The old saying that "cash is king" applies to almost every purchase, unless you want to buy a car from a dealer.A recent report fromWall Street Journalrevealed how dealers in the market of these seller encourage buyers to get loans, because it is a different way for dealers to make money.
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Car buyers think it is harder to get a "deal" in this market.If you are patient and flexible, you can score a "competitive appointment".But when it comes to actually paying for your new trip, dealers don't really want you to pop up with a check.The would rather get a loan.
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“Car buyers say they hear from dealers that cash and financing outside the dealer are not welcome.Dealers tried to have some of them finance by mentioning or refusing higher prices for cash sales if they could not arrange the financing, according to interviews, according to interviews with buyers. "
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Dealers have always preferred financing versus salary in cash, but they have strengthened the pressure to take out loans and in some cases even rejected a sale if you plan to pay cash.And yes, this is completely legal for a dealer to refuse your money. If you receive a loan from your local bank, credit union or online lender of your choice, you will still be considered a 'cash buyer'.
Regarding the reason why dealers do not really prefer buyers of cash, the answer is clear, they earn money on the loan.Dealers can do this by getting a setback from the lender for registering for a loan, but dealers can also "mark" the rate, they give you, and the bag the difference.For example, let's say that the bank will be approved for five percent April, the dealer can say: "Well, the best we can do is seven percent."If you accept it, they can abandon the two percent difference.
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So what do you have to do to prevent you from being ruined?
It is still wise to receive approval from other lenders in advance before they apply for financing to the dealer.The most decent dealers will compete with the rate you already have and either agree or beat from April.Because the interest rates can vary dramatically if you are not some lenders as a length of 1 -borrower (more than a score of 700 Fico).
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If you end up in a situation where a lower selling price is conditional for financing with the dealer, then know that there are laws against advance payments in most states.So you can take the better price, finance the dealer and immediately pay the loan to use your own funds.The other option is to finance the dealer's loan with another lender into a lower rate.Auto-leen refinancing is generally simple and usually has few or no costs to do this.
Finally, you must always receive a certain price in writing before you close an appointment, and ideally before you even go a foot in the showroom.You want a complete overview of the agreed selling price, taxes and any additional costs.You pay in cash, you know exactly how much there should be on the check.
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Tom McParand is a contributing author of Jalopnik and runs automlchconsulting.com.han gets the problems from buying or leasing a car.Do you have a car purchase question?Send it to tom@utomatchconsulting.com
