So my wife has her eyes on a new car. In particular, she thinks she wants a Kia EV-6 (unsure of trim package).

So I've read a lot online. It seems cash is no longer king since dealerships make their $ on financing, especially while keeping it in house

So the plan is - finance as much as possible, get every rebate possible, in order to get the lowest price. Make sure there are no prepayment penalties. Then pay that rascal off the next week.

Am I missing something? This seems the best path forward. Wife has six figure income on her own and credit score of 800+.

Yes, I know this will piss off the dealership. Should I care?

I did this once on with ford motor credit. Took an 8% rate for a large rebate, paid it off on first payment. Dealer called and gave me this spiel about how they lost their incentive. Don't care. **** all car dealers.

The dealer makes money off of financing and you can get a better deal on the price if you finance, so my usual mode is to write a check for half upfront and then pay off the balance when I get the first statement. Did that with our last 3-4 cars. It may differ by dealer (I'm a Toyota man), but my experience is the opposite where they tell me it's cool to immediately pay off vs get defensive or pissy about that plan

I think it depends on who you talk to. Salesman doesn't care since his cut is based on the sale price. It's finance guys who get the cut from the financing. The finance types are usually sleaze anyway and drag the process out longer than it needs to be anyway.

We usually pay cash for the car and I don't really care what the dealership thinks because I am looking out for my interests not theirs.

Ever have a prepayment penalty? Did you have to negotiate that out when buying?

fc2112 said:

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Ever have a prepayment penalty? Did you have to negotiate that out when buying?

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No, have never had a prepayment penalty and haven't seen any clauses about the potential of one in any paperwork. But again, my dealings have only been Toyota related

fc2112 said:

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Ever have a prepayment penalty? Did you have to negotiate that out when buying?

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Never. I did notice that some dealers around DFW would only accept in house financing as payment. If you threatened to walk they didn't care. I think the market has cooled enough where they they can't push this anymore.

And yes, the Finance guy trying to upsell can be the wild card, but honestly, the last couple I dealt with were refreshingly decent and cut out the BS. Got in and out quick with minimal sales pitch. Literally "here's a bunch of stuff you mostly won't want (passes brochure across), let's talk about the 1-2 you might (extended warranty)". Part of it may be due to the fact that I have "cut the bull****, let's get this done and me outta here" written all over my face as soon as I walk into the office

Teslag said:

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I did this once on with ford motor credit. Took an 8% rate for a large rebate, paid it off on first payment. Dealer called and gave me this spiel about how they lost their incentive. Don't care. **** all car dealers.

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was this with the same money you defrauded the federal gov. with (and us taxpayers) or your own this time?

I've financed a couple of times and the manager asked if I would hold the loan for 3 months both times so they'd get paid. I guess that is a common threshold for the dealers to collect. No prepayment penalty, you are free to do as you wish. I do like to establish good relationships, particularly for recurring large purchases, so I would be comfortable with floating the small finance charge for 3 months if they did me right.

agracer said:

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Teslag said:

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I did this once on with ford motor credit. Took an 8% rate for a large rebate, paid it off on first payment. Dealer called and gave me this spiel about how they lost their incentive. Don't care. **** all car dealers.

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was this with the same money you defrauded the federal gov. with (and us taxpayers) or your own this time?

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Possibly. Now get your ass back to work. These VA checks aren't going to cover themselves.

I'll just say, some trims on that EV-6 are very bad ideas and will crater in value quickly over the next couple of years. Prioritize range.

As far as prepayment penalties, many of them are federally illegal and I would doubt your car loan would have one, but read your paperwork.

Many dealers lose out if you don't hold the loan 90 days. I just put down a large amount then pay most of it off on the first payment. Then about 100 days in, I pay it off.

I always get the number done before discussing payment options. Then I pay cash.
My stepdad was an F&I guy all around Beaumont. He used to love the suckers that he got to deal with. The car dealership makes enough. Take care of yours.

This was how it worked years ago and still does in some instances. But in 2 of my last 3 purchases, I found factoring it into the negotiation absolutely resulted in the lowest price.

Just had some major expenses on our house and both of our cars crapped out in the last 2 weeks. Both 10+ years old and closing in on 170k. Wife really wants a new truck. Dreading stepping into a dealership. Truck prices are outrageous these days

Arrange in advance. Email multiple dealers with what you want, and agree to a price before you ever show up. Just make it clear that the price in the email must be "all in" + TTL. No bull**** additions when you get there, and if that happens, you'll be walking out

I used to be Ian F&I manager at a dealership. People did this all the time. As long as they aren't marking up your rate, they won't lose all that much money. We had quotas to meet with each bank we did business with, but we knew some of those would get refinanced/paid off. Selling cars and meeting manufacturer quotas was more important than the occasional charge back from the bank. My dealership was smart enough not to really count on the bank incentive until after the 3 month mark.

They make the most money off of extras like extended warranties, gap insurance, etc..

Purchasing cars, we like to put a hefty deposit down and finance the rest. We'll carry the note for at least one year before we pay it off. I've heard that it can ding your credit to take out a note and pay it off in less than one year. Not sure how true that is, but that's the rule we follow.

If you can get a Zero percent loan (Toyota had that about 8 years ago), take it. Put the normal car payment into your investment accounts and let that money make you money instead of draining your wealth.

RightWingConspirator said:

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Purchasing cars, we like to put a hefty deposit down and finance the rest. We'll carry the note for at least one year before we pay it off. I've heard that it can ding your credit to take out a note and pay it off in less than one year. Not sure how true that is, but that's the rule we follow.

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Everything will ding your credit. If you don't do anything that 'they' say will ding your credit, you won't ever do anything. Do this, ding. Don't do it, ding. F all that nonsense. Pay all your bills on time, have cash for a big downpayment and your credit will always be just fine. Unless you're a moron, then all bets are off.

DannyDuberstein said:

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And yes, the Finance guy trying to upsell can be the wild card, but honestly, the last couple I dealt with were refreshingly decent and cut out the BS. Got in and out quick with minimal sales pitch. Literally "here's a bunch of stuff you mostly won't want (passes brochure across), let's talk about the 1-2 you might (extended warranty)". Part of it may be due to the fact that I have "cut the bull****, let's get this done and me outta here" written all over my face as soon as I walk into the office

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Nothing quite like the sales guy convincing you that a car is the most reliable car ever, only to be followed up 10 minutes later with the finance guy trying to convince you its a POS that will fall apart so you will buy all the extended warranties.

Good move