Originally Posted by shroomjohn
I was always curious why people say dont payment shop if you know the interest rate and length of financing its not like theyre gonna sneak in another year on the loan or change the rate or anything. I payment shop I just READ before I sign anything so I know exactly what Im getting into. Say I wanted a 450 payment and I knew the financing was 6.99 for 72 mo I'd know Id be paying 26.5k for an ss and Id know Id be very happy!
You dont payment shop because you want to negotiate on the overall price of hte car FIRST. Never talk payment options up front. You want to get the most off the bottom line of the car, once you have done that you can start to talk methods of payment. (Which really pi55es them off b/c they know you out negotiated them)
The reason for this is they tier interest rates, can sometimes play with residual values of the car, and will quote your price THEN roll taxes and fees into it raising payments. Also if you come in with a ballpark payment and it is a little high they will hold you to that and NEVER give you a better price on the car.
Also downpayments and trades come into play. Always negotiate the trade before as well. Get to the out the door price of the vehicle with tax and tags before talking payment. Most buyers are not finance majors and get eatin alive and don't even know it. They got their 450 a month and think it was a steal when they weren't aware that the 1000 rebate that was offered went right into the dealers pocket.
Negotiating a car deal is an art. Never be desperate, always be able to walk away with a calm face. Never go into a dealer so excited (knowing you are going to buy a car) that you give off your tell that you are going to purchase TODAY.
Always negotiate any and all incentives AFTER you start talking about the price of the car. People get trapped in this all the time. There will be a 2500 rebate and what they don't realize is that it is a dealer rebate. So if the car is 30,000 the dealer will tell you it is now 27,500 JUST FOR YOU!!!. NO, that rebate is from the factory and has no bearing on the dealer price. That money will be given back to the dealer by GM. So you START your negotiation at 30,000. Invoice is still king. Shoot for invoice and when you end the negotiation THEN you take off the 2500! Dont let them get your 2500(if you have a trade you want to negotiate the trade seperately with them and do NOT let them say oh we calculated your trade in the monthly payment haha. Negotiate the trade price and get it in writing BEFORE you even take price on the new car that way they can't go back on you there)
Once you get them to their lowest price (hopefully near invoice which you should absolutely know ahead of time with options and all) you then pull out dealer holdback. The dealer gets a loan from the parent to keep those cars on the lot, if they sell them before the holdback runs out then they pocket the rest of that $. Use it to your advantage. Tell them you will split the holdback with them.
Now say you are at 25,500. Add tax and title. Make sure they add no kind of advertising fees, doc fees, dealer fees, pinstriping, etc. Pay ONLY what you tax rate is and say $300 for motor vehicle fees. They will try to kill you here too. So if we were in NJ tax is 7% so the car would be $27,585 after $300 for motor vehicle.
NOW you talk payment methods. There is nowhere for them to hide ANYTHING at this point other then a lease or finance rate. And if you know they are offereing 2.9% to qualified buyers and they are trying to give you 6.99% you know they are screwing you. Let THEM work up the payment amount at that point and if it doesn't fit in your budget then the car is too expensive or you didn't do a good job negotiating. Unless you are reallllllly bad you are always a "qualified buyer" it just gives them another out to try to screw you or the next guy.
I have done this many many times and it takes a good poker face, negotiation skills, and patience. Just remember, there is always room to move for them, always!
Also remember that you want to put as much down as possible on a purchase but ZERO down on a lease. If you are going to own the asset you want to pre pay as much of the value of the asset now so you aren't paying interest on it. On a lease you never want to give them $ up front b/c you could put that in even a bank account and make 3% on your money over the years and help pay each lease payment as they come up with what would have been your capital reduction.
Hope that helps anyone that may be new to this or intimidated!