Did I Get A Bad Deal From The Dealership?

[Ingen]

I had really good credit in 2012, and ordered my car in the color and trim I wanted from Scion at the time. I got 2.9% on 5Y, then got a letter in the mail from Toyota telling me it was actually going to be 2.4%. I did not complain. She's all mine now!

[extrashaky]

Originally Posted by StraightOuttaCanadaEh

I actually discussed this with my financial advisor, and I'm not sure if this just pertains to Canada, but he said in general the lowest rate you'll get is at the dealer.

That is definitely not the case in the US. Occasionally an auto manufacturer will need to clear out inventory and will run a good financing deal for a short time, but the general rule is that the dealership will not give you the best rate.

Furthermore, even if you get a good rate, most people will end up paying more anyway. If all you have to negotiate is the price of the car, you'll usually get a better price. If you have the price of the car, the financing terms and your trade value all on the table, the salesman will use those items as a shell game to redirect your attention whenever he proposes something you don't like.

You say the price is too high? But it's only $300 per month, and you can afford that. Interest rate too high? Let's set that aside for a moment and talk about your trade. Maybe you really hammer him down on the price, but you'll end up paying 7% and getting half what your trade is worth. Maybe you hammer the rate down to 2%, but you end up paying $1500 more than you would have on the price of the car.

Get your financing in order before you go in and sell your old car on the used car market. You'll get a better deal overall if you take away the dealer's extra shells.

Originally Posted by jubella2

Some people are broke and have no credit. 7% might be a good deal in their position.

Those people more than anyone should be shopping around for the best deal before they set foot in the dealership instead of just saying, "Oh well, my credit sucks, I'll just have to take this 7% even though I still might be able to do better elsewhere."

Originally Posted by mazeroni

David Ramsey would have something to say about this, for sure.

No doubt it would be something stupid. Dave Ramsey is an idiot.

[StraightOuttaCanadaEh]

Originally Posted by extrashaky

the salesman will use those items as a shell game to redirect your attention whenever he proposes something you don't like.

A few posts ago I was saying how doing a deal at a dealership always gives me the feeling of being scammed, and that's the reason right there haha.

[Terruko]

Paid 17k OTD for my 10 Series FRS wih 55k miles with 100k miles extended warranty. I felt like I overpaid until I backed into a stop sign with the dealer's loaner, and they told me not to worry about it 😰

[extrashaky]

Originally Posted by StraightOuttaCanadaEh

A few posts ago I was saying how doing a deal at a dealership always gives me the feeling of being scammed, and that's the reason right there haha.

If a salesman ever gets out a sheet of paper with four squares on it (it's actually called a "four square"), immediately laugh, get up and start walking away. The four square is a misdirection scheme intended to get the most money out of you while making you think the salesman is "moving some numbers" to "get you the best deal." You don't want any part of that, and you should refuse to do any business with him until he puts it away. If he tries to tell you that's the worksheet they have to use, walk away. Don't even give in to the temptation to listen to what he says. Treat it as if he just plopped a dead skunk onto the table.

A really slick salesman can do the four square in his head while talking you into paying more than you should. Getting your financing in place ahead of time makes it a one square, with nowhere to go for misdirection.

[DarkSideFRS]

Originally Posted by jubella2

Some people are broke and have no credit. 7% might be a good deal in their position.

and tht's why people live paycheck to paycheck. Buy a used 15-year-old corolla and build up some savings and credit history first. I was driving the same car that I got from college (99 accord) for 16 years and a 93 corolla as a daily driver before i bought any "nice" cars

i bought a brand new odyssey last year with 1.9% APR and I was bitching cos they were advertising 0.9%... the fine print was that the odyssey was not included in tht offer...

[JoeC]

Originally Posted by DarkSideFRS

and tht's why people live paycheck to paycheck. Buy a used 15-year-old corolla and build up some savings and credit history first.

truth.

I'm not exactly comfortable telling this story but I think it's a valuable financial lesson.

I was gonna pay cash for my BRZ but Subaru was offering 0.9% for 36 months. essentially free money if you have the right credit.

Same thing with my wife's car. intended to pay cash except then Subaru was offering 0.09% on new Oubacks. Less than a 1/10 of a percent. unreal. They ran my credit and offered me the same rate for 48 months. I couldn't believe it. sure I'll give them an extra 12 months of interest at that rate.

I financed both for the entire amount and left my cash in actual investments. So sure, I have a huge monthly payment on the two cars, but in an emergency I still have the original money available to pay them off and it's has grown significantly since then.

It's not because I'm rich... It's because my wife and I drove crummy vehicles for years to be able to start making smart financial decisions.

[InvalidConflict86]

wow this is insane.. I literally picked up a '17 86 yesterday (in canada) for 0% interest/apr for 60 months. I pay for the car and that is it! I feel lucky..

[_sams86_]

The intrest seems really high.
I recieved 0.9%APR for 60 months on a 24k loan with a low credit score, so I guess it depends on the dealer.

[p1l0t]

Enjoy the free money party while it lasts!

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[obscene_gesture]

7% is pretty high to me, but, until recently, I didn't know that people were getting much higher APRs from subprime loans... http://jalopnik.com/how-subprime-car...ing-1796893288

[Bives]

I got a 2017 BRZ in Santa Fe NM with a 2.49% interest rate for 72 month loan through Capital One. I did have a 10K down payment and excellent credit score. I got The BRZ Limited, AT, with STI wheels, Home Link, and windshield shade for $30k even, which was $2,300 below sticker. I think I did okay. I ordered the car to get it the way I wanted, but it took two months to get it. Not sure that helps much compared to what and when you bought.


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[Bives]

...also with wheel locks.


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[HyE]

I'd refinance if I was you. I work in finance, 7% APR on a car note is on the higher side. In today's market, look into something that's 3% or less with a 5 year loan maximum. Since you're 2 years in, 36 months would be ideal. Look into a Credit Union in your area to help you out if you can since they generally have lower rates.

As for 31k for an FRS with aftermarket parts, if it's after taxes and licensing fees that's not too bad of a deal.


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