Don't say "I'm Paying Cash" at Car Dealerships

[jpd80]

Originally Posted by hayseed

True, But they still take 3 business days to Clear into your account...

Ask Me how I know This...

Fords small fee cheque clearing services can give you access in minutes.

[GO FURTHER]

If you want to buy a new car at the very best price, the best way is to use a car broker, if you don't have a trade-in.

First, find a car you want with all the options, extras, you desire including colour.
Shop it around to find the best deal you can get on your own.

Then engage the car broker to see if they can find a better deal than you have managed to get.

Car brokers deal with many car dealers everyday, have the contacts, and the car dealers will usually give them a better deal than you can get, simply because they give them on-going business, which they don't want to lose.

[raised by monkeys]

Originally Posted by Crazy Dazz

Salary sacrificing only works if you are employed by a PBI, or similar, and they have a partial exemption from FBT. Otherwise it is literally pointless.
Most of the saving available on a car has been taken away.
The packages offered are a con: They purport to offer savings, but the savings are faked. Compare what they want to charge you, to what a simple loan costs (with an equivalent balloon) plus your maintenance etc, and you'll realise just how much they are trying to rip you off.

Yup, social worker for a non-government agency so legit salary sacrifice option.

[KobiXR6T]

Originally Posted by Crazy Dazz

Salary sacrificing only works if you are employed by a PBI, or similar, and they have a partial exemption from FBT. Otherwise it is literally pointless.
Most of the saving available on a car has been taken away.
The packages offered are a con: They purport to offer savings, but the savings are faked. Compare what they want to charge you, to what a simple loan costs (with an equivalent balloon) plus your maintenance etc, and you'll realise just how much they are trying to rip you off.

It's just a numbers game.

In some situations it will be beneficial, in others not so.

But in every case, a lot of the savings are eaten up by fees and interest, with a bit of comission between eachother too.

[MercuryT]

Just buy your cars outright.

No loans and other nonsense.

Simple.

[pwr4ce]

Originally Posted by MercuryT

Just buy your cars outright.

No loans and other nonsense.

Simple.

Hmmm - applying cash against a depreciating asset ??

[MercuryT]

Just pay cash upfront is a much better return overall financially than paying any lease or loan payment on top. (even disgarding fees)

It's not difficult to understand.

[MercuryT]

Originally Posted by pwr4ce

Hmmm - applying cash against a depreciating asset ??

Yeah because loans are so much better on depreciating assets......not

[KobiXR6T]

Originally Posted by MercuryT

Just pay cash upfront is a much better return overall financially than paying any lease or loan payment on top. (even disgarding fees)

It's not difficult to understand.

It's like saying cash trumps credit cards..

The finance option isn't a problem if you have some management skills and the money to afford it. It becomes an issue if you are relying on credit.

But on the opposite side, the longer you hold your cash in your own hands the more it can earn for you, so in some cases the finance repayments can work in your favour. For example, many people pay all their expenses on credit, and simply make sure to pay the full amount when due to avoid any interest or fees.

No 2 situations are the same though, and you need to know the full details up front to work out what is better in the long term.

The beauty of cash is that you can only spend what you have, and when you do you immediately own what it is you have purchased (depreciating or not). Simplicity is often a good thing!

[FTE217]

Originally Posted by pwr4ce

So how many people still pay cash for large purchases like new cars ( talking over 30k ) ?

All comes down to how cashed up you are right.
Timing comes down to it depending what your finances are.
I prefer buying outright IF i can - most times I can.
I loath paying things off thats me/us, DD full amount agreed for the Sprint.
Its out of the way and did the same not long ago on wife's CX5.
As mentioned a depreciating asset that I can't stand with interest etc most times ends up costing more than what the car was in the first place.
I don't get people willing to pay more for a car at X amount and over the term what they have actually paid above it And its worth half in the end.

The wife at times has bought large items for the house on interest free terms and we end up paying the balance long before its due.
Mortgage is the only thing I can say we owe and not for much longer.

Anyway everyone is different.
KobiXR6T - your right its simple, we don't need to keep track on how many debits are getting out of our accounts.
Some people see debt as a good thing, thats yes and no deepending on your circumstances.

[KobiXR6T]

Originally Posted by FTE217

Anyway everyone is different.
KobiXR6T - your right its simple, we don't need to keep track on how many debits are getting out of our accounts.
Some people see debt as a good thing, thats yes and no deepending on your circumstances.

I share the same mind space as you. Every car I've owned I've bought outright. Every toy the same. Never even bothered with any of those buy now pay later schemes, because if for some reason you do forget they end up rheeming you for it.

Now with our mortgage we've had for a couple years, and both cars now over 10 years old it's time for a replacement. Want to keep as much coin as I can against the loan, even though we could afford to take from the offset and pay cash.. so in this instance we are considering a novated lease over a short term with the intent to pay the residual and own the car. Running the figures which includes all running costs, and comparing apples to apples there is only a bee's dick in it. Couple hundred dollars in favour of the lease, but probably also a couple grands benefit keeping the cash against the loan.

But I'm still not 100% sold. Any time an extra party or two are involved it just creates another layer of complexion.

[GO FURTHER]

Originally Posted by FTE217

Some people see debt as a good thing, thats yes and no depending on your circumstances.

Without taking on debt, most common folk (not those born with a silver spoon in their mouth), would never accumulate wealth.

If you never take out a loan to buy a house, you might never have an appreciating asset.

But it's not just about going into debt for appreciating assets.

Take Lindsay Fox for example, a business man who backed and believed in himself.

He bought his first humble truck to do his deliveries, and he could have stopped there. But he went on to buy this second truck, third truck and so on.
A huge risk, borrowing money along the way, but signed up more delivery contracts as he grew.

He could have listened to his friends, who said, "Don't take the risk, be happy with what you have got now!"

But he forged on, borrowing more money.

The rest is history... 5,000 trucks delivering in 10 countries and a personal fortune of over $3 billion.

Going into debt but used wisely can be a good thing.

It's very hard for the average Joe to get wealthy just saving their wages and using only their own cash.

Using other people's money (borrowing from the bank) and making it work for you, can often be the only way to get a head in life.

[ford man xf]

Originally Posted by KobiXR6T

I share the same mind space as you. Every car I've owned I've bought outright. Every toy the same. Never even bothered with any of those buy now pay later schemes, because if for some reason you do forget they end up rheeming you for it.

Now with our mortgage we've had for a couple years, and both cars now over 10 years old it's time for a replacement. Want to keep as much coin as I can against the loan, even though we could afford to take from the offset and pay cash.. so in this instance we are considering a novated lease over a short term with the intent to pay the residual and own the car. Running the figures which includes all running costs, and comparing apples to apples there is only a bee's dick in it. Couple hundred dollars in favour of the lease, but probably also a couple grands benefit keeping the cash against the loan.

But I'm still not 100% sold. Any time an extra party or two are involved it just creates another layer of complexion.

If I was in your shoes I'd definitely leave the money in your offset against the mortgage, with interest rates so low you're keeping the interest ridiculously low and being a fairly new loan (2 years) you'd be paying hardly any principle off the loan I am guessing, the way the banks setup interest vs. principle in the first few years of the loan.

[Poetic Justice]

Originally Posted by GO FURTHER

If you want to buy a new car at the very best price, the best way is to use a car broker, if you don't have a trade-in.

First, find a car you want with all the options, extras, you desire including colour.
Shop it around to find the best deal you can get on your own.

Then engage the car broker to see if they can find a better deal than you have managed to get.

Car brokers deal with many car dealers everyday, have the contacts, and the car dealers will usually give them a better deal than you can get, simply because they give them on-going business, which they don't want to lose.

How does a broker make a living, exactly?

[Tassie f100]

Car brokers would be paid the same as Insurance or mortgage brokers in that they will get a fee from the dealers after the deal is done.Brokers will have a list of dealers that they play off against each other.Dealers probably give the broker their best shot,knowing there won,t be any second chance or negotiation.If you want to spend half a day working on a dealer you would probably get the same deal,but most people have neither the time or patience to try negotiating for hours

[In Focus]

My Mrs tried a broker once, said they couldn't beat the quote she already had after barely a few minutes' negotiating, and she should "go for it."

[GT0132]

Originally Posted by M&Ms

Well if you can score finance at the special rates on offer at times (1.9% or 2.9% comparison rates), you'd be silly to pay for the car upfront! I bought my car with an advertised 1.9% comparison rate, worked out to be 0.7% in my case, interest rate is 0.08% for 3 years. Why wouldn't you!

Agreed. I bought my Mustang with an effective rate of 0.7%. I could have instead withdrawn $55k from my mortgage offset account to pay for it, but my interest rate on my home loan at the time was 4%....so was a no brainer


Cash is only a benefit to those who can keep work off the books and therefore avoid income tax and GST...To others it's a pain in the butt. No business wants the hassle of someone paying for a large purchase with a suitcase full of $20 notes.

[FTE217]

Originally Posted by GO FURTHER

Without taking on debt, most common folk (not those born with a silver spoon in their mouth), would never accumulate wealth.

If you never take out a loan to buy a house, you might never have an appreciating asset.

But it's not just about going into debt for appreciating assets.

Take Lindsay Fox for example, a business man who backed and believed in himself.

He bought his first humble truck to do his deliveries, and he could have stopped there. But he went on to buy this second truck, third truck and so on.
A huge risk, borrowing money along the way, but signed up more delivery contracts as he grew.

He could have listened to his friends, who said, "Don't take the risk, be happy with what you have got now!"

But he forged on, borrowing more money.

The rest is history... 5,000 trucks delivering in 10 countries and a personal fortune of over $3 billion.

Going into debt but used wisely can be a good thing.

It's very hard for the average Joe to get wealthy just saving their wages and using only their own cash.

Using other people's money (borrowing from the bank) and making it work for you, can often be the only way to get a head in life.

Your telling me nothing I don't already know.....
As I said it depends on ones circumstances.
GT0132 gets one way which didn't surprise me :
Cash is only a benefit to those who can keep work off the books and therefore avoid income tax and GST.
The other is IF your fortunate that your business is Cashed up why not cut the chase reducing your overall hit.

[Poetic Justice]

Originally Posted by Tassie f100

Car brokers would be paid the same as Insurance or mortgage brokers in that they will get a fee from the dealers after the deal is done.Brokers will have a list of dealers that they play off against each other.Dealers probably give the broker their best shot,knowing there won,t be any second chance or negotiation.If you want to spend half a day working on a dealer you would probably get the same deal,but most people have neither the time or patience to try negotiating for hours

The reality is that the dealer would normally be factoring any broker fees into the sale price of the car - hence the buyer should be able to do this for themselves or perhaps better.

[Craig@AUDI]

Originally Posted by Poetic Justice

The reality is that the dealer would normally be factoring any broker fees into the sale price of the car - hence the buyer should be able to do this for themselves or perhaps better.

Correct

[IanC]

Originally Posted by Fiji

Negotiate as if your buying two cars, a his and hers and then can one of the cars late in the negotiations.. make the car you want the cheaper of the two and act more interested in the dearer car.. dont negotiate on the dearer car but ask how much extra if I take that too.

Tell them you will finance with them... When the deal is signed change your mind

Don't go telling them any lies. Leave that to them. Be sure to mention that you have a couple of other places to check out before you make up your mind. Just walk out if they don't give you the price you want but leave your card with them so they can phone you if they change their mind.

[GO FURTHER]

Originally Posted by Poetic Justice

The reality is that the dealer would normally be factoring any broker fees into the sale price of the car - hence the buyer should be able to do this for themselves or perhaps better.

This is true, except many consumers are not the best at negotiating the best deal for themselves (while they may think they are).

Using a car broker is no different to how many people use mortgage or insurance brokers to get a good deal for them.

Sure the brokers make a commission added to the sale price, that's how they earn their living... But, if the price they can get you including their fees is still less than what you have been able to negotiate on your own, who cares... You still win.

Car salesmen hate consumers who use brokers, because they can't use their sales tactics and dirty tricks to make more profit on the deal.

And if you are going to pay with finance... Then it is better to arrange your own, because car dealers make a lot of money at the backend on hidden fees like "establishment fees" on the loan.

I had a friend let the dealer arrange a $10,000 loan on a car recently through Westpac bank.
The interest rate was okay, but later he realised he had paid $800 in establishment fees on top of the loan!
And remember the car dealer's "finance manager" is also really acting as a "broker" on behalf of the dealership, getting the kick backs from the finance companies.

[KobiXR6T]

All just basic negotiations.

Seller wants to get the best price for the vehicle, buyer wants to pay least.
A lot depends on the particular vehicle, market, timing. You can do your best at negotiating, but if the seller is confident that he will make more selling to someone else, and the market favours that then you're SOL.

If they have excess stock, and a reason they need to clear it (ie new models about to drop) then often they already show their hand and you'll see how far they will discount while knowing they are still making margins. A good time to negotiate.

As above, certain times during the month, quota, etc they may have incentive to make the sell at lesser margin as well. Having time on your side is a real benefit.

Brokers are just another way of getting quotes (often from multiple sources) without having to do too much foot work. If their quotes are better than what you can negotiate then thats a win. Pays to use whatever you have available.

[pwr4ce]

So what are craig@powerfords tips on this subject ?

[GasoLane]

Originally Posted by pwr4ce

So what are craig@powerfords tips on this subject ?

Buy a car from him with his finance