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Credit Card Issuers Cracking Down On Consumers

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Actually not 2 weeks ago I was walking thristy through the mall and said, dang it, when are these machines going to take credit cards???

This was inevitable. It just better not make the price go up to $2 in normal places because of it!

We also got a new car wash that takes the cards right at the booth. Big difference... don't have to have ones and get 40 quarters or deal with a machine that's likely broken. The other older wash up the street is a ghosttown now.

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Well here's the power of cash...

I just bought a 2006 Eclipse GT, loaded, with 30,100 miles on it (45,000 would be considered normal use) today for $13,995 after thumbing through a stack of hundreds at the car dealer and mumbling about buying a red one at a differnet location. The KBB wholesale value for this vehicle is $18,600. The dealer had previously tried to sell it at auction with a minimum bid of over $20,000; the auction sticker was still in the glovebox.

I realize car dealers are starving for sales because they can't get people financed, so a guaranteed cash sale let me play hard-ball on them.

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Well here's the power of cash...

I just bought a 2006 Eclipse GT, loaded, with 30,100 miles on it (45,000 would be considered normal use) today for $13,995 after thumbing through a stack of hundreds at the car dealer and mumbling about buying a red one at a differnet location. The KBB wholesale value for this vehicle is $18,600. The dealer had previously tried to sell it at auction with a minimum bid of over $20,000; the auction sticker was still in the glovebox.

I realize car dealers are starving for sales because they can't get people financed, so a guaranteed cash sale let me play hard-ball on them.

Good for you..way to hammer that dealership. Now we can be the crooks.:)

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I realize car dealers are starving for sales because they can't get people financed, so a guaranteed cash sale let me play hard-ball on them.

Curious...how long did it take for you from soup-to-nuts to get them to give you the car for that price?

Did they do a whole lot of "talking to the manager"?

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Curious...how long did it take for you from soup-to-nuts to get them to give you the car for that price?

Did they do a whole lot of "talking to the manager"?

About 20 minutes which included inspecting the car. I made one offer and they didn't even counter. One call to their manager that was off-site at a tent sale. The response was "He's not happy but he'll take it."

Honestly I was a bit suprised. I thought for sure they would counter up on it. I think the talking to my father (who I brought along as a supporting actor) about looking at a car at a different dealer and having printouts of other cars in hand helped nudge them on.

Negotiating is a game of chicken, whoever blinks first looses. When you're buying a car you simply have to keep up the appearance that you are not sure about buying it, even if you are excited as hell about the car. You just can't let it show. You have to make it look like you could walk out at any time without making the buy.

Cash helps make the process easier, but there are ways to influence finance situations too...although car financing isn't happening much. The guy at the dealer I bought at yesterday said a woman with an 805 BEACON score (BEACON maxes at 850) couldn't get better than 9% with 10% down on a Chrysler Pacifica. She ended up leaving without the car. This kind of stuff means dealers are hurting for sales in a big way.

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About 20 minutes which included inspecting the car. I made one offer and they didn't even counter. One call to their manager that was off-site at a tent sale. The response was "He's not happy but he'll take it."

Honestly I was a bit suprised. I thought for sure they would counter up on it. I think the talking to my father (who I brought along as a supporting actor) about looking at a car at a different dealer and having printouts of other cars in hand helped nudge them on.

Negotiating is a game of chicken, whoever blinks first looses. When you're buying a car you simply have to keep up the appearance that you are not sure about buying it, even if you are excited as hell about the car. You just can't let it show. You have to make it look like you could walk out at any time without making the buy.

Cash helps make the process easier, but there are ways to influence finance situations too...although car financing isn't happening much. The guy at the dealer I bought at yesterday said a woman with an 805 BEACON score (BEACON maxes at 850) couldn't get better than 9% with 10% down on a Chrysler Pacifica. She ended up leaving without the car. This kind of stuff means dealers are hurting for sales in a big way.

i hate to be the bearer of bad news...

a) i as a dealer would like to tell you that cash is NOT king. i will sell a car for less on a finance deal than a cash deal any day of the week.

B) if you made an offer and they took it means that you offered way too much. i mean you did't even get a "courtesy" bump for a couple hundred bucks. courtesy bumps are used to make you feel like there is nothing left.

c) 20 minute vs 2hr deals. this is fun to me. it goes like this:

20 minute deal = $4,000-$5,000 profit

2 hr deals = $1,000-$1,500 profit

in a nutshell, spend time negotiating car deals. time = money in your pocket. and if you have the cash to pay for, keep it!!! a smart buyer would negotiate a "what price can i get if i financed through your banks?" after almost all other negotiating is exhausted. then pay the loan off with the cash you had initially before your first payment is due.

and that kids is car buying 1018-)

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That sounds like good info! (but I would suspect an early payment penalty :evil:)

99% of all car loans are simple interest with no prepay penalties.

next, if a car salesman is talking he is probably not telling the truth.

a) "its a one owner that old miss smith kept in a garage and wiped down with a diaper everyday"-B*#@SH!t. have the dealer pull a carfax on all used vehicles.

B) "the dealer will make you a better deal on this one"- its an old age unit and the salesman gets a big bonus for switching you to that vehicle.

c)"ill sell it to you for $300 over our invoice"- this only pertains to new vehicles. the truth is that the 'dealer invoice' does not include what is known as holdback. holdback is an additional $800-$2400 profit that is calculated into the invoice price. ie all the friends and family and employee discounts still make money=)

d) DEALERS NEVER EVER LOSE MONEY ON A VEHICLE!!!!!!!! say it with me, DEALERS NEVER EVER LOSE MONEY ON A VEHICLE!!!!!!

guys the fact of the matter is none of you will ever buy a car from me so i dont mind educating you guys. always do your homework. when buying a new or used car ALWAYS go home and pull that EXACT vehicle on edmonds.com. WE HATE EDMONDS!!!! we make less money on educated buyers. not ones that think they are educated but the ones that actually leave the dealership and go home and do their research. odds are in your favor that nobody is coming to buy that car while you do your research.

GL folks

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99% of all car loans are simple interest with no prepay penalties.

next, if a car salesman is talking he is probably not telling the truth.

a) "its a one owner that old miss smith kept in a garage and wiped down with a diaper everyday"-B*#@SH!t. have the dealer pull a carfax on all used vehicles.

B) "the dealer will make you a better deal on this one"- its an old age unit and the salesman gets a big bonus for switching you to that vehicle.

c)"ill sell it to you for $300 over our invoice"- this only pertains to new vehicles. the truth is that the 'dealer invoice' does not include what is known as holdback. holdback is an additional $800-$2400 profit that is calculated into the invoice price. ie all the friends and family and employee discounts still make money=)

d) DEALERS NEVER EVER LOSE MONEY ON A VEHICLE!!!!!!!! say it with me, DEALERS NEVER EVER LOSE MONEY ON A VEHICLE!!!!!!

guys the fact of the matter is none of you will ever buy a car from me so i dont mind educating you guys. always do your homework. when buying a new or used car ALWAYS go home and pull that EXACT vehicle on edmonds.com. WE HATE EDMONDS!!!! we make less money on educated buyers. not ones that think they are educated but the ones that actually leave the dealership and go home and do their research. odds are in your favor that nobody is coming to buy that car while you do your research.

GL folks

Well....

I like Edmunds, Cars.com, even autos.yahoo.com...

My next trick would definitely be getting a list of quotes from all of them, pretending I would buy via financing, wait until he (the "friendly" j-o...errr, I mean car salesman :D ) asks me for my social, then say you know what, I'm going to pay in cash. (no check, no money order...just straight up cash money). If he tried to take back so much as a penny back, I would have the testicular fortitude to walk away. I would even tell him the same thing I told a manager when he spot financed me and telling me I need a co-signer. "Your jedi mindtricks will not work on me, I am not going to get a cosigner and I have no problem walking out." When they see you're serious, they change their tone quick.

If and when my car gets successfully lemon lawed, between the money I get back for the car, and the money I get from my income tax, I should be able to get a decent car (used or new...haven't decided but not one penny will be financed) and have the dealer kiss my behind, instead of the other way around.

BTW, the dealer I bought my car from....I won't be using him again...no "loyalty" here..... :D

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guys most states have what are called usury laws, they limit the dealer from charging more than 2% over buy rate. ie if bank of america gave me a 6% buy rate, i would charge the customer 8% for the loan. now we get into why i will sell for less to a person financing. 2% on a $25,000 loan is about $1,900 in profit for me. it is a numbers game whereas only 30% of the public can actually pay the car off sooner than later and only 30% of those actually do. so if i sell you a car and make 2 points the odds are in my favor that i will make the afor mentioned $1,900.

fico scores DO matter now.

6 months ago i could get a 540 with a few charge offs, bk, and/or a repo bought. naturally it was a 18% interest rate but most 540's with all those baddies NEED a ride regardless of rate. like i always tell customers, "you sir/madame are getting the rate that you EARNED".

6 months ago i could a 680 scored as an "A" tier. which meant a 5-6% rate for 72 months.

fast forward to the present day.:? bank of america's rate sheet has gone up 3% this month. the explanation i got from the BOA rep was to offset future losses. so now if you are an 800 beacon score you will pay 8-9%. oh yeah, back to the 680 bunch. they will no longer finance you:neutral: BOA will not even rehash a deal with me if you are a 699, they have a HARD floor of 700 now. and they are also looking at ALL of the CR's. so even if you are a 780 on EQ, if you are a 699 on EX you are screwed.

tough times ahead for car buyers and dealers.

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and that kids is car buying 1018-)

Dude, my next door neighbor sells classic cars. Since I saved his home from foreclosure, he has told me all the tricks and your story doesn't jibe with what he has told me.

Financing/leasing = more money for the dealer. The dealer sells the contract to the lenders. That BS they pull about getting "approved" is just that BS. They know what their base finance rate is and the dealer gets paid extra to upsell the rate to the consumer. They are not contacting lenders for approval...that is all done by the finance manager himself.

Cost basis. Hardly as you put it. In my case I had my banker check the VIN number in the Manneheim sales database. That revealed what they paid for it at the dealer auction and when they bought it. It also showed that they tried to re-auction the vehicle at a higher price later. My banker also gave me the amount they would consider for financing, but that wasn't useful because it was much higher than what the car had been bought at auction for.

Condition. I ran a CarFax title report against the VIN and an insurance report through my GEICO agent. So it was actually a one-owner as the sales person claimed. Since I did SCCCA race car conversions in my younger days, I know how to inspect bodywork for collision damage. I got up under it with a mirror and ran it through a test drive in the Sheriff's test track down the road.

My 1st offer I gave them factored in $750 profit for them over what they paid at auction. They probably put a hundred or two into some reconditioning for sale leaving about $500 profit for them. I would normally have offered a bit more, but the car had mismatched tires (different brands/tread/ratings front-to-rear) that I will have to spend money to replace. It also needs to have the rotors turned because whoever did the last brake job only replaced the pads without turning the rotors. I told them this bluntly.

I never said they lost money on the sale. I said I got a good deal and didn't get ripped off. I'm a fair negotiator, not someone looking to snooker a dealer. But I do encourage others to use a little brains when buying a car or the dealer surely will rip the consumer off. They use techniques to maximize profit per sale. Consumers must use techniques to maximize savings per sale. Dealers like dumb consumers that pay asking price or shop at "no-haggle pricing" places like CarMax and Saturn. Dealers make a killing operating under those conditions.

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Dude, my next door neighbor sells classic cars. Since I saved his home from foreclosure, he has told me all the tricks and your story doesn't jibe with what he has told me.

Financing/leasing = more money for the dealer. The dealer sells the contract to the lenders. That BS they pull about getting "approved" is just that BS. They know what their base finance rate is and the dealer gets paid extra to upsell the rate to the consumer. They are not contacting lenders for approval...that is all done by the finance manager himself.

Cost basis. Hardly as you put it. In my case I had my banker check the VIN number in the Manneheim sales database. That revealed what they paid for it at the dealer auction and when they bought it. It also showed that they tried to re-auction the vehicle at a higher price later. My banker also gave me the amount they would consider for financing, but that wasn't useful because it was much higher than what the car had been bought at auction for.

Condition. I ran a CarFax title report against the VIN and an insurance report through my GEICO agent. So it was actually a one-owner as the sales person claimed. Since I did SCCCA race car conversions in my younger days, I know how to inspect bodywork for collision damage. I got up under it with a mirror and ran it through a test drive in the Sheriff's test track down the road.

My 1st offer I gave them factored in $750 profit for them over what they paid at auction. They probably put a hundred or two into some reconditioning for sale leaving about $500 profit for them. I would normally have offered a bit more, but the car had mismatched tires (different brands/tread/ratings front-to-rear) that I will have to spend money to replace. It also needs to have the rotors turned because whoever did the last brake job only replaced the pads without turning the rotors. I told them this bluntly.

I never said they lost money on the sale. I said I got a good deal and didn't get ripped off. I'm a fair negotiator, not someone looking to snooker a dealer. But I do encourage others to use a little brains when buying a car or the dealer surely will rip the consumer off. They use techniques to maximize profit per sale. Consumers must use techniques to maximize savings per sale. Dealers like dumb consumers that pay asking price or shop at "no-haggle pricing" places like CarMax and Saturn. Dealers make a killing operating under those conditions.

lmao. dont take it personally buddy. WOW, ruffled some tail feathers meth?

classic cars are in NO way related to a newer auto muchless a mitsu eclipse (watch the value on that one fall like a rock). ALL prime lenders have rules for auto dealers such as newer than 7 yrs old and less than 100,000 miles.

meth, i think you are taking my inside advice as a direct attack on your inability to negotiate a good car deal. not the case kiddo. a good deal is in that six inches between your ears. its all in your mind. if you think you got a good deal then good for you. all i am saying is that there are ways to get a better deal.

but if you know so much more than me thats all on you bud. i just hope that other people that read these boards and would benefit from a little knowledge dont get sidetracked by this. 400 new/usedxshakeitx vehicles we sell a month vs the lone 2006 mitsu eclipse buyer:ROFLMAO2: with a neighbor that sells classic cars.

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lmao. dont take it personally buddy. WOW, ruffled some tail feathers meth?

Nah. I don't get offended that easily, despite my blunt writing style. A few more posts went in before I pushed "post," and much of what I said had already been confirmed.

Actually I expect the 4th gen eclipse to drop in value for a while. Which is why $14k was a good value. I'm not taking the tail-kicking in depreciation of a new car purchase and by buying below wholesale I insulate my purchase a little bit from depreciation on this purchase. Since I bought cash, I will never be "upside down" so from here on out the only value that matters is the "private sale" value that Kelly and Edmunds publish.

The private sale value will probably level off at 55% of orginal cost (about $12,500) sometime next year and hold that general level for one to two years with minor downward movement. That has been the case in the past with the Eclipse (except 3rd gen which was a huge fubar...chick car, not sporty). The 4th gen may end up going up eventually because the plant that makes the Eclipse/Galant in Illinois is turning out to be too costly for Mitsu to keep open in the down economy. 2009 might just be the last year for the Eclipse which will make the 4th gen cars more valuable...they are very popular with the mod crowd...and the V6GT even moreso.

The person selling classic cars has his finger on the pulse of future values in the marketplace. I wouldn't discount that experience so lightly. And really, you sell 15-20 cars a day in this economy with credit so frozen up? I mean you admit yourself you can't get financing on anyone shy of a 700 score through BofA. And reasonable rates only go to those in the 800 club. Either you have a lot of cash buyers, or that number seems more than a bit inflated. :-? Dealers here that I've spoken to admit they are having trouble selling 5 cars a week right now (neighbor is doing just fine because wealthy people "park" their money in classic cars where it is essentially immune to market problems) and those that can get financing are walking because the rates are too high.

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Nah. I don't get offended that easily, despite my blunt writing style. A few more posts went in before I pushed "post," and much of what I said had already been confirmed.

Actually I expect the 4th gen eclipse to drop in value for a while. Which is why $14k was a good value. I'm not taking the tail-kicking in depreciation of a new car purchase and by buying below wholesale I insulate my purchase a little bit from depreciation on this purchase. Since I bought cash, I will never be "upside down" so from here on out the only value that matters is the "private sale" value that Kelly and Edmunds publish.

The private sale value will probably level off at 55% of orginal cost (about $12,500) sometime next year and hold that general level for one to two years with minor downward movement. That has been the case in the past with the Eclipse (except 3rd gen which was a huge fubar...chick car, not sporty). The 4th gen may end up going up eventually because the plant that makes the Eclipse/Galant in Illinois is turning out to be too costly for Mitsu to keep open in the down economy. 2009 might just be the last year for the Eclipse which will make the 4th gen cars more valuable...they are very popular with the mod crowd...and the V6GT even moreso.

The person selling classic cars has his finger on the pulse of future values in the marketplace. I wouldn't discount that experience so lightly. And really, you sell 15-20 cars a day in this economy with credit so frozen up? I mean you admit yourself you can't get financing on anyone shy of a 700 score through BofA. And reasonable rates only go to those in the 800 club. Either you have a lot of cash buyers, or that number seems more than a bit inflated. :-? Dealers here that I've spoken to admit they are having trouble selling 5 cars a week right now and those that can get financing are walking because the rates are too high.

team TOYOTA babyxdancex toyota and honda are absolutely the only two brands that are selling atm. hell, i have a good friend that runs a nissan store and they are hurting due to nissan's recent history of less than stellar mpg. as for my store, 290 lowest month since 2002 and 562 is our record month. granted that is new and used combined. here's where my paycheck comes into play. i make 3-4X the money on used carsas opposed to new. with the current fuel/economic crisis we are seeing as of late i am selling no used (i think we are at 60 and change used for the month). my target retirement age goes up with every passing day:twisted:

not financing is the second best option, no doubt. financing to get the absolute lowest selling price possible and then paying it off before your first payment is due is the #1 way. if you negotiate as if you were financing and then switch to cash we can still kick the deal. but if you walk out the door with a payment and then pay the loan off in its entirety before your first payment we are screwed. and you will have never paid one red cent in financing. same as with a credit card- pay it off within 15 days of purchase.

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but if you walk out the door with a payment and then pay the loan off in its entirety before your first payment we are screwed.

So your finance contracts get voided and you don't get paid your fee by the finance company at all if the consumer pays off before any finance charges accrue? That sux. I wonder if that's justa thing with Toyota consumer credit. The Mitsu and Ford dealers near me don't have any clause like that. They build the contract and then sell it to the finance company outright. They make their money on the contract regardless of what the consumer does after the 3-day recission period is over.

As for your sales number...well...most people are just stupid. If they bothered to do the math they would find that it is cheaper in the long run to keep a gas-guzzler 4x4 than to trade in on a new, financed vehicle. I think when I did the math for a guy that traded in his Nissan Armada that was 3/4 paid off for a new Prius on the basis he was saving money on gas it came to having to keep the Prius for 7 years before he broke even on the gasoline savings. That even excluded depreciation. It was just cost difference in gas, miles per gallon, and purchase price (cost minus trade). Dumb, dumb, dumb.

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99% of all car loans are simple interest with no prepay penalties.

And 100% of all car loans are beyond foolish - financing a depreciating asset, especially a large asset, is financial suicide...car loans are the single biggest impediment to building personal wealth.

If you can't pay cash for it - you can't afford it.

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And 100% of all car loans are beyond foolish - financing a depreciating asset, especially a large asset, is financial suicide...car loans are the single biggest impediment to building personal wealth.

If you can't pay cash for it - you can't afford it.

Actually I disagree slightly. Car leases are the single largest impediment to building personal wealth. Car loans take second place.

With a lease you are financing a vehicle purchase for someone else (the leasing company), paying the taxes and title for them, and you don't even keep the car at the end of the contract because the residual is calculated too high for a buy out to make sense almost all the time.

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Actually I disagree slightly. Car leases are the single largest impediment to building personal wealth. Car loans take second place.

With a lease you are financing a vehicle purchase for someone else (the leasing company), paying the taxes and title for them, and you don't even keep the car at the end of the contract because the residual is calculated too high for a buy out to make sense almost all the time.

You're right - I should have said "financing a car" rather than specifically saying "car loan".

Of course had I done so, I'd have deprived you or an opportunity to correct me. :)

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And 100% of all car loans are beyond foolish - financing a depreciating asset, especially a large asset, is financial suicide...car loans are the single biggest impediment to building personal wealth.

If you can't pay cash for it - you can't afford it.

peronally i couldnt agree more. however the vast majority of US car buyers arent in a position to pay cash for the vehicles the desire. notice i said desire and not need. each person has their own individual reasons for the vehicle they need/desire so i cant say that a "nicer" vehicle isnt always needed. i mean afterall do you want an outside sales rep that works for you driving a P.O.S.?

i can honestly say automobiles have to be the WORST single investment a person can make due the RAPID depreciation of the property being paid for. well, i think mobile homes may be worse but it would be close.

as far as the reputation that car dealers have, it doesnt bother me too much. only the far out there tree huggers:blah: actually mean it when they say they can live with out a car. the rest of us "civilized" folks can complain about prices such as gas/insurance/vehicles all we want but at the end of the day MOST of us HAVE to have transportation.

as far as the sales slumping at the present time. folks that are holding off due the economy will be the ones setting new record sales for me in the near future when all of the dust settles.xbeer2)

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Of course had I done so, I'd have deprived you or an opportunity to correct me. :)

8-)

By the way I said "almost" with a lease. I have to say a rare exception comes along every once in a while. My mom leaced a Mazda-3 about a year and a half ago. After all the papers were signed and sealed, the dealer called back five days later saying they had made a mistake and wanted her to sign all new paperwork. Sorry, no joy. Recission period is long over for both sides. The deal is done and the contract is executed.

They had calculated the monthly lease payment and residual based on 48 months, but wrote 36 months on the contract. No one noticed, not even my mother, until the finance guy realized they took about a $7000 loss on the deal. So my mom pays $5200 over the course of the lease with $3200 of it going to the leasing company/taxes, only $2000 going toward the cost of the car and has a buy out of $10,300 on a car that stickered for $22,500. Oopsie for them. Yes the math looks bad, but there was a trade-in in the mix that they probably made about $4000 off of which helped prevent this from being an over $10k loss for them.

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So your finance contracts get voided and you don't get paid your fee by the finance company at all if the consumer pays off before any finance charges accrue? That sux. I wonder if that's justa thing with Toyota consumer credit. The Mitsu and Ford dealers near me don't have any clause like that. They build the contract and then sell it to the finance company outright. They make their money on the contract regardless of what the consumer does after the 3-day recission period is over.

As for your sales number...well...most people are just stupid. If they bothered to do the math they would find that it is cheaper in the long run to keep a gas-guzzler 4x4 than to trade in on a new, financed vehicle. I think when I did the math for a guy that traded in his Nissan Armada that was 3/4 paid off for a new Prius on the basis he was saving money on gas it came to having to keep the Prius for 7 years before he broke even on the gasoline savings. That even excluded depreciation. It was just cost difference in gas, miles per gallon, and purchase price (cost minus trade). Dumb, dumb, dumb.

financing. i have the loans approved through "dealertrack" before the customers ever go into finance. and no the 0 prepayment penalty is from all my lenders (BOA, Wells, Citi, Crap1, HSBC, etc etc)

Lets talk hybrids........

WORSE THING YOU CAN DO!!!! unless you really do want to live out your days in a treehouse (to each his own. if you really do think tree's have feeling more power to you) lets start with the additional cost of the batteries, roughly $8,000 added to a same make/model sticker price. rated for 100,000 miles. so after 100,000 miles kinda like alternators going out, your batteries will go out. now you are dropping and additional $9,000( dont forget labor costs) to keep your, now 4-7 yr old, ecomobile running. if you put a pencil to it you will find that a HUMMER is more economic when comes to your money. going green means giving up alot of green IMHO.

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peronally i couldnt agree more. however the vast majority of US car buyers arent in a position to pay cash for the vehicles the desire. notice i said desire and not need. each person has their own individual reasons for the vehicle they need/desire so i cant say that a "nicer" vehicle isnt always needed. i mean afterall do you want an outside sales rep that works for you driving a P.O.S.?

My friend, I couldn't care any less if I was driving a Pinto. I can afford to finance a Mercedes E Class such-and-such, but I'm happy driving my GM car (although the way things are going with GM, I am kind of regretting that HARD).

I had a need to drive after I realized that going to my friend's wedding and reception via public transportation and bumming a ride from a bridesmaid's boyfriend...I got into impulse mode and bought a car then and there. This was the beginning of '08. Anyhow, I originally had Drive Financial. So that should tell you right there I got the "F"orget-You rate. I refied about 5 months later to HSBC for a slightly better rate. You are right about one thing though, I am at the rate that I earned...no question about that. I hope to earn a better rate.

I guess my whole point is, after 6 years of walking, bussing it, and getting on a train, I had had enough. The sad thing is about all of that...even though I have the freedom to drive where I please, I don't have to freedom to park where I pleased. I'm waiting for my loveable slumlord to raise rent by so much as a penny for me to give my notice (a penny is all I need for break of contract... :D ) and find a place with adequate parking.

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peronally i couldnt agree more. however the vast majority of US car buyers arent in a position to pay cash for the vehicles the desire. notice i said desire and not need. each person has their own individual reasons for the vehicle they need/desire so i cant say that a "nicer" vehicle isnt always needed. i mean afterall do you want an outside sales rep that works for you driving a P.O.S.?

i can honestly say automobiles have to be the WORST single investment a person can make due the RAPID depreciation of the property being paid for…

Many people in this society today have a real problem distinguishing between a need and a want. People need a place to live; they don’t need to own a home or have a mortgage.

People need transportation (at lest most people do) but they don’t necessarily need a car (used, new, nice or a POS).

People who can’t (or won’t) make the distinction between need and want will usually have all sorts of logical sounding rationalizations for their position but at the end of the day, that’s all they are – rationalizations.

Rationalizations never change facts.

Rationalizations never change numbers.

When it comes to vehicles and financing, it’s almost immaterial whether it’s a need or a want – if they can’t pay cash they can’t afford it…it’s really that simple.

No amount of rationalization will ever support financing a car - it is always a bad financial decision. Some people can pay cash and choose not to do so but for those who can’t pay cash for a car, financing is an even worse financial decision than for the rest of us. Not matter how you slice, if a person is already in a bad financial situation (like not having saved for a major purchase), making that major purchase anyway and financing it will only make their situation worse.

So, if they aren't in a position to pay cash for a car then they need to do the things that will put them in a position to pay cash - financing the purchase will never put them in a better position; it will only let them sink lower into the cesspool of debt.

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No amount of rationalization will ever support financing a car

Heh. I guess i get to 8-) you again.

When it was available (not anymore) 0% "financing" was the exception. Although that's really not financing in the traditional sense, you trade your cash-back rebate for spreading out the payments interest free. As long as you got a good deal on the vehicle in the first place this works out well enough.

That's what i did on the Outlander two years ago. I got the vehicle at a very good price with 0% for 60 months. Despite that, I paid it off early simply because I've come to dislike like the idea of oweing anyone any money at all. So I did it more on principal than anything else ... I could have put that money to work in a good money market fund and earned a grand or two off it for the remaining three years.

You can't get deals like that anymore though. So I guess it's moot. Maybe in four or five years the 0%/60 deals will return, but I wouldn't bet too much on it.

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Even 0% financing doesn't make it a good financial decision (Toyota is currently offering it by the way).

Most vehicles depreciate 60% or more within the first three years; 0% financing will never be enough to offset that kind of loss...0% makes a bad financial decision not quite as bad but it's still bad.

The other consideration, as you implied, is the financial servitude financing places on you...if I loose my job today, I don't have to worry about where my next car payment is coming from or how long I can hide my vehicle before they come to hook it up...0% financing doesn't help if you don't have income or cash in the bank to cover you.

Trust me on this...I make my living from people buying new (and only new) cars but I still know that financing a car, especially a new car, even with a sweetheart deal is still a bad financial move; at least it is if you "have" to finance to get the car (if you have the money in the bank and simply choose not to use it, that's a different situation). :)

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