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For the best deal you need to do this:

Super Contributor

Re: For the best deal you need to do this:

jamie123 wrote:

I quit selling cars shortly after this.


The hours sucked. I did however find out just what capitalism is all about. I didn't really like what I found.

Not to worry since North Korea just agreed to stop making nukes if we would agree to let them open their national car company dealerships in the US.  They are made by the same folks that made their rockets and I hear they look kinda cool going down the highway burst in flames.

01/23/2018: FICO 829 EQ 827 TU 831 EX
Message 11 of 23
Frequent Contributor

Re: For the best deal you need to do this:

OP thanks for sharing your experiences. Was definitely an interesting read.


I am probably the type of person dealers hate. 12 years ago I got my first car back in high school. My mom bought it for 4k not at a dealership but one of those used car corner lots. Had 110,000 miles on it, 8 years old. We immediately took it to our trusted mechanic for some repairs and it was good to go. I drove that truck for 10 years. In those 10 years I took it to the shop a few times to fix an oil leak, replace the thermostat, as well as regular maintenance like oil changes, replace spark plugs, new battery, etc. and of course all that was still far cheaper then ever getting a new car.


I have since moved on and graduated high school and college and have a regular full time job now. I can easily afford a car payment right now but I see it as a straight up waste of several hundred dollars a month. I would still be driving that truck today if not for one reason. My mom 2 years ago got a brand new car and gave me her old one, which has been well taken care of and I continue to take care of it. It is 13 years old and has 65,000 miles on it and runs like a charm. A new car is not even a thought. I will drive my current car until it just doesn't go anymore, and I anticipate that to be a few decades into the future since driving older high mileage cars my whole life I am a bit knowledgeable about regular maintenance and how to keep them going. Who knows I may already be retired from work before I ever buy my first car.


So as a former car salesman being honest now you can say it. You guys hate people like me huh? Smiley Happy

FICO Scores: TU: 768 (Jan 2012), EQ: 755 (Jan 2012 Lender pull)
Message 12 of 23
Valued Contributor

Re: For the best deal you need to do this:



Its not the car salesman that hates you, but the dealership.


Most people involved in auto sales either buy and drive used vehicles or lease new vehicles if the leasing agreement is favorable. We have learned from many of our customers mistakes. The depreciation on a new car is HUGE! The minute you drive your new car off the lot, your car has just depreciated by $5000. Unless you plan on driving a car for 8 to 10 years after you buy it new, the numbers just don't work.


I have personally witnessed so many people's lives ruined by buying more car than they could really afford. The minute they have a setback in life they are in trouble with their auto loan. I mean come on...Who hasn't had some type of setback in their life occasionally? Divorce, medical problem, job loss, death in family etc. You need to be prepaired and not live your life on that knife edge. An auto purchase is a HUGE investment that some people don't put a lot of thought into and it ends up coming back to haunt them.


You are definitely on the right track. There are some really great slightly used cars out there. It just takes a bit of work to find them.


Anybody that has ever sold cars for a living is SO OVER being impressed by the car you drive. We've just seen too many people driving cars that they really can't afford.

Starting Score: EQ 653 6/21/12
Current Score: EQ 767 5/22/18 - EX 763 5/22/18 - TU 782 5/22/18
Message 13 of 23
Established Member

Re: For the best deal you need to do this:

Great info Jamie!  Quick question.  I'm looking at a used M3 that is listed at $39985, 60k miles.  I know a lot goes into pricing, but would it be ridiculous for me to make an initial offer of $35k, and see what they come back with?  Or is that just too low of an offer to make without insulting the salesperson?

Starting scores 2/13/12: TU - 575; EQ - 555; EX 590 (EX was BofA pull)
Current Scores 6/07/12 TU - 713, EQ - 628, EX 663 (All lender pulls)

EQ Fico jumped 48 points in one month by adding BofA secured card (Had no revolving accounts on CR at all at the time)
Message 14 of 23
Valued Contributor

Re: For the best deal you need to do this:



Don't worry about insulting anyone when it comes to spending your hard earned money.


My question to you is how much is the car worth? Just because a dealership hangs that price on the car means nothing. It sounds to me that you are unsure as to how much that car is worth and you are just picking a number out of the air. Don't worry, a lot of people do that. I used to like people that did that when I was a salesman. All I had to do was come up with some bs to put a foundation under my price and they didn't have a leg to stand on.


You need to do some internet research and find out what the car is really worth. It could end up saving you thousands of dollars! If you spent 4 hours researching you will know more about that car than the salesman. GUARANTEED! That is a good position to be in when it comes to negotiations. You will also find out what kind of problems that particular car may have. Hey, they all have them, just hope you find out that it isn't susceptible to some major problem.




I sold Hondas so I will use them for my example.


The sticker price on a new Civic allowed for $800 in dealer profit. Yes, that is it! That is not very much money, so salesmen were allowed only $100 dollars commission when we sold one of those. We were also instructed that we MUST sell them at full sticker price! It really wasn't that hard to do because Civics sold themselves and because all dealerships only had $800 to work with, prices wouldn't vary by much if people were price shopping.


The minimum added profit to any car on our used lot was $3,500. It could be as much as $10,000.


We sold only the best of the cars our customers would trade-in and only Hondas. If someone traded in say a Nissan we would see if the Nissan dealership that was part of our auto group wanted it or else it went to an auto auction.


Now, back to your car purchase...


What if the dealer came back with a counter offer of 36K? Great deal you think, so you buy it. But you failed to do your research and didn't find out that M3's have a significant problem with transmission failures at 65K miles.


Not such a great deal now. See what I mean?


Do your research. Find out what it is worth. Before you go to the dealership, set the maximum price you are willing to spend. If they fail to come down to your price get up and walk away. You would be suprised at how many times that "this is our final and lowest price" suddenly gets lowered when a customer is walking away from the deal. As long as you did your research and do come up with a fair price you will have a deal at most reputable dealerships.



Starting Score: EQ 653 6/21/12
Current Score: EQ 767 5/22/18 - EX 763 5/22/18 - TU 782 5/22/18
Message 15 of 23
Senior Contributor

Re: For the best deal you need to do this:

I have decent credit and understand having financing in place means more leverage when it's time to deal. I get that they can't offer a better deal without doing another pull but don't want 6, LOL! Is there a way to limit the number of pulls they do?


Also, does getting a beater to trade in make sense versus cash down?

Starting Score: 675
Current Score: EX 753 FICO, EQ 737FICO, TU 738
Goal Score: 776 FICO

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Message 16 of 23
Valued Contributor

Re: For the best deal you need to do this:

Having a trade-in just confuses the issue. Nothing a car salesman likes more than a bit of confusion!


Beaters don't make a dealer any, or not much money, at least where I worked. We sent them directly to the auto auction and didn't make much if any money on them. We didn't have a car in our used lot for under 10K no matter how much pleading we did with management to stock them. Their reasoning was that if the price was over 10K there was a good chance they could also make money on the financing side of the deal. Cash buyers leave out one-half the profit a dealer has a chance to make.


As far as inquiries go....


If you have multiple pulls within a short period of time for the same purpose (auto loan inquiries) they are considered as 1 pull by FICO. I forget want the time limit is between the first and last inquiry needs to be but it is easily found on the internet.




An example...


An older (60's) woman was purchasing an Accord. She was really worried and nervous about the financing and had mentioned to the salesperson that she had made a late payment a few years ago and she didn't know if her credit would be good enough. We pulled her score and it was 805! The late she was worried about was probably the only late she had her entire life!


She would have qualified for 3.9% financing that Honda was offering at the time. So what did we do being the reputable dealership that we were?


We went outside of Honda (So Honda wouldn't find out.) and found her 4.9% financing THEN WE TACKED ON 3% FOR OURSELVES BRINGING HER INTEREST RATE TO 7.9%! Her salesman then told her, "Well..That late charge really did affect your credit score but we have friends at the banks and were able to get you a 7.9% rate." She was so happy and gratefull! Said she would be a customer for life!


If you don't think that would happen to you, you are kidding yourself!


Please understand that a little homework could save you THOUSANDS of dollars.

Starting Score: EQ 653 6/21/12
Current Score: EQ 767 5/22/18 - EX 763 5/22/18 - TU 782 5/22/18
Message 17 of 23
Senior Contributor

Re: For the best deal you need to do this:

Buyers need to do their homework in advance.


I recall reading a thread here where the dealer wouldn't show someone their score. I pretty much thought the person's auto-enhanced was good enough for a much better deal than they got but said nothing.


Cars are not an impulse buy for me. They're more or less a functional thing I really don't derive joy from, unless it's a Jeep. Jeeps get such poor mileage that it will be years before income hits a level where indulging myself makes sense. Smiley Happy

Starting Score: 675
Current Score: EX 753 FICO, EQ 737FICO, TU 738
Goal Score: 776 FICO

Take the FICO Fitness Challenge
Message 18 of 23

Re: For the best deal you need to do this:

Thanks Jamie, Lots of great information in this thread! I recently let the Volvo dealer handle my financing and they hosed me with 4.9% with a 715 EQ Fico..Should have used a CU.. Think I'll refi with that 1.99% they are offering.

Message 19 of 23
Established Member

Re: For the best deal you need to do this:

Well, now that I read this, I feel ripped-off. Smiley Indifferent


Here's my situation:


I filed for Chapter 7 BK 12/10, DC 3/11. Had an auto loan with Honda Finance @ 9.79% for a 2007 Honda Civic EX. Bought it brand new. Never was late. It was my first car (and my dad co-signed). Fast forward, I filed for BK, didn't reaffirm the car, but never stopped paying it either. It was my way of getting to work!. So after my BK was dc'd, I called Honda Financial to see if they could report my payment history, since I was never late and felt t would give me a boost. They told me that because I didn't reaffirm the car, they could not report anything, blah blah blah. I was mad because I thought that after the BK, it would atleast show a positive tradeline on my credit. Well then I went to the Honda dealership to see what I could do. The salesman and the Finance Manager were trying get me into a new civic. At first, I was ok for it, as long as the deal was right. I only owed about 7000 on my car, and I managed to get them to offer me 9500, so I would have a little bit of positive equity on the car and wouldn't have to put such a big down payment. I told them I wanted to maintain the same car payments($309). He said would try, but based on my recent BK, it would be hard. He came back and told me that in order for the deal to go thru, I had to front an additional 3500, due to my BK, and that the bank was offering an interest rate of 18%!!!!. I walked out of there faster than you can think of!.


Fast forward again, several months down the road (May), I went to the toyota dealership. I told the Finance Manager my situation, and he said he would help me. He told me the same thing AHF told me, that the car would never show payments after my BK, and the best thing to do was to trade in the car and what not. At this point, I was more concerned about the tradeline reporting than the actual deal. Now that I come to think of it, he was just trying to make a deal. He offered me a 2010 Toyota Corolla, with less than 10,000 miles. It was priced at $16,000. He was able to get me the deal, with only $800 down, and even though my payments increased about 60 dollars, I was fine with it. He told me that I just needed to keep the tradeline current for atleast 1 year, and I could trade it in for a new one. I thought that was great! I took the deal, @16%(i know kinda high, but he told me it was because of my BK).


Now, my question is, was I tricked? could I have gotten a better deal?

Starting Score: 529 as of 3/2011
Current Score: 660 EX, 627 EQ, 643 TU( all a/o 12/17/13)
Goal Score: 700 in 2014

Message 20 of 23