Financing Strategy

[Firetiger(MN)]

OK.  The 0%/60month program has got me wild and looking for a truck.  The salesman found the truck I spec'd out, but he wants to deal on the difference between the new truck MSRP and the trade in value of my truck.  I say no way.

 

Sometimes they will deal that way, but then give you an overinflated price on the trade.  This seems to be the other way around and even a little low on the trade.

 

Any suggestions on how to counter this?  My thinking is go for $500 over invoice of the new truck, subtract the trade in value and that's the difference that I owe.   Maybe I'm thinking this through wrong, but he seems way out of line.

[City_Slicker]

Keep in mind to they can sell it to you for less than invoice if they wanted to. They get some sort of holding fee or holdback fee from the factory. This is money that is fronted to them to take care of the vehicle for a certain period of time, which includes washing it and stuff. I think it is like $1,200 on most vehicles. If the truck just hit the lot they pocket the 1,200. I went through all this research before buying my last truck. I had the salesmans combover standing straight up I stressed him out so bad. I dont remember all the ins and outs but spend a few hours on the net looking through how to get the best deal on car sites. Go well equiped, they are gonna rip you off, you just control how much. Make him show you numbers from NADA not the little black book on trade in and retail amounts for your trade. Go online and find out how much the actual invoice is, there are several sites you can visit. I broker deals for all my buddies and families cars!!      

[City_Slicker]

By the way, thats a good looking truck. I couldnt let it go!!

[Firetiger(MN)]

Thanks for the complement.  I do like this truck and it would be hard to let it go, but money talks.  ha.

 

Basically they are telling me the new truck MSRP is $42,926 and my truck is worth $24,626 (they haven't looked at it, this has been dealing over the phone just today).  He faxed me the NADA estimate, and they forgot a few options so they are off about $1225 from my NADA findings on the website.  I realize that trade value is going to be less than private party value, but I don't have time to dicker with selling it privately.  Even trading it, I think they are still way out of line on the difference since he is figuring the diff from MSRP.

 

From KBB, I found the invoice to be $37,500.  He told me that wasn't a legit number because it was way low.  Yeah right. KBB has been pretty darn good and accurate.  I know that number is fine and what I'm working off.

 

Too boot, they are getting this truck through a vehicle locate search.  He told me this truck has been on another dealers lot for 165 days.  That's well over that magical 3 month limit that they say is when dealers want to get rid of the vehicle because they start paying the interest on the vehicle from what I've learned.

 

He faxed me the numbers and options on this truck.  It fits my request to a tee, which makes it hard to pass up...but not at the price he's feeding me.

[RyanbabZ71]

go with a ford like i did  

 

Can you deal with any other dealers in the area?  Im sure they can trade with the dealer that has the truck just like the place you are dealing with now.  

 

I am in kinda the same boat as you right now.  I almost went test driving today but drove past the dealership. I am really thinking hard about a new one but dont wanna go through the buying/modding process again. I think if i got a new one the only big mod i would do is the tires.  Gonna wait until i graduate to see if i get a job (fingers crossed) and see if my dad wants my truck (so i donthave to technically get rid of it. How do you like that one   )

 

Keep us posted

[RyanbabZ71]

just did a price on mine and a new one

 

Trade in = 18,700

Retail = 21,300

(this didnt include any of my accessories)

 

New 2500HD CC 4wd LS with 6.0

 

Invoice = 33,654

MSRP = 38407  

[bassdog]

Tell him you'll buy it for invoice or drive down to the next Chevy dealer and buy it from them. You have the specs on the truck they are getting for you, bring it elsewhere.

 

IMHO, Chevy isn't keeping up with the Jones' on the rebates, F*&D is $4000, Dodge is up to $4500, Chevy is only at $2K with $1K loyalty. 0% really isn't any deal, it is not a REAL 0%. If you read carefully you'll find out they charge $16.00 per thousand borrowed. Take the rebate and go to your credit union or bank and get their financing if it works out cheaper.

 

I was working with a Dodge dealership that will sell me $500 below invoice...

[Shaners]

Retail to Retail

 

      or

 

Wholesale to Invoice

 

 

Don't play his stupid game...

 

 

Remeber the dealer deserves to make some money, but not 3-4K unless you are a little old lady.  A fair deal would be wholesale for your trade and invoice plus no more than a few hundred (300-400) on the new truck.  The dealer will pocket $1200 + from GM on the dealer hold back for a $42K truck.  So he would stand to make $1500 on your deal plus whatever he can get out of your old truck.  (remember that whoever deals on your old truck will also want to cut a deal, so if the dealer marks your old truck up by 3K, he'll probably only see half of that if he is lucky, when he sells it... )

[Wingnut]

Remeber the dealer deserves to make some money, but not 3-4K unless you are a little old lady.  A fair deal would be wholesale for your trade and invoice plus no more than a few hundred (300-400) on the new truck.  The dealer will pocket $1200 + from GM on the dealer hold back for a $42K truck.  So he would stand to make $1500 on your deal plus whatever he can get out of your old truck.  (remember that whoever deals on your old truck will also want to cut a deal, so if the dealer marks your old truck up by 3K, he'll probably only see half of that if he is lucky, when he sells it... )

The dealer would pocket a lot more than that, because he would keep YOUR rebate as well.

 

They never bring that up.

 

Thats why I make the deal, THEN say: "when do I get my rebate check?". They say "we keep it". ....."Nope, you never put that in writing, rebate is CUSTOMER CASH BACK, not straight dealer profit."

 

They always just assume that you are giving them the cash back.

 

One more reason for needing a shower to get clean after even talking to them. Greasy Ba$tards.

 

Just my take on it.

[RyanbabZ71]

wing

 

you either get the 0% for 60 months or the rebate not both

[Firetiger(MN)]

Well the saga continues.

 

Stopped by dealer #2 and #3 after work.  #2 finds the same truck in a vehicle locate that #1 did.  He takes the details of my truck (wasn't driving it at the time) and says he'll have to get back to me tomorrow with some numbers. Fine.  

 

Drive to #3 and they take my truck for a drive.  Give me a fair trade in value (about $500 more than NADA quotes).  They figure the difference and that's it.  He says the ball is in my court and if I wanted to start paperwork he'd need my license.  What?  That's it?  No negotiation?  I told him I wouldn't pay MSRP on the new truck. He counters that he can come down on the MSRP, but the same amount on the trade-in value.  lol.  Fine, they all play a different numbers game and I recognize that.  Then comes up the "those trucks are few and far between and it'd cost us money to got get it, etc" routine.  They've got 3-4 on the lot for cripes sakes!  

 

I tell them that if I walked in there with $26,200 cash, they'd sell me that new truck for a little over invoice.  He agreed.  We have a bingo!  Yet, if I trade the truck in that is equal in that cash value they want $4-5k more over invoice.  I understand they have to sell my old truck, etc (for more than I trade in obviously), but where does this $4-5k go on a trade in?  In their pockets.  He said he can't go any further.  Ball is in my court.  Whatever.

 

I say I won't pay much more than invoice and I got the deer in the headlights look.  I don't know what they think they are getting away with.

 

Am I being unreasonable?

[RyanbabZ71]

Am I being unreasonable?

 

no

 

Give em a few wks then go back bet they will give you that truck.  Hard times are hitting the auto market.

[Shaners]

They'll call if they want to make the deal...

 

Remember it is the beginning of a new month, with a brand new incentive program, so the dealers are waiting for the customer to bite.

 

I don't know what the rebate is on the truck, but the local banks and credit unions are offering less than 5% for 5 and in some cases 6 years.  I don't know if you would be better off taking the rebate, and paying the small interest payments or not...  but I bet it's close enough that you should run the numbers...

 

 

Alright I just ran the numbers...  if the rebate is $3000 and the interest rate is 4.75%, then it's a wash on a $25k loan...  ie. take the rebate and pay the interest = no rebate and 0% for 60 months.  (about $4.00/ month cheaper taking the rebate)

[Wingnut]

wing

 

you either get the 0% for 60 months or the rebate not both

Dirty rats  

 

Missed that, thanks.

[Firetiger(MN)]

Yeah, I'd like to wait them out but I am worried that truck they found will be gone soon.  

 

It's exactly what I was looking for.  The only thing I would change is the camper style mirrors, but other than that it would be what I would order if the time allowed.  I was really surprised to hear they found one like this.  I could go to bench seats and that would expand the vehicle locate results some, but I kinda like the buckets.  Sure wish I could find which dealer has this truck on their lot.

 

I'll see what Dealer #2 says tomorrow.  #1 is calling me back as well, but didn't sound like he was eager to negotiate either.