New Car Deals

[Derek Sutton]

Originally Posted by Sliver

I'd pay triple that interest rate to not drive an Escape.

Well good for you but everyone is working with a different budget.

[you&me]

It's worth keeping in mind that the manufacturers and finance companies don't have some magic pool of capital that allows them to actually loan money out several points under prime... Those rates are bought down by the profit margin in the car... So for instance, if you're getting 1.9% financing, that's ~3% under prime, so on a $40k car on a 5 year term, there's ~$6k that's either built into the price of the car, or not otherwise being discounted.

If possible, it's always better to negotiate the price of the new car first, before broaching the topics of financing or trades... Leaves less room for dealer games.

[Tiger]

I was getting a vehicle (subaru) that was ordered in... talked to multiple dealerships around alberta. Pricing was the highest at 4000 over msrp. And it took several weeks just to negotiate the rate down to msrp and no extra fees.

[PepsiFree]

Originally Posted by Derek Sutton

Well good for you but everyone is working with a different budget.

Nobody can *only* afford a brand new Ford Escape.

[Dion]

Originally Posted by Sliver

I'd pay triple that interest rate to not drive an Escape.

Pay me triple the interest rate and you won't have to drive my Escape.

[blankall]

Originally Posted by you&me

It's worth keeping in mind that the manufacturers and finance companies don't have some magic pool of capital that allows them to actually loan money out several points under prime... Those rates are bought down by the profit margin in the car... So for instance, if you're getting 1.9% financing, that's ~3% under prime, so on a $40k car on a 5 year term, there's ~$6k that's either built into the price of the car, or not otherwise being discounted.

If possible, it's always better to negotiate the price of the new car first, before broaching the topics of financing or trades... Leaves less room for dealer games.

Multiple car companies own their own financing companies. They an afford to lease/finance at below prime, as they aren't necessarily borrowing the money from someone else. The car company doesn't necessarily care about what prim is, just what their overall cash flow is. When prime is higher, they don't need to compete with outside finance companies and will raise their own rates to increase profits.

[Bill Bumface]

1. Buy something reliable enough, but as cheap as you can possibly stomach for a few years.
2. Make your "car payment" to yourself in an investment account during this period
3. When you've saved enough, buy the car you actually want for cash.
4. Keep making the "car payments" to yourself, and repeat.
5. Never let the parasites trying to squeeze your money out of your wallet via auto financing get another cent from you.

[Jacks]

Originally Posted by surferguy

https://www.kijiji.ca/v-cars-trucks/...carry/m6851600

A new paint job isn't fooling me Bubbles.

[you&me]

Originally Posted by blankall

Multiple car companies own their own financing companies. They an afford to lease/finance at below prime, as they aren't necessarily borrowing the money from someone else. The car company doesn't necessarily care about what prim is, just what their overall cash flow is. When prime is higher, they don't need to compete with outside finance companies and will raise their own rates to increase profits.

Actually, a lot of finance companies are completely separate entities from the manufacturers, often not even related; for example GM's finance arm - formerly GMAC - is now Ally, a completely independent, stand alone company with multiple business units, that happens to include auto finance; Chrysler's finance is entirely underwritten by TD.

Rates are never directly subsidized by the finance co. Dealers and manufacturers can buy down the rates (usually through some sort of promotion), but the fact remains that if - for example - you're getting a rate that's 3% below prime, then either the dealer or manufacturer is playing a sort of shell game with profit in the car to buy down the rate; not that the finance company decides to charitably lower their rates for the good of the manufacturer... At least that's what 15+ years at the corporate (not individual dealer) level in the automotive business has taught me.

And this is consistent with something else a lot of people don't realize about the car dealership business - it is very siloed and each department typically operates as its own business under the umbrella of the dealership; new car sales, parts, service, used cars, finance, etc all have their owner P&L and (usually) are each in it to maximize their own P, with little to no care for another department's L. For example:
- The new car department wants to maximize their profit on a new car, even if a discount would help a buyer qualify for financing;
- The finance department wants to maximize their profit, which means maximizing fees and add-ons (and somewhat ironically, maximizing the sale price);
- The used car department wants to buy your trade in for as little as possible (so they can make more money on it), even if giving you a higher offer would help the new car department sell you a new car (and the finance department get another finance deal done);
- When the used car department needs to service your trade-in before it goes on the lot, they have to pay the service department full retail for that service (or occasionally a token discount);
- The service department doing the service on the trade in, has to pay the parts department full retail for the parts needed during the service (or occasionally a token discount).
Etc, etc

Knowing this can help some people understand why the entire dealership experience is so unpleasant and terrible... Not only are you there "competing" to get a good deal, but then every touch point you encounter along the "sales journey" (ewwww) is competing against the others... This model is what makes change and disruption so difficult and the only people that win are the ones that would be in charge of implementing change - the dealers.

[MoneyGuy]

I’d consider trading my RAV4 for a Toyota hybrid. Mine is 2009, 184,000 km. I don’t care about interest rate but am not keen on waiting 18-24 months for delivery. We’re considering it.

[3thirty]

Originally Posted by gasman

Just bought a 23 F150.

11% below MSRP and 3.49%

For a Ford that's not great...

[soreshins]

nm

[soreshins]

To follow up on my earlier posts, I’ve been in touch with Hyundai and there’s a chance they might replace the engine. Will see how it goes.

[Sled]

Originally Posted by 3thirty

For a Ford that's not great...

I didn't create the thread to criticize or joke about what someone navigated towards in making a deal.

Every sale is as different as the buyer, you don't know the situation to give merit if someone got a good deal or not. To many variables to consider

I was more looking for information to help myself and potentially others to get to what they feel was an acceptable deal in a difficult time to make any kind of major financial decision.

Car sales people are professionals and gather information to enhance their position in a negotiation. I was looking for and received some tips in my research that I think is going to help me I hope others did as well.

Thanks for the positive vibes and contributions so far.

[Johnny199r]

I dont own a vehicle. Hearing about the expensive vehicle market (both used and new), I hope I never have to buy one. That extra expense would make me crazy.

[Samonadreau]

Originally Posted by Johnny199r

I dont own a vehicle. Hearing about the expensive vehicle market (both used and new), I hope I never have to buy one. That extra expense would make me crazy.

Checks location.... Uzbekistan?!!

[soreshins]

So Hyundai have finally approved an engine replacement on our 2015 Santa Fe. We have since bought another vehicle so this will now become a decent second car or will be sold on. Very pleased at the outcome!!!

[IGGYRULES]

Originally Posted by soreshins

So Hyundai have finally approved an engine replacement on our 2015 Santa Fe. We have since bought another vehicle so this will now become a decent second car or will be sold on. Very pleased at the outcome!!!

You owe BlindMilwaukee a case or two or twenty of beer.

[IGGYRULES]

Originally Posted by IGGYRULES

You owe BlindMilwaukee a case or two or twenty of beer.

Actually Powder junkie was first. He'll likely share though.

[Blankcanvas]

I 'factory ordered' a new VW January 2022. The car arrived this week but it's now a 2023 model year with $5,000 higher retail price and lease rate has jumped from 1.49% to 9.19%. Dealer would not budge on price or interest rate AND added $3,000 'mandatory' extras that I didn't want and specifically negotiated out of in the original agreement. All in all, the monthly lease payment almost doubled.

I walked away an 'unhappy' customer and got my $1,000 deposit back.