bone to hear that they were asking more than double what they'd given me for my truck.

I'd bought the 96 on a special financing deal with Ford Credit, 2.9% for 60 months, and drove the truck home. Of course I showed it to my family and friends, which the dealer knew I would. The next day, they called and said, "Sir, we need you to come re-sign some papers." Of course I immediately knew something was up. When I asked why, they informed me that Ford's special rate, the one that I'd signed for, had expired the week before. The rate was going to be 6.9% for 60 months. I'd already stretched my budget at the 2.9% rate, and there was no way I could afford the 6.9%. What really steamed me was that the Finance Department claimed not to know that the 2.9% rate offer had expired. What a crock of bologna!

Long story short, despite much pressure from the sales manager and finance department, I returned the truck to them and we tore up the paperwork. I got my old 92 Ranger truck back. The best part was they'd already run my old truck through the detail shop and it was as clean as new!

From that day forward, I determined that I will never buy a vehicle unless and until I find what I want and under the terms I want. If that means I have to wait 6 months or a year looking for a deal that suits me, that's what I do.

A few years later I told a friend of mine who was an auto wholesaler the story of that 96 Ranger. He told me that Finance Departments do that sort of thing frequently. They'll send you home with a vehicle under a finance contract they know the banks won't approve. They know you'll show all your family and friends. They know most people would be too embarassed to take the vehicle back, and will sign new loan papers under less favorable terms.

Buyer Beware.

[99Expy]

Hey Tudor, great story and I know that made a life lesson for you. I can't tell you how many cars I purchased out of just stupid "wow I gotta have it at no cost mentality".
Don't get me a wrong I am a businessman myself, I have to earn a profit for my company just like every other business. But I am really stretching and pushing to make a 20-25% profit, not 100-500% profit some of these places make. Gotta wonder why these places have all new showrooms and such, because you and I have paid for it.
Virago's still rock!!

[LastTudor]

I have no problem with people making a profit; I just don't want them making it all on me, lol.

Oh, and I agree 100% with you about the Virago.

[GalaxieJeff]

Another tip, never ever let them know you have outside financing until you've agreed on a price and have it in writing and signing. As mentioned this is where they make their money and will "sell" the car at cost (some times less) to make the sale then make the money back on the financing.
A friends mother bought a new Fusion last summer, they made the deal then in comes the finance dude, his mother starts writing out a check for the total. When finance dude sees this he tries his best to convince them to finance, and "save" your money. After a few minutes of the back and forth crap, they got up to leave commenting that it looks like they weren't buying a new car that day.

Also procrastinate...A LOT. They see your sitting on the fence they'll start chipping away a little to bring you on there side of the fence, stay on that fence they'll keep chipping away. Works not only with new and used cars but appliances as well.
Some times (with appliances) there are a lot of extras built into the sticker price like extended warranty or extra attachments, for example I used to sell Electrolux vacuum cleaners, in the price, say $500 we had extra attachments, a years supply of bags and extended warranty. If people just didn't commit we'd drop the price to $450, unbeknown to them we simply removed one of those extras, say the $50 attachments and dropped the price accordingly, or some times we'd "throw in" the attachments for "free".

Some of the dealer add on junk, like under coating or "paint sealer" (wax), or pin stripes, you can get them, if you work it right, to take off. Once you pick out your car and have a price, look over the itemized list and insist you don't want that done, even though they already did it, act like you thought it was done after you checked off the box for them, and keep insisting you didn't want that stuff and wouldn't have asked for it. If they see your pretty adamant about it they will take the cost off. One dealer wanted $75 for rubber floor mats, I told him to take them out I could get the same ones at Wal-mart for $12.99. He scratched it off and noted 'customer doesn't want floor mats'. When I picked up the car they were still there. I started to had them to him through the window before driving off and he just waved his hand to forget about it. Gee you'd think something of that value they'd have been more concerned about it!

[99Expy]

I have matured into a real serious jerk when I go to a car lot. Hee Hee, I pity the fool!!

[LastTudor]

Originally Posted by 99Expy

I have matured into a real serious jerk when I go to a car lot. Hee Hee, I pity the fool!!

I don't blame you. I wouldn't classify myself that strongly, but I don't put up with nonsense. I have no problem telling the salesman when he's wrong. It kills me when a man who makes his living selling cars knows less about the car I'm test driving than I do. That's insane. I can't tell you the times I've schooled salesmen during a test drive.

Another thing that kills me is the sheer lies and bullcrap they often spew. I just don't let it stand. They might be able to pass that off on someone else, but I let them know quickly that I'm no dummy.