The Mixed Blessing Of 0% Finance

jthelman · July 7, 2008

Hello all!

I'm in the midst of a financial dance with the local Chevy dealer for a 1500. I didn't realize until we started negotiating, but the 0% financing is becoming a sticking point. Apparently it's either the 0% or the $5k, not both.

It bad enough negotiating the price of the truck, and the trade-in, now it seems he is using the 0% as leverage to keep the price of the truck high. The theory is that I pay "less" factoring in the 0%. I bailed out when he wanted 32K out the door which included tax and tags (32k sticker).

My target is ~24K for an '08 1500 lt1 with the power package, forget the 0%.

Obviously, he's high, but am I being unreasonable at that number?

I'm letting him stew for a day or two, then I'll counter.

Meantime, he has ~12 of these to sell, the '09s on the way, and a consumer looking for small cars/high mpg, not trucks...

Any feedback appreciated!

John

24v · July 7, 2008

I'd say you're close. We just paid $25.5 OTD for an 08 extra cab 1500 with 0%.

jthelman · July 7, 2008

I'd say you're close. We just paid $25.5 OTD for an 08 extra cab 1500 with 0%.

I forgot to mention this was a 4x4, with the Extended cab, so it sounds like we are comparing apples to apples.

$25.5 *with* the 0% sounds like a dream deal, I'd be on that in a heartbeat (no pun intended). I assumed I'd have to bail on the 0% just to get near that number.

I'm really not out to screw the dealer, but it pisses be off when they don't bargain in good faith.

I really appreciate the feedback.

John

24v · July 7, 2008

Mine is 2wd, so that will change it a little.

VMax2007 · July 7, 2008

Do NOT deal from MSRP. Throw that out the window. Start with invoice and work from there. I would offer invoice price WITH either the 0% or the rebates.

I ordered my truck in Jan 2007 and I paid invoice, got $2K in rebates AND got 0% for 36 months.

D&SYukonDenali · July 7, 2008

Your offer does not sound bad for either party. I would guess they will eventually take it since dealers should be getting addional incentives to get 08s off the lots with the 09s coming out.

jthelman · July 7, 2008

Do NOT deal from MSRP. Throw that out the window. Start with invoice and work from there. I would offer invoice price WITH either the 0% or the rebates.

I ordered my truck in Jan 2007 and I paid invoice, got $2K in rebates AND got 0% for 36 months.

We're sorta on the same page. The truck is 30K invoice, 5K of rebates.

I suggested $24K with no 0%, your deal would have been 28K with the 0%.

There's some other factors to consider tho:

1) In January the pucker factor on the oil was just starting, it a mess now. (+ for me)

2) GM now has 5K of rebates instead of 2K (+ for me)

3) January was the middle of the model year, I'm dealing with 08 "leftovers" (+ for me)

Geez, maybe I should counter with 24k and 0%

Somebody correct me, but my dealer isn't paying the rebates or the financing out of his pocket, so if the truck is 30K invoice - 5K rebate, I'm only asking him to eat 1K if I get it at 24K. Seems fair as a starting point. He'll make some of that back in holdbacks. In the meantime, he is losing $$$ because he can't move the guzzlers, and can't park smaller cars in their place.

John

VMax2007 · July 7, 2008

Geez, maybe I should counter with 24k and 0%

Good idea, but don't budge if they counter this offer. Leave them your number and walk out. I bet they will call you within a week, IF they even let you get out the door. They need to move these paperweights.

leepounds · July 7, 2008

I'm probably stating the obvious here, but get a few quotes from a few (somewhat Local) competitors. Competition is what keeps dealerships honest. We have 4 Chevy dealers within 50 miles of my home -- each advertising the "lowest possible price" and announcing that they "will not be undersold". That should be a good place to start.

slimjim2525 · July 7, 2008

Geez, maybe I should counter with 24k and 0%

Good idea, but don't budge if they counter this offer. Leave them your number and walk out. I bet they will call you within a week, IF they even let you get out the door. They need to move these paperweights.

I don't know about the walking out thing. I have never left a deal on the table at any dealer and had them call me back, never. They have never called back, and I bet that I have bought more new vehicles than just about anyone.

jthelman · July 7, 2008

Geez, maybe I should counter with 24k and 0%

Good idea, but don't budge if they counter this offer. Leave them your number and walk out. I bet they will call you within a week, IF they even let you get out the door. They need to move these paperweights.

I don't know about the walking out thing. I have never left a deal on the table at any dealer and had them call me back, never. They have never called back, and I bet that I have bought more new vehicles than just about anyone.

Dude, I almost always bail after a first meeting, and they always call back. It depends on where you leave the deal. I think I have bought 6-7 vehicles this way. YMMV.

To wit: The dealer has called me *twice* since this thread started, and I have ignored the calls. You have to understand they are selling ice to eskimos right now. No one wants a 12 mpg v8 right now.

rckt442 · July 7, 2008

I've bought a total of 5 brand new vehicles from GM (all Chevy's) in the last 15 years. On every single one of them, I started the negotiating point on the invoice price. Find out what all the available rebates are and subtract them from the invoice and that's the starting point. The dealership doesn't lose anything on the rebates, and they still make decent money selling the vehicle at invoice. Given the current state of gas prices and slow truck sales, paying anything more is just throwing your money out the window. I would think that you could probably get a dealer to go even lower than invoice. When I bought my truck last September, it was a leftover 2007 and I got it for quite a bit lower than invoice (minus rebates).

Just my 2 cents

rckt442 · July 7, 2008

One more thing - I've also learned that when you have a trade-in, its best not to reveal it until you have negotiated a price on the vehicle your buying. If you do the trade first, you will never know where they would really be willing to go on the price of the new vehicle, because they are looking at the total profit of the sale and are including how much they are making (or potentially losing) on the trade in. That may be why you can't get the to go any lower.

jthelman · July 7, 2008

One more thing - I've also learned that when you have a trade-in, its best not to reveal it until you have negotiated a price on the vehicle your buying. If you do the trade first, you will never know where they would really be willing to go on the price of the new vehicle, because they are looking at the total profit of the sale and are including how much they are making (or potentially losing) on the trade in. That may be why you can't get the to go any lower.

You are correct; that is the best way. In my case, I wasn't too worried on the price of the trade, so I cut corners. Its a '98 subaru, with 80K miles, and I beat the hell out of it - fair conidition. It's not worth much, so anything I get is sorta a bonus

The price he quoted on the trade in was actually not bad, and within a few hundred of book....

Again, I acknowledge I should have kept the trade under wraps, and normally do so when buying. I will keep the trade in as secret when go to the other dealers I plan to visit tonight.

Side note: Does GM realize how badly it competes with itself? I have 4-5 Chevy and 3 GMC dealers to work with and play off each other. They should probably lose half their dealerships to save some $$$. Ford purged recently because they had too many.

Thanks for the help!

John

jbannick18 · July 7, 2008

Definatley work from invoice, I made the same mistake with the 0 pct thing on the "last" day and could barely get them to budge on the sticker, even called a different dealership. I should of went in there with a bit more research ><. GL on the truck