topic Re: I Can Help, I Run A Car Dealership. in Auto Loans

I can help, I manage a car dealership.

UpNComing — Fri, 08 Jun 2012 00:49:00 GMT

I have close to 17 years experience in the car business and have been running dealership sales departments for close to ten years. Dealerships have earned a very bad reputation for good reason. But keep in mind we're not all bad. I can get pretty busy at times and I may not get right back to you, but I'll answer your questions as quickly as I can :smileywink:

P.S. Keep in mind that many things will vary by your area, especially used car values. I can only make an educated guess based on the current market as a whole. It's best when asking about a used car or your trade value to include your location in your question. Thanks!

Re: I Can Help, I Run A Car Dealership.

pipeguy — Mon, 20 Feb 2012 04:26:42 GMT

UpNComing wrote:
I have been staying on the credit card side of myFICO forums since 2008. I guess I should offer my expertise to anyone that needs it since I've spent the last 16 years in the car business and currently run a sales department of a car dealership

I'd be interested in hearing your comments on this thread: http://ficoforums.myfico.com/t5/Auto-Loans/I-have-financing-lined-up-but-the-dealer-wants-to-run-credit-app/m-p/1229711#M18971

Re: I Can Help, I Run A Car Dealership.

UpNComing — Mon, 20 Feb 2012 04:44:41 GMT

pipeguy wrote:
UpNComing wrote:
I have been staying on the credit card side of myFICO forums since 2008. I guess I should offer my expertise to anyone that needs it since I've spent the last 16 years in the car business and currently run a sales department of a car dealership

I'd be interested in hearing your comments on this thread: http://ficoforums.myfico.com/t5/Auto-Loans/I-have-financing-lined-up-but-the-dealer-wants-to-run-credit-app/m-p/1229711#M18971

Funny you bring that one up. I read through that thread the other day. I'm not sure what state the dealer is in but I would bet they are pressing the legal envelope with that one. Unfortunately dealers have earned the reputation that haunts them. This sounds like a typical highway dealer that preys upon their customers. The fact is your response was correct. The dealer wanted to shop his loan because the dealer will profit from it. Even if the dealer does not make any points on the loan they will receive a flat commission depending on the amount financed from the financing company. I'm sure if the dealer had disclosed the reason for their request he would have welcomed the competition for his loan.

Re: I Can Help, I Run A Car Dealership.

pipeguy — Mon, 20 Feb 2012 05:25:21 GMT

I've purchased at least 40 vehicles, cars and light trucks, all new with the exception of 1 used "certified" GM car last July. What I typically do is show up with pre-approved financing in hand with a letter from my bank or CU showing the loan terms. I want the dealer to make money financing my purchase and that's exactly what I say to the dealer. Beat this financing and you'll get the financing, if you can't beat it I'm still a "good" buyer for the car because financing is not an issue. I'd say 50% of the time the dealer can get the deal bought cheaper, so be it he wins I win.

The deal I made last July, the dealer beat my financing quote by 0.74% (but then he tried to add in Gap Insurance to the tune of $795, gotta love F&I for trying). I keep my keys in my pocket and I don't sign anything until we have a deal. Car dealers can be real b*ll breakers or they can be easy, I don't know why so many think short term sales over long term repeat sales. Easiest car I ever bought was an Acura, I took in a good (low) quote from another dealer (internet email) and I had a preapproved financing offer from PenFed CU. Told the dealer "beat this price and you have a sale, beat the financing and you can have that too". They beat the price by $50 (it was a good quote) but they couldn't beat the financing. We were in and out of that dealer with a new Acura in less than an hour.

No car business has a million plus dollar showroom with 50+ people on staff selling inventory at less than cost, I understand that very well. Just don't BS me so much I know you are lying, that's all I'm saying.

Thanks for getting back to me on that other thread !

Re: I Can Help, I Run A Car Dealership.

spengbab — Mon, 20 Feb 2012 05:31:03 GMT

I've read in a car buying book that when a dealer gets an offer back from banks, that usually they will add a little bit to the APR that was approved. E.g., if a dealer sent apps and got back an APR of 4.7%, they will say that I'm approved for an APR of 5.7% (or any amount higher than the approved APR) ... is that true?

Re: I Can Help, I Run A Car Dealership.

UpNComing — Mon, 20 Feb 2012 15:31:27 GMT

spengbab wrote:
I've read in a car buying book that when a dealer gets an offer back from banks, that usually they will add a little bit to the APR that was approved. E.g., if a dealer sent apps and got back an APR of 4.7%, they will say that I'm approved for an APR of 5.7% (or any amount higher than the approved APR) ... is that true?

Yes it is. Depending on the term of the loan and the lender, the dealer can add as much as 2.5 points to a loan.

Re: I Can Help, I Run A Car Dealership.

webhopper — Mon, 20 Feb 2012 15:48:40 GMT

UpNComing wrote:
spengbab wrote:
I've read in a car buying book that when a dealer gets an offer back from banks, that usually they will add a little bit to the APR that was approved. E.g., if a dealer sent apps and got back an APR of 4.7%, they will say that I'm approved for an APR of 5.7% (or any amount higher than the approved APR) ... is that true?

Yes it is. Depending on the term of the loan and the lender, the dealer can add as much as 2.5 points to a loan.

This seems so shady!!! By the way, do you do sales on new or used vehicles, and which brand do you primarily work with? Also, what do dealerships really think of "Cash" buyers.... if you are buying with cash, wire from bank or something similar.... is it best to keep this information to yourself until after you've haggled the price?

Re: I Can Help, I Run A Car Dealership.

UpNComing — Mon, 20 Feb 2012 16:24:15 GMT

webhopper wrote:

This seems so shady!!! By the way, do you do sales on new or used vehicles, and which brand do you primarily work with? Also, what do dealerships really think of "Cash" buyers.... if you are buying with cash, wire from bank or something similar.... is it best to keep this information to yourself until after you've haggled the price?

Hi webhopper! I am a General Sales Manager for a VW dealership. We sell both new and used.

Although dealers do more than their fair share of shady things, this one is on the up and up. Loans are another profit center for a dealer. They are able to secure financing for less than a customer that walks into a bank for the same loan. This allows the dealer to pass on the financing and still make a profit without any adverse effects on the customer. Again, this practice can be abused by an unscrupulous dealer, but banks in almost all cases only allow 2.5 points at max.

Cash is King is an outdated idea when it comes to buying a car. As I mentioned before dealers make more money when you finance. In most cases the dealer does prefer you finance. Not telling the dealer how you want to purchase your vehicle may hinder them from giving you a correct quote since rebates and incentives change between cash and financing terms. Most manufacturers will offer you special rate financing or cash incentives. Hope this helps :smileyhappy:

Re: I Can Help, I Run A Car Dealership.

Revelate — Mon, 20 Feb 2012 16:30:13 GMT

webhopper wrote:
UpNComing wrote:
spengbab wrote:
I've read in a car buying book that when a dealer gets an offer back from banks, that usually they will add a little bit to the APR that was approved. E.g., if a dealer sent apps and got back an APR of 4.7%, they will say that I'm approved for an APR of 5.7% (or any amount higher than the approved APR) ... is that true?

Yes it is. Depending on the term of the loan and the lender, the dealer can add as much as 2.5 points to a loan.

This seems so shady!!! By the way, do you do sales on new or used vehicles, and which brand do you primarily work with? Also, what do dealerships really think of "Cash" buyers.... if you are buying with cash, wire from bank or something similar.... is it best to keep this information to yourself until after you've haggled the price?

It's no different than a mortgage broker: they get you the mortgage, they get paid by the lender, and the cost somehow or another gets borne by you the consumer.

If I can get a loan from a bank for 20.7% (Roadloans), and in my case the dealer could get a loan for 16.85% and tack on 2.5% (which they may have done in my case) bringing me to 19.35% < 20.7%, why on earth am I going to complain that the dealer took a cut out of it? They got me a better deal, I'm absolutely fine with their making some money off it if I couldn't have gotten that on my own... and I tried in this case. Might've done better with a CU I used to use, but meh, live and learn, they have a shot to refinance me in another 4 months :).

Re: I Can Help, I Run A Car Dealership.

webhopper — Mon, 20 Feb 2012 16:53:38 GMT

Revelate wrote:
webhopper wrote:
UpNComing wrote:
spengbab wrote:
I've read in a car buying book that when a dealer gets an offer back from banks, that usually they will add a little bit to the APR that was approved. E.g., if a dealer sent apps and got back an APR of 4.7%, they will say that I'm approved for an APR of 5.7% (or any amount higher than the approved APR) ... is that true?

Yes it is. Depending on the term of the loan and the lender, the dealer can add as much as 2.5 points to a loan.

This seems so shady!!! By the way, do you do sales on new or used vehicles, and which brand do you primarily work with? Also, what do dealerships really think of "Cash" buyers.... if you are buying with cash, wire from bank or something similar.... is it best to keep this information to yourself until after you've haggled the price?
It's no different than a mortgage broker: they get you the mortgage, they get paid by the lender, and the cost somehow or another gets borne by you the consumer.

If I can get a loan from a bank for 20.7% (Roadloans), and in my case the dealer could get a loan for 16.85% and tack on 2.5% (which they may have done in my case) bringing me to 19.35% < 20.7%, why on earth am I going to complain that the dealer took a cut out of it? They got me a better deal, I'm absolutely fine with their making some money off it if I couldn't have gotten that on my own... and I tried in this case. Might've done better with a CU I used to use, but meh, live and learn, they have a shot to refinance me in another 4 months :).

I just used a mortgage broker, and they got me a 4.375% rate, of which is great!! I had to pay in the discount points, which is their profit, but the $$ I paid in more than pays for itself for that 0.5% reduced rate on a 20 yr 175k loan.... I just hate when Dealerships try to screw the customer! I've experienced this in the past, and now, I'm at the point where I just work with one dealership....

My dealership of choice hooked me up with Credit Union financing which was half of what Ford Motor was offering. I think the problem lies with dealerships who aren't looking at a long term relationship with the customer, they are looking at their short term bottom line more than repeat business.

Re: I Can Help, I Run A Car Dealership.

UpNComing — Mon, 20 Feb 2012 16:55:05 GMT

Revelate wrote:

It's no different than a mortgage broker: they get you the mortgage, they get paid by the lender, and the cost somehow or another gets borne by you the consumer.

If I can get a loan from a bank for 20.7% (Roadloans), and in my case the dealer could get a loan for 16.85% and tack on 2.5% (which they may have done in my case) bringing me to 19.35% < 20.7%, why on earth am I going to complain that the dealer took a cut out of it? They got me a better deal, I'm absolutely fine with their making some money off it if I couldn't have gotten that on my own... and I tried in this case. Might've done better with a CU I used to use, but meh, live and learn, they have a shot to refinance me in another 4 months :).

Bingo!

CapOne is great for refis too Revelate!

Re: I Can Help, I Run A Car Dealership.

UpNComing — Mon, 20 Feb 2012 16:56:27 GMT

webhopper wrote:

I just used a mortgage broker, and they got me a 4.375% rate, of which is great!! I had to pay in the discount points, which is their profit, but the $$ I paid in more than pays for itself for that 0.5% reduced rate on a 20 yr 175k loan.... I just hate when Dealerships try to screw the customer! I've experienced this in the past, and now, I'm at the point where I just work with one dealership....

My dealership of choice hooked me up with Credit Union financing which was half of what Ford Motor was offering. I think the problem lies with dealerships who aren't looking at a long term relationship with the customer, they are looking at their short term bottom line more than repeat business.

Re: I Can Help, I Run A Car Dealership.

currentlywinning — Mon, 20 Feb 2012 17:04:26 GMT

Hello:smileyhappy:

I am wondering what is the best strategy to go about talking down the price on a car? If I wanted say 2k knocked off the price, is that asking too much?

Re: I Can Help, I Run A Car Dealership.

UpNComing — Mon, 20 Feb 2012 17:06:57 GMT

currentlywinning wrote:
Hello:smileyhappy:

I am wondering what is the best strategy to go about talking down the price on a car? If I wanted say 2k knocked off the price, is that asking too much?

Depends. Detials?

Re: I Can Help, I Run A Car Dealership.

currentlywinning — Mon, 20 Feb 2012 17:23:30 GMT

Welp, where do I begin? LOL!

The cars range from 15500-16900. I can put maybe 3500-4500 down although depending on what they offer me as a sales price that will vary.

Is this too aggressive?

Re: I Can Help, I Run A Car Dealership.

UpNComing — Mon, 20 Feb 2012 17:43:58 GMT

currentlywinning wrote:
Welp, where do I begin? LOL!

The cars range from 15500-16900. I can put maybe 3500-4500 down although depending on what they offer me as a sales price that will vary.

Is this too aggressive?

Still need to be more specific. For example, if you are purchasing a used vehicle than 2000 would not be out of question. If you are purchasing a new vehicle the profit margin drops greatly.

Re: I Can Help, I Run A Car Dealership.

currentlywinning — Mon, 20 Feb 2012 17:47:14 GMT

My apologies for being vague...

Yes the cars are all used. Ranging from 2008-2010. One of them is certified used and th others I am looking at are not. Two are Chevy Malibu's (SEXY!) and the other is a Jeep Patriot which is kinda sexy and tough all in one:smileytongue:

Re: I Can Help, I Run A Car Dealership.

webhopper — Mon, 20 Feb 2012 17:53:11 GMT

So basically if I want to pay cash for a car, work with my dealership and let them know up front before they give me a quote. My dealership of choice deals in ford, Lincoln, mercury, and Volvo. My next vehicle will likely be a Volvo or ford small to mid size sedan/ gently used...

Are upscale dealerships more experienced with dealing with cash customers? I'd also be interested in other cars like Mercedes and BMW, and if I decided to go that way, then I can get my salesman of choice to hook me up with a lease return or a 2 yr old trade in or something like that...

In the used arena do most dealerships have the ability to get you what you want if you give them like a 6 month window before you are ready to purchase?

Background: I've used this dealership for service back when I drove a vehicle owned by the company. My salesman of choice is a retired American Airlines worker, he calls me every year on my car's anniversary LOL I've bought both a car and a truck from him over the last 3 yrs and I feel as though I was treated fairly with financing, and they didn't play a lot of the games I had experienced in the past with car shopping.

Re: I Can Help, I Run A Car Dealership.

UpNComing — Mon, 20 Feb 2012 17:56:06 GMT

currentlywinning wrote:
My apologies for being vague...

Yes the cars are all used. Ranging from 2008-2010. One of them is certified used and th others I am looking at are not. Two are Chevy Malibu's (SEXY!) and the other is a Jeep Patriot which is kinda sexy and tough all in one:smileytongue:

Then $2000 isn't overly aggressive at all. But I wouldn't approach it that way. Do your research online to see what the car should be selling for. Edmunds, Cars dot com and other places to see what the fair value of the car is. Look at similar vehicles to see what they are priced at to gauge where you should be. Remember information is your best weapon! :smileywink:

Re: I Can Help, I Run A Car Dealership.

pizzadude — Mon, 20 Feb 2012 18:00:32 GMT

currentlywinning wrote:
Welp, where do I begin? LOL!

The cars range from 15500-16900. I can put maybe 3500-4500 down although depending on what they offer me as a sales price that will vary.

Is this too aggressive?

Maybe, maybe not ~ you should base your price on the value of the vehicle, including its condition and options. The value is negotiable within a certain range ~ use Kelly Blue Book or similar to establish what you feel is a reasonable price and use that as a basis for negotiating.