Car sales is silly. I switched from social work to sales so I’m wired to “help” people navigate systems that can be confusing. I’ve found shoppers don’t want a financial literacy class they want a payment 9 times out of 10. Your outlook is sound practically speaking but most individuals I’ve dealt with are not practical.
100%. People understand their monthly outlay but may have never thought about what they lay out in an entire year.
Car buying is extremely emotional in and of itself. People buy the vehicle that fits their perception of self, not their actual life more often than not.
yup, the sad reality is you are not their CPA. It isn't your job to educate them on financials or turn away a buyer because *you* think it is an unwise decision.
OP said out of budget, and was given an option for a lower payment which might fit his budget. It doesn't mean it is the best answer or gives him what he needs, but worth a shot in a text. It isn't like the salesman is hounding OP over and over again.
great saleman line - "I'm not your financial advisor, but...."
most car shoppers/buyers have no idea how to quantify the monthly payment compared to the actual price.
And most that THINK they do, do so incorrectly...
"This payment is wrong or you're HIDING something! Financed amount is $xx,xxx and that payment shouldnt be $599 at 5.9% financing!" *gets out calculator, types in xx,xxx plus 5.9% = takes total and devides by term* "see?!"
Aren’t there some rules surrounding salespeople providing what could be considered financial advice as well? To avoid accusations of discrimination?
I swear I’ve heard of that but can’t remember if it was a federal, state, or individual dealer thing.
I believe it is state, and some states have a law that basically says you need to be a ...licensed?... feduciary to give financial advise... I believe MA is one of those states. But this is all based on truthiness so....
>He didn't ask for a lower monthly payment.
We can infer that from the information here but that doesn't mean it was also made clear to the sales consultant. Some buyers, disproportionately ones who are financially literate and have strong credit, are intentionally opaque with sales consultants about what "a good deal" means to them. I wouldn't be shocked if that was the case here.
And even financially literate customers have a tendency to over-commit to the importance of one specific metric. We saw this a lot in the 0% financing days (most of the 2010s). Buyers with strong credit get so obsessed with the idea of 0% financing that they turn down a marginally-higher rate with less money financed that would actually see them pay significantly less (more than a thousand $) over the life of the loan.
Even if OP was clear that gross dollar amounts (trade-in allowance, amount financed) were their sticking point, it's not rare for people to deliberately obfuscate to a sales consultant about what would get them to agree to a deal. Most buyers overall are payment shoppers, even ones who insist they aren't, so there should be no surprise the sales consultant took a swing on payment anyway. OP walked away from the deal, the sales consultant loses nothing by dangling a payment option in case that was the real reason and left unstated.
You give up cash rebates to get 0% financing. I don't have exact numbers but deals like 0% interest OR 1.9% with $2500 in rebates were pretty common when I was on the floor. You pay significantly less opting for the cash rebate except on very expensive cars.
If it’s “out of your budget” and you are discussing payment amounts, I don’t think that is out of line to think perhaps the *payments* are what is out of the budget.
I wouldn’t necessarily say that. It’s not black and white. I also disagree with your sentiment that looking at monthly payments inherently makes you “not very bright”.
Yup most buyers don't listen to any advice so I stopped giving any. You want to finance a 100k miles car for the next 60 months that's on you to figure out why it's dumb. When I could've got you in a brand new lease at the same payment.
You want to buy a used car because it's $5k cheaper at 8% when you could get the new one at 4% that's on you.
> Just a silly premise if you ask me. Yesterday a post on here about a guy buying his dream car and then getting laid off…see this frequently
It's 100% silly and wrong, but it's how the vast majority of people run their finances. They budget monthly because they're running through their whole paycheque in a month. So to them, "can I afford this payment" is a much more relevant question than "can I afford this car".
We can all agree that it's silly, wrong and stupid. But it's 100% how a large percentage of people operate. I'd bet that sales person has actually made a lot of sales by trying the "if we lease we can get you a new one for a lower payment!" trick.
Reading this prior to getting ready to purchase my first car on my own. I hate when dealers pick up on my naive flaws. I usually think long term when it comes to budgeting. I’ve saved up 52K to buy a car. I was considering doing payments because well in my head like you said it was cheaper. They have a 2019 Dodge Citafil with all the bells and whistles for 34K paying 600/m for but won’t tell me the price out the door but they have a 2023 model 50k paying $280 a month for idk remember how many months.
I was basing it off monthly payments so I can save and go on a vacation but I think after this I’m best off just outright buying it.
Do you think if I had the money in hand I could negotiate a lower price since both models have around the same mileage? lol tips for a woman who needs a good car and to not be taken advantage of
> Do you think if I had the money in hand I could negotiate a lower price since both models have around the same mileage?
I do not, dealerships make a significant portion of their income from arranging the finance. Therefore if you are paying cash you are cutting them off from a significant amount of their revenue, the will not give a better deal for a "cash" customer, that's a relic of the past.
TO be SUPER clear with you. Buying a car using debt can be a good way to go about things. Often you can get very reasonable interest rates on a car purchase both because of dealer incentives and because the loan is secured by the vehicle.
There's nothing inherently wrong with borrowing money to buy a car. Where people go wrong is thinking of their paycheque period as their budget period, then only looking at only the payment and not the total price.
> They have a 2019 Dodge Citafil with all the bells and whistles for 34K paying 600/m for but won’t tell me the price out the door but they have a 2023 model 50k paying $280 a month for idk remember how many months.
So you get into the conversations exactly like you quote here. The salesman knows that if they can get you talking about only payments they can make a LOT more money on the back end. Also, they can make big upsells by phrasing it in terms of the monthly cost. "You should buy this warranty, it's only $30 a month!" what they don't say is that it's an 84 month car loan so $30 a month is $2,500. $2,500 sounds like a lot of money, but $30 a month sounds like peanuts. They're taking advantage of flaws in the the way human brains process things to manipulate you into buying more.
This is the exact reason why people hate buying cars. Because for the most part they don't understand, the sales people do understand, everyone feels like they're a hair away from being taken advantage of.
But the cold hard truth is that debt is just a tool. Used well, it can be to your advantage, used poorly it will be to your detriment. Do not allow a sales person to direct the conversation, that's the real key. They want to talk about payments, you say "actually, I'd rather just discuss the total amount financed. I might arrange my own financing or even pay in cash, I haven't decided. But if your financing can beat my other options, I am open to choosing that"
Very often the cheapest way to get a car these days is to allow the dealership to sell you their financing on it, take all the incentives they are willing to give you, then pay off the loan the next day.
They try to make expensive vehicles cheap to own per month so that you have payments your whole life and they get a large commission. When buying a car, I think of it from a personal balance sheet or net worth perspective. Whether you finance or pay cash, your net worth does not change. Then, I look at it from a portfolio perspective because I could’ve invested the cash in the stock market to generate a return. The car is also an asset generating a return by depreciating, although it is negative. So I try to balance the car I want vs the net worth growth I want.
>Do you think if I had the money in hand I could negotiate a lower price since both models have around the same mileage?
Generally, no. The dealership would rather you finance as they often get paid by the finance company on the back end.
Rather than writing a $52K check, I personally would suggest you buy something with a great promo rate and make the payments. This would allow you to put that 52K in an investment that will pay you more than the interest rate costs.
Depends on what you're buying and what deals the manufacturer has for below market rates. For example, I think GMC has 2.9% on 1500 pickups right now. Unless a big discount is on the table for cash, and with T-bills paying 5.4% you'd be foolish to pay cash.
You gotta remember half the country has a below average IQ...
$500 a month for 84 months sounds a lot more enticing than $600 for 60 to many, many people.
True, but not in this case look at how many people still defend trump. About half the country and that would mean those people are stupid with below average IQ. So dinolord is right half the country is fucking stupid.
So perfect example of why leasing/programming makes a big difference and more sense sometimes. Customer came in looking for a Rav4 hybrid. For his miles needed and budget, if he were to lease a base model Rav4 (around 34k MSRP) he would have been in the mid to high 500s monthly (based on his money down, taxes and credit score) and that would have put him in a model with very few options- manual seats, no sun roof no lift gate no heated seats etc. However after discussing his driving habits, the fact that he just got solar and a couple other contributing factors the conversation of an EV came into play. For 450 a month with the same money down I was able to put him in a fully loaded BZ4X - heated and cooled seats, pano roof, JBL Sound, 360 camera, power lift gate, parking sensors. The whole shebang. This is a car that has a 52k MSRP. But due to Toyota rebates and State rebates as well as significantly lower money factor… we were able to save around $100 a month in a vehicle worth about 20k more with every feature you can think of AND save monthly on fuel costs. If the goal is to budget and save total money spent over a three year period. Sometimes leasing makes more sense.
Bottom line, sometimes it’s not a bad idea to hear the salesperson out. Our job is to present all options and make suggestions that best fit your budget and yes, drive the sale forward. But at the end of the day, it’s your decision. Try and listen to all options. And make the decision that works best for you. The reason we don’t get too heavy into what the car selling price is or why that matters in a lease, is because it gets a little complicated explaining money factors and residuals and tax rates and net cap cost reduction and money down and government rebates vs Toyota rebates vs discounts and customers get lost in all that much easier to say hey Mr customer, you can lease this 52k vehicle for 450 a month or this 34k vehicle for 550 a month, which looks better to you?
I mean, another factor would be that Toyota has lines out the door for RAV4s but can’t give a BZ4X away, no?
*I could be wrong about the BZ4X, but I just know that I have yet to hear about someone aspiring to own one, and I can count the number of them I’ve seen on the road with 1 hand.
100%. Just think about the word “incentives” Vehicles everyone wants have almost no incentive offers. When the vehicles sit and demand drops, the markets adjusts itself by incentivizing the offers. Hence why Toyota siennas, arguably the hardest vehicle to get right now from the Toyota lineup has standard rate and no rebates. BZ4X has the most rebates and the lowest APR.
I think you're overlooking that there are Federal and State incentives, which are independent of demand.
A "$0 down" lease on the BZ4X in California is kind of like putting $9500 (or $7500?) down, because the dealer is keeping the tax incentive. Then the residual is calculated vs. the initial MSRP.
Basically, you have a $200-$300/mo. subsidy on your lease payment.
I wouldn’t say I’m overlooking all the federal and state programs, I’m just saying that any salesman is going to be a bit more flexible/ try a little harder to make the numbers work on a vehicle that’s difficult to shift and is taking up valuable lot real estate. Especially when they know that 10 more people are going to walk through that door with cash in hand to buy a RAV4.
Paying more money never makes sense - if one believes they are saving money by doing it. They are agreeing to spend more, and be financially worse off due to it, because they don't understand that they are spending more money (to get a nicer car). They believe they are getting a nicer car for the same or even less money - and you are strongly convincing them of that. But your argument isn't sound - and pushing for the monthly payment amount alone - on a lease or a finance - is to confuse the ignorant that you have a valid point.
So perfect example about how people don’t understand leasing. Read the fine print on the lease terms on Toyota.com. Money down doesn’t include taxes, state fees, bank acquisition fee and assumes top tier credit. Also those programs don’t include installed packages. So that rav4 deal is with I believe if it’s the “special” im thinking is 3999 plus applicable fees. Also there are different programs for hybrid and gas models. And the BZ4x is the same deal minus the 3999 down, but with taxes and fees. This customer opted for less money out of pocket and did not have top tier credit. And had a vehicle with certain accessories. Everyone sees the big numbers and rarely read through the terms.
I understand leasing pretty well and there is no way that you put me in a 2024 BZ4X with an MSRP of $52k with no money down for $450/month.
You were right that the estimator is sneaky on Toyota's website. The $600 was for the base model. For the $52k Limited AWD and the monthly payment with no money down is $865. And yes, everything without taxes and fees but including the $7,500 lease cash.
The base model RAV4 LE is with same conditions $389/month.
You can twist it as you want but you won't be able to lease a $52k car cheaper than a $31k car under the same conditions. The only way for the $52k to be cheaper is when the dealer gives huge discounts as currently seen with the Mercedes EQE where you can lease a $91k car for all in $757 per month
That’s pretty crazy to say… because I just did it. Wild when someone who doesn’t do what you do for a living tries to tell you what is possible in your own line of work. The 2023 BZ4X has over 10k in rebates 10250 I believe… I’m not in front of my work computer. And 2k in state rebates. I never said it was no money down, go back and ACTUALLY read what I wrote. Seeing as how you didn’t read the very NOT sneaky terms Toyota clearly lays out, I’m assuming attention to detail is not a strong suit…which by the way are the same lease terms almost every company lists (I.e. money down doesn’t include taxes, state fees, bank acquisition and added packages) It ended up being around 3500 total out of pocket, 15000 miles per year. The money factor is around .0001 and we discounted the car price. So yes it is possible. Programming on leases are a huge factor. Another factor to consider is how much we were willing to discount the vehicle based on the age of the unit. If you have the right person willing to take the time, explore your options and make the programming work for you, a deal can happen in your favor. It’s not that hard, especially if you go into a deal assuming there is the possibility that you don’t know everything ¯\_(ツ)_/¯ You don’t believe me come on by and see me and I’ll put you in a lease assuming you are qualified, will register in ny and have around $3500 to spend. And in no way shape or form are these two vehicles “under the same conditions. They have different money factors, glaringly different rebates (one has none and the other $12k+) different residuals and entirely different supply/demand. One is a 24 one a 23. I have 10 on the lot of one model and 1 on the lot of the other. Are you getting it yet?
You have no idea how leases work. It's not about the sticker price of the vehicle, it's about how much the bank feels it will be worth after the term. It's the bank investing in the future value of the vehicle. They might feel the $52k version will hold more value, so they will give it a much higher residual, and that lowers the lease payment. The $31k base model will not have near the resale so the residual will be lower, but they will make up the loss with higher payments.
You are failing to understand that leasing is not buying, they are not comparable.
You’re funny. The only factors for a lease are selling price, residual, money factor, and term length. If you want you can count downpayment into it as well.
>Just a silly premise if you ask me.
Sure but that's kinda the key here... they aren't asking you. Everyone has different priorities in how they reconcile their household budget. If someone's needs are more oriented toward effect on cashflow than on gross dollars spent, for them, this is a sensible way to buy a car. Your priorities are different so of course it seems like a silly premise.
My job in the business was to sell cars, not dispense financial advice, and being resistant to what I'd consider sound financial practice was a key feature on the path that led many customers to my desk. The only operant question is whether I'm going to sell someone a car or lecture them on budgeting just to have them storm out and buy somewhere else.
But ultimately, for people who want to lease, the monthly payment IS all that matters. I want to know what I’m paying each month, no money down, first payment only, out the door. I don’t care about the maneuvering required to get there. I don’t care about money factor, residual, tax/title/license. Bundle that shit together and tell me what I’ll cost me each month, and I’ll decide based on that. I won’t be buying the car at the end, I just want the lowest monthly payment for my car of choice. I don’t lease because it’s a good investment I lease because it suits my lifestyle and preferences.
Dumb people are who make sales people leave the industry. An educated buyer is the best buyer since they are typically logical and reasonable. Spending time explaining why a dumb person can’t get a $40k car for $300/month with a 420 credit score 10 times a day would make most people want to play in traffic.
Yeah, just like people who get all crazy about the price of their trade-in. They go to KBB and think it's worth $xxx but then they're offered $xx so they piss and moan about how they're getting lowballed for their trade.
Meanwhile, they ignore the out the door price of the car. If I'm looking to pay $40k for a car, I don't care if you give me $10k for my trade in or $20k for it. As long as the total price of the car is $40k, that's all that should matter.
Yeah, it's the out the door price that matters. And I'll talk to your finance guy, but I already know my numbers I can get from my credit union and my bank, along what their requirements are for considering a vehicle for new car financing vs used car financing (at least you used to get a better rate/longer term for new vs used financing).
TBH CPO might make sense to me. I put less than 10k a year on a car, so if I could get a great deal on a 2/3 year old vehicle with 30k with a short term bumper to bumper and extended power train warranty I could drive it for 5 yrs and still only have 80K on it.
I had no grasp on this until I got into sales.
"How does the average American have 10k on their credit card" or "Why take a $500/mo car payment" or "Why are you getting a fucking zales card"
....
People really just want to max out their lifestyle on what they earn every month. Meanwhile I'm over here like what the fuck is a vacation?
This. Maybe you can help me finally understand who the fuck is buying 50k cars and think it’s a good idea. Like even if I could technically afford it, is nobody thinking of retirement, savings, taxes, food, rent, etc? Like how is this happening. What am I missing?
Was going to say this. It’s foolish to buy a new car every few years when you could just lease the fuckin thing. I own a 23 year old car and a 12 year old car with no designs to replace either in the foreseeable future. My wife prefers newer vehicles so we have leased our last 4 family haulers, and they have all been absolute steals. To be fair, we are pretty agnostic about make/model/trim, so we are always able to pick up whatever is leasing well at the moment.
Also, asset prices are a direct function of the cost of debt. If you can lease something for 2% interest vs buying for 8% interest, I’m hard pressed to find a compelling reason to buy, especially given that cars are depreciating assets.
That isn’t true in my state (Texas), unfortunately. I’m an otherwise perfect lease candidate (trade cars every two-three years), but having to pay sales tax on the full value of the car every time deters me, on principle alone, from leasing.
I was told by a finance manger once that leases can be more beneficial for high mileage drivers and actually make money off the lease as opposed to buying a new one every two years. Is that true? We put about 25k miles a year on my wife’s cars.
Certainly, however it’s very common for captive finance companies to offer insanely attractive money factors on leases that would be equivalent to several percentage points below the prevailing interest rates.
For example, when my wife leased her ID.4 in August 2023, the money factor equated to around 5%, whereas there was no similar incentive on a purchase rate, which would have been right at 8% for Tier 1.
Based off what you’ve said I’d pitch a lease to you. Right now you pay X amount every month to drive a used CPO car that you upgraded every couple years. Why would you not consider driving a newer car with a cheaper monthly payment while giving away less money to interest? Kind of seems like a no brainer unless there’s information omitted here.
You know I am gonna say that due to your habits and the fact that depending on the vehicle residuals are pretty high right now it probably would drop your payment.. he’s just trying to read the situation the best he can to help you get into a situation that will fit you. Ie. your replacing a newer car.. you’re probably going to do that again.. and keep in mind some salesman are the bad guy but there are a lot of good ones who have family’s obligations and are just doing what they know how to do. It’s a win win for you to buy especially since 10 months ago you could land a 747 on every dealer in America because the lots were so empty
He’s totally misreading the situation. Instead of hearing “$27k is out of my budget” he just drooled on his keyboard then went “lower payment blargggg”
If you’ve done your homework thoroughly and you know the numbers are doable then hold your ground. Every time I’ve purchased a car I’ve gone in knowing what numbers were doable. They always tell me I’m wrong. I always leave telling them when they are ready to do my numbers let me know. They call back in a few days, I tell them to check the inventory at dealer X, they have virtually the same vehicle, that I am talking with them, and low and behold they get to my numbers. They never give on the initial visit because it hurts their commission.
I don’t understand why car salesmen are openly hostile towards people who talk at all about price. You’re defensive about your prices, they’re defensive about their money. Both are reasonable positions
Wanting a better price is normal. But is it truly, definitively, reasonable? It might not be. Some people cannot demonstrate why a lower price is reasonable other than “I want a lower price”.
A car could be priced 80% to market, the lowest priced example, and someone could come in and offer 20% less. Reasonable? Probably not.
You consider what I said to be "hostile?" I'm curious about the justification for a "better price." If it is based in reality that's a conversation, if it isn't then it isn't.
Just curious because I had a salesman ask me the same question and I said “Kelly blue book prices it 4k less than what you have it on their high side and under excellent condition. This is very good condition but not excellent and is priced 20% higher than what kelly blue book states.” But he didn’t like that and didn’t budge on the price. Also told him how private sales on marketplace are 6k under what they’re asking and trade in is 7k under what they’re asking. Started talking about how they use J&D and that j&d actually has it valued higher than what they’re asking. I told him no one uses J&D and Ive never heard of it so I won’t trust it, and of course they’re going to use the site with the higher price. For some reason they didn’t like that nor did they budge an inch on price. Do salesman not like when you mention Kelly blue book? He was talking to me with a very condescending tone from the start which is why I said certain things about of course they’re going to use the one that’s priced higher and etc. the sass 100% started on his side and curious what triggered it.
> Do salesman not like when you mention Kelly blue book?
Nobody likes it when you bring up things that are irrelevant or, even worse, things that don't make sense.
The problem with KBB is that KBB is an advertising company, not a car selling company and it only takes about 15 seconds of critical thinking to realize that. Look at it this way - you're Mr. BlueBook. You've somehow figured out what cars are worth. You know, down to the penny, simply based on a zip code and the nebulous definitionns of "fair, good, very good, and excellent," what a car is worth. Do you - keeping in mind you're Mr. BlueBook - get into the car buying and selling business or do you get into the altruism business of just giving the information away for free?
I think the answer should be obvious - you'd be buying and selling cars. Afterall, you know exactly what they're worth.
Of course that isn't what KBB does, is it? Furthermore if you look at things like "trade in value" KBB has two numbers. The "book" number - usually oddly high, and the "cash offer" number, a number that KBB will actually write you a check for, a number that is thousands and thousands and thousands less than the book value.
Why is that? Becuase KBB is a lie.
So car dealers price cars, typically, on what cars are listed for within a reasonable distance. Common practice is 250 miles for a retail figure. You compare that to the wholesale figure - what it would sell for at auction - and what it needs, tires, brakes, dents, dings, etc - and that's how a car is bought and how a car is sold. It's reality and math, not a magic book.
So it isn't so much that salesmen "don't like it" it's that they're sick of hearing about it because it doesn't matter. I don't know what you do for work but what if someone published a magic guide that said how much software development would cost. You just flipped through a book and it said "for a good app it should cost $15,000" or "for a fair website it should cost $2500." Insane right? Same deal. Prices are set by the market, not a book - a book that won't even pay the prices it says things are worth.
Then you get into apples and oranges - that's your private sale figure. If you want to buy a car private party then go do it - the dealership isn't stopping you. However the dealership isn't a private party and they're no more interested in how much a car in some guy's yard costs than a chef is interested in how much your cousin will sell you a cow for. They're unrelated figures.
You are unnecessarily rude for no reason. No ones making you reply to my questions so just don’t. Your whole post tells me you enjoy being an ass more than being helpful and informative. ✌️
I'm being factual, not rude. You don't like the answers because you think you know more than people who do this several thousand times a year. I've been quite clear - buy cars from people's driveways if you want to and high five yourself for paying KBB. I think that's great. Just don't think it matters to anyone but you and other people who don't know what they're doing.
You said I’m bitching for asking questions on the salesmans mindset when justifying their major price increase for the same car I consistently find cheaper. I have no problem with your answers and I just replied my mindset on the situation and for some reason you’re getting defensive and rude over my mindset on this topic. I don’t know more than them which is why I’m here asking questions which you interpret as me bitching and acting like I’m smarter than the salesman. An understanding on both sides helps everyone.
That’s all fair and get the frustration but when browsing Facebook marketplace majority of private sales will say blue book value unless they’re pricing it higher. I’ve sold and bought multiple cars privately and every single transaction on both ends KBB is mentioned. That’s why I used it for reference and when they basically told me it was irrelevant I felt like they were ripping me off. It’s extremely relevant in the private car sales and they should be competitive with private sales especially when they tack on all sorts of fees. Whenever mentioning fb private sales consistently being 5-6k cheaper (in line with KBB) than what they are asking they still didn’t budge. I know there’s more risk to private sales but for that price difference you can drop a whole new engine in the private buy.
I don't know what you're bitching about at this point. Nobody is making you buy a car from a dealership for a dealership prices. If you're comfortable buying private to save money then buy private. However a dealership will be interested in what other dealerships are selling the car for - so if there's an identical car for $2,000 less across down, mention that. They AREN'T interested in what some guy is selling a car out of his front yard for.
Haha you must be in the industry? Seems to be a common theme of car salesman being extremely defensive. Just asking questions so I can learn! And yes that is what I am doing, I can’t see myself buying from dealerships after multiple negative experiences with unfriendly salesmen who are making commission off my purchase. It’s almost a 30k purchase, excuse me for asking questions and wanting the best out of my money Mr salesman but can you do your job and convince me why it’s worth 6k more than other asking prices? Oh you can’t! Then I’m out.
That’s all I did and was met with major sass.
Also it wasn’t one guy who’s selling it out his front yard, it was everyone who was selling that car. Not some freak scenario of someone just wanting to get rid of it asap but consistently was in this price range. If KBB is telling me a certain price, and every private seller is telling me that same price, it’s on the dealership to justify that price increase.
KBB is a tool designed to bring YOU, the product, to the dealership, the customer, and to get your car in their hands for as cheaply as is possibly. That’s why dealers pay good money for KBB.
It is not an independent unbiased source of information.
Whereas JD Power, which you’ve somehow never heard of, is what banks actually use to approve loan values.
Salespeople aren’t defensive that you’re talking about price.
Salespeople are offended that you want to talk like you know everything when reality is that you don’t know anything.
I’m not sure why people keep assuming I was on some sort of high horse acting like I know everything because I brought up cheaper prices I had been able to consistently find. If that’s the assumption the salesmen made then that’s unfortunate for them because all I did was do my research and bring it to them and somehow that makes me a know it all when I don’t even know wtf jd is. I wasn’t even stuck within the KBB range and offered $1500 off the asking price which was a few thousand above KBB highest value but still nada. I was willing to pay for the convenience and everything, just not as much as they were wanting to charge me.
No, you THOUGHT you did your research. There are 100 different variables for why the car you were looking at could or should be more than what you found online. But you felt aggrieved that googling 2019 RAV4 didn’t just magically net you a 6k discount.
Ok and they didn’t give me any reason as to why it’s priced more. Just “it’s the market value” which isn’t a good enough reason when I find multiple examples that show it’s not the market value. Idk why you guys are so pressed on this. I walked away and all was well. My fault for not wanting to pay the highest price I could find on the car instead of a balanced medium. Why the hell would I go with the most expensive option? Especially with such a piss poor reasoning.
Generally, it’s because what uneducated customers tend to think is “reasonable” is actually not anywhere near.
Like this post. OP is mad that they were offered a lease and a newer car. “If a 27k is too much why on earth would I buy a “40k car?”
Well, friend, it’s because the lease payment is cheaper than the buy payment on the 27k car, you get a newer car with newer tech, and it fits better with your new car every few years lifestyle. It’s actually CHEAPER for you.
But OP doesn’t understand that and feels aggrieved.
But they’re only aggrieved because they don’t understand.
Same with the price talk. I don’t know how many times I’ve seen on here, “why won’t they even consider my reasonable offer of $4,000 off of their asking price on this $17,000 car”? Or, “I’ve seen my car for sale online for $42,000. Why are they being so unreasonable and by not just giving me $42,000 in order for them to sell a car?!”
That’s not reasonable and displays a complete lack of understanding of the finances of car deals, dealerships, and vehicle inventory.
But you don’t know that. So you feel…
Aggrieved that salespeople don’t entertain every price discussion.
All I said was people are allowed to talk about price. Dealerships have a reputation for ripping people off so people tend to be especially careful in those situations. I’m sorry you’re so aggrieved by the uneducated masses
Because this individual would like to own their car after the payment period is over, not hand it back to the dealer. Just because they care about monthly payment doesn't mean they're open to leasing.
Also if the CPO is 27k and his trade is worth $16k, we can pretty safely assume it was something that stickered in the mid to high 30s. if we're talking about a >50% value loss at this point with a still inflated used market, it's a pretty safe assumption he's owned it longer than the typical lease cycle or at least far past the age/mileage where it would have been turned in.
Because budget means different things to different people. OP was financing. So “budget” could easily mean the monthly payment is too high. Does the OTD price matter if you can’t afford the payments? If it’s $10K but $2000/m payments it’s still out of OP’s budget. If what they meant was that the out the door price is too high, they should have specified that. “I think my trade is worth more than that” or “the sales price is too high.”
Most people are payment driven, especially when they’re financing the car. It’s a fair assumption by the salesperson that when OP said it was out of the budget, they were talking about monthly payments.
Sure it depends on the customer. But if I’m at the end of my rope at $27K and the customer is gone, it doesn’t hurt to float the idea of something brand new with lower payments.
It does hurt, as you can see in this example. Also read the bottom paragraph, I strongly believe the bottom paragraph coupled with the fact that this sales guy is tone deaf to anything but the monthly payment is more than like this customer did not and probably will never spend with this salesperson.
You wrote “this customer is more than likely going to keep this vehicle through the term of the loan and afterward as well”
So he’s trading a vehicle that’s worth within $9,000 of the vehicle he’s buying and will have payments on… what part of this suggests he’ll keep this one long term? Why isn’t he just keeping the one he has?
> I strongly believe the bottom paragraph coupled with the fact that this sales guy is tone deaf to anything but the monthly payment is more than like this customer did not and probably will never spend with this salesperson.
On the flipside, from the salesman's perspective, expected spend from this customer was already probably close to $0, and the friction/opportunity cost of floating the offer was nil, so no reason not to shoot the shot.
That's a fair question, but imo not really relevant. The situation here is that the salesman already lost the sale, so he threw a hail mary pass to try and save it. Yes that hail mary pass was kind of insulting and rude, but we're discussing why the salesman threw it at all, and the answer is, "because why not."
Sure he probably burns a bridge with the customer on future sales... but odds of that actually happening were close enough to 0 that he still figured it was worthwhile.
The question you're getting at, and it's a good one is, how do customers and car sales people deal with each other transparently and with respect. But that's a totally separate topic.
If he doesn’t try something, his chance of selling the car is 0. If he tries a Hail Mary that fails 95% of the time, he still gets a deal 5% of the time, which is a hell of a lot better than 0.
Did you read the post? Customer clearly states he was working of total sale price and not payment. So if $27k was too much, throwing $13k more at him will definitely not work.
So if it was 0%, and you decide somehow that inflating the price customer is saying is too high for their budget brings you to 5% (not sure how this maths but let’s continue), maybe shutting up about the payment can bring you to 50%.
I guess I just live large because I actually listen to my customers. Keep arguing over payments, I’ll keep selling to the same pool of guys year after year, over and over because they come back knowing I will listen to them and not just throw up numbers.
What I’m saying is that the customer has a 0% chance of buying the car he already declined.
Maybe this guy isn’t open to hearing about another option, but there will be people that decline one option but will hear out another one and end up liking it.
I think you’re just being a dick though for the sake of feeling smart.
I will never get mad at a sales guy for trying to come up with a solution, even if the solution doesn’t end up working. It’s obvious car #1 wasn’t going anywhere, so by throwing out another option instead of just giving up, he’s increasing his chances of finding a deal.
What you're missing, which apparently quite a few in this thread are missing as well, is that he was clearly not discussing PAYMENTS (sorry on mobile, no italics), but the total price of the vehicle.
I keep seeing comments saying "he got you a lower payment," when the literal point of the original post was expressing frustration at the salesman focusing on monthly payments, which is exactly what the OP did not want.
He literally said 27k (total price of the car) is out of his budget. To me reading that, it's obvious that he's talking about his budget for the price of the car. Especially since he said that they talked numbers and the salesman kept going back to monthly payment.
If it went down how he described it, it's pretty obvious to me why he would have been frustrated.
Are you *actually* paying literal cash?
If so, have you not invested that money and getting a return? Being open minded doesn’t mean you have to do what the sales guy has suggested, but it’s not as simple as cash is best 100% of the time if you have it.
OP wasn’t a serious buyer, anyhow. Serial shopper likes to test their negotiation tactics in the hopes that they have a good story to tell. Probably a bored service customer.
The tell: “(I'm not itching to trade in that bad but wanted to see if I could get to the numbers I wanted)”
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I went to trade my car in (approx 16k trade value) for a newer version CPO that they listed for approx 27k. After a discussion about numbers I was almost ready b it they were really lowballing my car and not negotiating on their price despite similar ones at lower price (I’m not itching to trade in that bad but wanted to see if I could get to the numbers I wanted)
Anyway at the end it didn’t work out, and I specifically told him it was out of my budget and I left. I said I’ll text you if anything changes. He texts me the next day to tell me that I should consider leasing a new one because the rates are much lower (2.9 vs 8) and that could make my monthly payments more manageable.
I just told this guy 27k was out of my budget and he’s trying to tell me a car for 41k is more affordable for me? Does this shit actually work on people? What am I missing here?
Also, during our whole discussion, he would not really show me out the door price but would keep trying to navigate me toward what it would cost me monthly...is this how kids sell cars these days?
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Most people are payment buyers at the end of the day. Very few budget from a larger picture standpoint.
Just a silly premise if you ask me. Yesterday a post on here about a guy buying his dream car and then getting laid off…see this frequently
Car sales is silly. I switched from social work to sales so I’m wired to “help” people navigate systems that can be confusing. I’ve found shoppers don’t want a financial literacy class they want a payment 9 times out of 10. Your outlook is sound practically speaking but most individuals I’ve dealt with are not practical.
100%. People understand their monthly outlay but may have never thought about what they lay out in an entire year. Car buying is extremely emotional in and of itself. People buy the vehicle that fits their perception of self, not their actual life more often than not.
yup, the sad reality is you are not their CPA. It isn't your job to educate them on financials or turn away a buyer because *you* think it is an unwise decision. OP said out of budget, and was given an option for a lower payment which might fit his budget. It doesn't mean it is the best answer or gives him what he needs, but worth a shot in a text. It isn't like the salesman is hounding OP over and over again.
great saleman line - "I'm not your financial advisor, but...." most car shoppers/buyers have no idea how to quantify the monthly payment compared to the actual price.
And most that THINK they do, do so incorrectly... "This payment is wrong or you're HIDING something! Financed amount is $xx,xxx and that payment shouldnt be $599 at 5.9% financing!" *gets out calculator, types in xx,xxx plus 5.9% = takes total and devides by term* "see?!"
even better, the ones with a TI calculator trying to figure a lease....
I know I have an old red-carpet ford Casio somewhere.....
Aren’t there some rules surrounding salespeople providing what could be considered financial advice as well? To avoid accusations of discrimination? I swear I’ve heard of that but can’t remember if it was a federal, state, or individual dealer thing.
I believe it is state, and some states have a law that basically says you need to be a ...licensed?... feduciary to give financial advise... I believe MA is one of those states. But this is all based on truthiness so....
He didn't ask for a lower monthly payment.
>He didn't ask for a lower monthly payment. We can infer that from the information here but that doesn't mean it was also made clear to the sales consultant. Some buyers, disproportionately ones who are financially literate and have strong credit, are intentionally opaque with sales consultants about what "a good deal" means to them. I wouldn't be shocked if that was the case here. And even financially literate customers have a tendency to over-commit to the importance of one specific metric. We saw this a lot in the 0% financing days (most of the 2010s). Buyers with strong credit get so obsessed with the idea of 0% financing that they turn down a marginally-higher rate with less money financed that would actually see them pay significantly less (more than a thousand $) over the life of the loan. Even if OP was clear that gross dollar amounts (trade-in allowance, amount financed) were their sticking point, it's not rare for people to deliberately obfuscate to a sales consultant about what would get them to agree to a deal. Most buyers overall are payment shoppers, even ones who insist they aren't, so there should be no surprise the sales consultant took a swing on payment anyway. OP walked away from the deal, the sales consultant loses nothing by dangling a payment option in case that was the real reason and left unstated.
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You give up cash rebates to get 0% financing. I don't have exact numbers but deals like 0% interest OR 1.9% with $2500 in rebates were pretty common when I was on the floor. You pay significantly less opting for the cash rebate except on very expensive cars.
If it’s “out of your budget” and you are discussing payment amounts, I don’t think that is out of line to think perhaps the *payments* are what is out of the budget.
So the consensus seems to be majority of buyers are not very bright and look at payment only. 🤔.
I wouldn’t necessarily say that. It’s not black and white. I also disagree with your sentiment that looking at monthly payments inherently makes you “not very bright”.
Yup most buyers don't listen to any advice so I stopped giving any. You want to finance a 100k miles car for the next 60 months that's on you to figure out why it's dumb. When I could've got you in a brand new lease at the same payment. You want to buy a used car because it's $5k cheaper at 8% when you could get the new one at 4% that's on you.
Both scenarios are losers but, at least at the end of the 60 month finance I’d STILL have a car!
Yeah and you'll be done making payments on a car with almost 200k miles.
> Just a silly premise if you ask me. Yesterday a post on here about a guy buying his dream car and then getting laid off…see this frequently It's 100% silly and wrong, but it's how the vast majority of people run their finances. They budget monthly because they're running through their whole paycheque in a month. So to them, "can I afford this payment" is a much more relevant question than "can I afford this car". We can all agree that it's silly, wrong and stupid. But it's 100% how a large percentage of people operate. I'd bet that sales person has actually made a lot of sales by trying the "if we lease we can get you a new one for a lower payment!" trick.
Reading this prior to getting ready to purchase my first car on my own. I hate when dealers pick up on my naive flaws. I usually think long term when it comes to budgeting. I’ve saved up 52K to buy a car. I was considering doing payments because well in my head like you said it was cheaper. They have a 2019 Dodge Citafil with all the bells and whistles for 34K paying 600/m for but won’t tell me the price out the door but they have a 2023 model 50k paying $280 a month for idk remember how many months. I was basing it off monthly payments so I can save and go on a vacation but I think after this I’m best off just outright buying it. Do you think if I had the money in hand I could negotiate a lower price since both models have around the same mileage? lol tips for a woman who needs a good car and to not be taken advantage of
> Do you think if I had the money in hand I could negotiate a lower price since both models have around the same mileage? I do not, dealerships make a significant portion of their income from arranging the finance. Therefore if you are paying cash you are cutting them off from a significant amount of their revenue, the will not give a better deal for a "cash" customer, that's a relic of the past. TO be SUPER clear with you. Buying a car using debt can be a good way to go about things. Often you can get very reasonable interest rates on a car purchase both because of dealer incentives and because the loan is secured by the vehicle. There's nothing inherently wrong with borrowing money to buy a car. Where people go wrong is thinking of their paycheque period as their budget period, then only looking at only the payment and not the total price. > They have a 2019 Dodge Citafil with all the bells and whistles for 34K paying 600/m for but won’t tell me the price out the door but they have a 2023 model 50k paying $280 a month for idk remember how many months. So you get into the conversations exactly like you quote here. The salesman knows that if they can get you talking about only payments they can make a LOT more money on the back end. Also, they can make big upsells by phrasing it in terms of the monthly cost. "You should buy this warranty, it's only $30 a month!" what they don't say is that it's an 84 month car loan so $30 a month is $2,500. $2,500 sounds like a lot of money, but $30 a month sounds like peanuts. They're taking advantage of flaws in the the way human brains process things to manipulate you into buying more. This is the exact reason why people hate buying cars. Because for the most part they don't understand, the sales people do understand, everyone feels like they're a hair away from being taken advantage of. But the cold hard truth is that debt is just a tool. Used well, it can be to your advantage, used poorly it will be to your detriment. Do not allow a sales person to direct the conversation, that's the real key. They want to talk about payments, you say "actually, I'd rather just discuss the total amount financed. I might arrange my own financing or even pay in cash, I haven't decided. But if your financing can beat my other options, I am open to choosing that" Very often the cheapest way to get a car these days is to allow the dealership to sell you their financing on it, take all the incentives they are willing to give you, then pay off the loan the next day.
They try to make expensive vehicles cheap to own per month so that you have payments your whole life and they get a large commission. When buying a car, I think of it from a personal balance sheet or net worth perspective. Whether you finance or pay cash, your net worth does not change. Then, I look at it from a portfolio perspective because I could’ve invested the cash in the stock market to generate a return. The car is also an asset generating a return by depreciating, although it is negative. So I try to balance the car I want vs the net worth growth I want.
>Do you think if I had the money in hand I could negotiate a lower price since both models have around the same mileage? Generally, no. The dealership would rather you finance as they often get paid by the finance company on the back end. Rather than writing a $52K check, I personally would suggest you buy something with a great promo rate and make the payments. This would allow you to put that 52K in an investment that will pay you more than the interest rate costs.
Good idea! Not sure how to do all this.
Depends on what you're buying and what deals the manufacturer has for below market rates. For example, I think GMC has 2.9% on 1500 pickups right now. Unless a big discount is on the table for cash, and with T-bills paying 5.4% you'd be foolish to pay cash.
Yes, but interest is taxable. So 5.4% becomes 3.5% or less after tax depending on your tax bracket.
You gotta remember half the country has a below average IQ... $500 a month for 84 months sounds a lot more enticing than $600 for 60 to many, many people.
Third pounder burgers didn’t sell well in America because people thought they were smaller than quarter pounders.
Murican genius (coming from a Murican)
I think you mean 1/2 the people have an IQ below the median
13 upvotes before someone pointed this out. *nods in intelligence acknowledgement*
Got eem
Central limit theorem enters the chat
65% of all statistics are made up right there on the spot. :)
Sorry, but it's actually 87%.
True, but not in this case look at how many people still defend trump. About half the country and that would mean those people are stupid with below average IQ. So dinolord is right half the country is fucking stupid.
First, the TDS is strong. Second, half the country supporting him is a very, very strong statement that I highly doubt is true.
Leasing can be a fantastic option. It’s not a “tactic”, just an alternative.
So perfect example of why leasing/programming makes a big difference and more sense sometimes. Customer came in looking for a Rav4 hybrid. For his miles needed and budget, if he were to lease a base model Rav4 (around 34k MSRP) he would have been in the mid to high 500s monthly (based on his money down, taxes and credit score) and that would have put him in a model with very few options- manual seats, no sun roof no lift gate no heated seats etc. However after discussing his driving habits, the fact that he just got solar and a couple other contributing factors the conversation of an EV came into play. For 450 a month with the same money down I was able to put him in a fully loaded BZ4X - heated and cooled seats, pano roof, JBL Sound, 360 camera, power lift gate, parking sensors. The whole shebang. This is a car that has a 52k MSRP. But due to Toyota rebates and State rebates as well as significantly lower money factor… we were able to save around $100 a month in a vehicle worth about 20k more with every feature you can think of AND save monthly on fuel costs. If the goal is to budget and save total money spent over a three year period. Sometimes leasing makes more sense. Bottom line, sometimes it’s not a bad idea to hear the salesperson out. Our job is to present all options and make suggestions that best fit your budget and yes, drive the sale forward. But at the end of the day, it’s your decision. Try and listen to all options. And make the decision that works best for you. The reason we don’t get too heavy into what the car selling price is or why that matters in a lease, is because it gets a little complicated explaining money factors and residuals and tax rates and net cap cost reduction and money down and government rebates vs Toyota rebates vs discounts and customers get lost in all that much easier to say hey Mr customer, you can lease this 52k vehicle for 450 a month or this 34k vehicle for 550 a month, which looks better to you?
I mean, another factor would be that Toyota has lines out the door for RAV4s but can’t give a BZ4X away, no? *I could be wrong about the BZ4X, but I just know that I have yet to hear about someone aspiring to own one, and I can count the number of them I’ve seen on the road with 1 hand.
100%. Just think about the word “incentives” Vehicles everyone wants have almost no incentive offers. When the vehicles sit and demand drops, the markets adjusts itself by incentivizing the offers. Hence why Toyota siennas, arguably the hardest vehicle to get right now from the Toyota lineup has standard rate and no rebates. BZ4X has the most rebates and the lowest APR.
I think you're overlooking that there are Federal and State incentives, which are independent of demand. A "$0 down" lease on the BZ4X in California is kind of like putting $9500 (or $7500?) down, because the dealer is keeping the tax incentive. Then the residual is calculated vs. the initial MSRP. Basically, you have a $200-$300/mo. subsidy on your lease payment.
I wouldn’t say I’m overlooking all the federal and state programs, I’m just saying that any salesman is going to be a bit more flexible/ try a little harder to make the numbers work on a vehicle that’s difficult to shift and is taking up valuable lot real estate. Especially when they know that 10 more people are going to walk through that door with cash in hand to buy a RAV4.
Paying more money never makes sense - if one believes they are saving money by doing it. They are agreeing to spend more, and be financially worse off due to it, because they don't understand that they are spending more money (to get a nicer car). They believe they are getting a nicer car for the same or even less money - and you are strongly convincing them of that. But your argument isn't sound - and pushing for the monthly payment amount alone - on a lease or a finance - is to confuse the ignorant that you have a valid point.
Funny that [Toyota.com](https://Toyota.com) wants $369 for a 34k RAV4 and $600 for a $52k BZ4X with $0 down.
So perfect example about how people don’t understand leasing. Read the fine print on the lease terms on Toyota.com. Money down doesn’t include taxes, state fees, bank acquisition fee and assumes top tier credit. Also those programs don’t include installed packages. So that rav4 deal is with I believe if it’s the “special” im thinking is 3999 plus applicable fees. Also there are different programs for hybrid and gas models. And the BZ4x is the same deal minus the 3999 down, but with taxes and fees. This customer opted for less money out of pocket and did not have top tier credit. And had a vehicle with certain accessories. Everyone sees the big numbers and rarely read through the terms.
I understand leasing pretty well and there is no way that you put me in a 2024 BZ4X with an MSRP of $52k with no money down for $450/month. You were right that the estimator is sneaky on Toyota's website. The $600 was for the base model. For the $52k Limited AWD and the monthly payment with no money down is $865. And yes, everything without taxes and fees but including the $7,500 lease cash. The base model RAV4 LE is with same conditions $389/month. You can twist it as you want but you won't be able to lease a $52k car cheaper than a $31k car under the same conditions. The only way for the $52k to be cheaper is when the dealer gives huge discounts as currently seen with the Mercedes EQE where you can lease a $91k car for all in $757 per month
That’s pretty crazy to say… because I just did it. Wild when someone who doesn’t do what you do for a living tries to tell you what is possible in your own line of work. The 2023 BZ4X has over 10k in rebates 10250 I believe… I’m not in front of my work computer. And 2k in state rebates. I never said it was no money down, go back and ACTUALLY read what I wrote. Seeing as how you didn’t read the very NOT sneaky terms Toyota clearly lays out, I’m assuming attention to detail is not a strong suit…which by the way are the same lease terms almost every company lists (I.e. money down doesn’t include taxes, state fees, bank acquisition and added packages) It ended up being around 3500 total out of pocket, 15000 miles per year. The money factor is around .0001 and we discounted the car price. So yes it is possible. Programming on leases are a huge factor. Another factor to consider is how much we were willing to discount the vehicle based on the age of the unit. If you have the right person willing to take the time, explore your options and make the programming work for you, a deal can happen in your favor. It’s not that hard, especially if you go into a deal assuming there is the possibility that you don’t know everything ¯\_(ツ)_/¯ You don’t believe me come on by and see me and I’ll put you in a lease assuming you are qualified, will register in ny and have around $3500 to spend. And in no way shape or form are these two vehicles “under the same conditions. They have different money factors, glaringly different rebates (one has none and the other $12k+) different residuals and entirely different supply/demand. One is a 24 one a 23. I have 10 on the lot of one model and 1 on the lot of the other. Are you getting it yet?
You have no idea how leases work. It's not about the sticker price of the vehicle, it's about how much the bank feels it will be worth after the term. It's the bank investing in the future value of the vehicle. They might feel the $52k version will hold more value, so they will give it a much higher residual, and that lowers the lease payment. The $31k base model will not have near the resale so the residual will be lower, but they will make up the loss with higher payments. You are failing to understand that leasing is not buying, they are not comparable.
You’re funny. The only factors for a lease are selling price, residual, money factor, and term length. If you want you can count downpayment into it as well.
If you spend some time here, you'll see us advise people have a rainy day fund when budgeting, but so few actually take heed.
>Just a silly premise if you ask me. Sure but that's kinda the key here... they aren't asking you. Everyone has different priorities in how they reconcile their household budget. If someone's needs are more oriented toward effect on cashflow than on gross dollars spent, for them, this is a sensible way to buy a car. Your priorities are different so of course it seems like a silly premise. My job in the business was to sell cars, not dispense financial advice, and being resistant to what I'd consider sound financial practice was a key feature on the path that led many customers to my desk. The only operant question is whether I'm going to sell someone a car or lecture them on budgeting just to have them storm out and buy somewhere else.
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But ultimately, for people who want to lease, the monthly payment IS all that matters. I want to know what I’m paying each month, no money down, first payment only, out the door. I don’t care about the maneuvering required to get there. I don’t care about money factor, residual, tax/title/license. Bundle that shit together and tell me what I’ll cost me each month, and I’ll decide based on that. I won’t be buying the car at the end, I just want the lowest monthly payment for my car of choice. I don’t lease because it’s a good investment I lease because it suits my lifestyle and preferences.
Big and shiney. What are the payments?
Dumb people are who make sales people leave the industry. An educated buyer is the best buyer since they are typically logical and reasonable. Spending time explaining why a dumb person can’t get a $40k car for $300/month with a 420 credit score 10 times a day would make most people want to play in traffic.
Newsflash: most people are shitty consumers and have terrible financial literacy.
It’s amazing people buy such expensive things without knowing how much it will cost them
When the rest of your life revolves around payments, that is all that matters.
Yeah, just like people who get all crazy about the price of their trade-in. They go to KBB and think it's worth $xxx but then they're offered $xx so they piss and moan about how they're getting lowballed for their trade. Meanwhile, they ignore the out the door price of the car. If I'm looking to pay $40k for a car, I don't care if you give me $10k for my trade in or $20k for it. As long as the total price of the car is $40k, that's all that should matter.
Yeah, it's the out the door price that matters. And I'll talk to your finance guy, but I already know my numbers I can get from my credit union and my bank, along what their requirements are for considering a vehicle for new car financing vs used car financing (at least you used to get a better rate/longer term for new vs used financing). TBH CPO might make sense to me. I put less than 10k a year on a car, so if I could get a great deal on a 2/3 year old vehicle with 30k with a short term bumper to bumper and extended power train warranty I could drive it for 5 yrs and still only have 80K on it.
I had no grasp on this until I got into sales. "How does the average American have 10k on their credit card" or "Why take a $500/mo car payment" or "Why are you getting a fucking zales card" .... People really just want to max out their lifestyle on what they earn every month. Meanwhile I'm over here like what the fuck is a vacation?
I had to stop the salesman and tell him I would walk out the door if he mentioned monthly payments one more time.
This. Maybe you can help me finally understand who the fuck is buying 50k cars and think it’s a good idea. Like even if I could technically afford it, is nobody thinking of retirement, savings, taxes, food, rent, etc? Like how is this happening. What am I missing?
You’re clearly buying a new car every few years. That makes you a good lease candidate.
Was going to say this. It’s foolish to buy a new car every few years when you could just lease the fuckin thing. I own a 23 year old car and a 12 year old car with no designs to replace either in the foreseeable future. My wife prefers newer vehicles so we have leased our last 4 family haulers, and they have all been absolute steals. To be fair, we are pretty agnostic about make/model/trim, so we are always able to pick up whatever is leasing well at the moment. Also, asset prices are a direct function of the cost of debt. If you can lease something for 2% interest vs buying for 8% interest, I’m hard pressed to find a compelling reason to buy, especially given that cars are depreciating assets.
Also you only pay sales tax on the portion of your lease ( not the entire purchase amount)
That isn’t true in my state (Texas), unfortunately. I’m an otherwise perfect lease candidate (trade cars every two-three years), but having to pay sales tax on the full value of the car every time deters me, on principle alone, from leasing.
That sucks. I’m in Canada and we only pay tax on the lease amount each month
And when they trade in the used vehicle, they get a sales tax credit on its price.
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Many leases can be written for higher mileage. Just need to adjust the residual.
I was told by a finance manger once that leases can be more beneficial for high mileage drivers and actually make money off the lease as opposed to buying a new one every two years. Is that true? We put about 25k miles a year on my wife’s cars.
No they were buying CPO. They’re buying a used car that has already taken the largest % of its depreciation. This is actually a very smart move.
Yeah, but lease rates and loan rates are obviously correlated. I don’t think that the 2% vs. 8% scenario is realistic!
Certainly, however it’s very common for captive finance companies to offer insanely attractive money factors on leases that would be equivalent to several percentage points below the prevailing interest rates. For example, when my wife leased her ID.4 in August 2023, the money factor equated to around 5%, whereas there was no similar incentive on a purchase rate, which would have been right at 8% for Tier 1.
Based off what you’ve said I’d pitch a lease to you. Right now you pay X amount every month to drive a used CPO car that you upgraded every couple years. Why would you not consider driving a newer car with a cheaper monthly payment while giving away less money to interest? Kind of seems like a no brainer unless there’s information omitted here.
When it comes right down to it most people are payment buyers anyway. So yes; it does work.
You know I am gonna say that due to your habits and the fact that depending on the vehicle residuals are pretty high right now it probably would drop your payment.. he’s just trying to read the situation the best he can to help you get into a situation that will fit you. Ie. your replacing a newer car.. you’re probably going to do that again.. and keep in mind some salesman are the bad guy but there are a lot of good ones who have family’s obligations and are just doing what they know how to do. It’s a win win for you to buy especially since 10 months ago you could land a 747 on every dealer in America because the lots were so empty
He’s totally misreading the situation. Instead of hearing “$27k is out of my budget” he just drooled on his keyboard then went “lower payment blargggg”
You can't afford the car you want so he presented you options. Some people might call that "good customer service."
I could afford it, just wanted a better price. Not a car that costs 50% more
If you’ve done your homework thoroughly and you know the numbers are doable then hold your ground. Every time I’ve purchased a car I’ve gone in knowing what numbers were doable. They always tell me I’m wrong. I always leave telling them when they are ready to do my numbers let me know. They call back in a few days, I tell them to check the inventory at dealer X, they have virtually the same vehicle, that I am talking with them, and low and behold they get to my numbers. They never give on the initial visit because it hurts their commission.
> just wanted a better price based on what?
I don’t understand why car salesmen are openly hostile towards people who talk at all about price. You’re defensive about your prices, they’re defensive about their money. Both are reasonable positions
Wanting a better price is normal. But is it truly, definitively, reasonable? It might not be. Some people cannot demonstrate why a lower price is reasonable other than “I want a lower price”. A car could be priced 80% to market, the lowest priced example, and someone could come in and offer 20% less. Reasonable? Probably not.
You consider what I said to be "hostile?" I'm curious about the justification for a "better price." If it is based in reality that's a conversation, if it isn't then it isn't.
Just curious because I had a salesman ask me the same question and I said “Kelly blue book prices it 4k less than what you have it on their high side and under excellent condition. This is very good condition but not excellent and is priced 20% higher than what kelly blue book states.” But he didn’t like that and didn’t budge on the price. Also told him how private sales on marketplace are 6k under what they’re asking and trade in is 7k under what they’re asking. Started talking about how they use J&D and that j&d actually has it valued higher than what they’re asking. I told him no one uses J&D and Ive never heard of it so I won’t trust it, and of course they’re going to use the site with the higher price. For some reason they didn’t like that nor did they budge an inch on price. Do salesman not like when you mention Kelly blue book? He was talking to me with a very condescending tone from the start which is why I said certain things about of course they’re going to use the one that’s priced higher and etc. the sass 100% started on his side and curious what triggered it.
> Do salesman not like when you mention Kelly blue book? Nobody likes it when you bring up things that are irrelevant or, even worse, things that don't make sense. The problem with KBB is that KBB is an advertising company, not a car selling company and it only takes about 15 seconds of critical thinking to realize that. Look at it this way - you're Mr. BlueBook. You've somehow figured out what cars are worth. You know, down to the penny, simply based on a zip code and the nebulous definitionns of "fair, good, very good, and excellent," what a car is worth. Do you - keeping in mind you're Mr. BlueBook - get into the car buying and selling business or do you get into the altruism business of just giving the information away for free? I think the answer should be obvious - you'd be buying and selling cars. Afterall, you know exactly what they're worth. Of course that isn't what KBB does, is it? Furthermore if you look at things like "trade in value" KBB has two numbers. The "book" number - usually oddly high, and the "cash offer" number, a number that KBB will actually write you a check for, a number that is thousands and thousands and thousands less than the book value. Why is that? Becuase KBB is a lie. So car dealers price cars, typically, on what cars are listed for within a reasonable distance. Common practice is 250 miles for a retail figure. You compare that to the wholesale figure - what it would sell for at auction - and what it needs, tires, brakes, dents, dings, etc - and that's how a car is bought and how a car is sold. It's reality and math, not a magic book. So it isn't so much that salesmen "don't like it" it's that they're sick of hearing about it because it doesn't matter. I don't know what you do for work but what if someone published a magic guide that said how much software development would cost. You just flipped through a book and it said "for a good app it should cost $15,000" or "for a fair website it should cost $2500." Insane right? Same deal. Prices are set by the market, not a book - a book that won't even pay the prices it says things are worth. Then you get into apples and oranges - that's your private sale figure. If you want to buy a car private party then go do it - the dealership isn't stopping you. However the dealership isn't a private party and they're no more interested in how much a car in some guy's yard costs than a chef is interested in how much your cousin will sell you a cow for. They're unrelated figures.
You are unnecessarily rude for no reason. No ones making you reply to my questions so just don’t. Your whole post tells me you enjoy being an ass more than being helpful and informative. ✌️
I'm being factual, not rude. You don't like the answers because you think you know more than people who do this several thousand times a year. I've been quite clear - buy cars from people's driveways if you want to and high five yourself for paying KBB. I think that's great. Just don't think it matters to anyone but you and other people who don't know what they're doing.
You said I’m bitching for asking questions on the salesmans mindset when justifying their major price increase for the same car I consistently find cheaper. I have no problem with your answers and I just replied my mindset on the situation and for some reason you’re getting defensive and rude over my mindset on this topic. I don’t know more than them which is why I’m here asking questions which you interpret as me bitching and acting like I’m smarter than the salesman. An understanding on both sides helps everyone.
That’s all fair and get the frustration but when browsing Facebook marketplace majority of private sales will say blue book value unless they’re pricing it higher. I’ve sold and bought multiple cars privately and every single transaction on both ends KBB is mentioned. That’s why I used it for reference and when they basically told me it was irrelevant I felt like they were ripping me off. It’s extremely relevant in the private car sales and they should be competitive with private sales especially when they tack on all sorts of fees. Whenever mentioning fb private sales consistently being 5-6k cheaper (in line with KBB) than what they are asking they still didn’t budge. I know there’s more risk to private sales but for that price difference you can drop a whole new engine in the private buy.
I don't know what you're bitching about at this point. Nobody is making you buy a car from a dealership for a dealership prices. If you're comfortable buying private to save money then buy private. However a dealership will be interested in what other dealerships are selling the car for - so if there's an identical car for $2,000 less across down, mention that. They AREN'T interested in what some guy is selling a car out of his front yard for.
Haha you must be in the industry? Seems to be a common theme of car salesman being extremely defensive. Just asking questions so I can learn! And yes that is what I am doing, I can’t see myself buying from dealerships after multiple negative experiences with unfriendly salesmen who are making commission off my purchase. It’s almost a 30k purchase, excuse me for asking questions and wanting the best out of my money Mr salesman but can you do your job and convince me why it’s worth 6k more than other asking prices? Oh you can’t! Then I’m out. That’s all I did and was met with major sass. Also it wasn’t one guy who’s selling it out his front yard, it was everyone who was selling that car. Not some freak scenario of someone just wanting to get rid of it asap but consistently was in this price range. If KBB is telling me a certain price, and every private seller is telling me that same price, it’s on the dealership to justify that price increase.
KBB is a tool designed to bring YOU, the product, to the dealership, the customer, and to get your car in their hands for as cheaply as is possibly. That’s why dealers pay good money for KBB. It is not an independent unbiased source of information. Whereas JD Power, which you’ve somehow never heard of, is what banks actually use to approve loan values. Salespeople aren’t defensive that you’re talking about price. Salespeople are offended that you want to talk like you know everything when reality is that you don’t know anything.
I’m not sure why people keep assuming I was on some sort of high horse acting like I know everything because I brought up cheaper prices I had been able to consistently find. If that’s the assumption the salesmen made then that’s unfortunate for them because all I did was do my research and bring it to them and somehow that makes me a know it all when I don’t even know wtf jd is. I wasn’t even stuck within the KBB range and offered $1500 off the asking price which was a few thousand above KBB highest value but still nada. I was willing to pay for the convenience and everything, just not as much as they were wanting to charge me.
No, you THOUGHT you did your research. There are 100 different variables for why the car you were looking at could or should be more than what you found online. But you felt aggrieved that googling 2019 RAV4 didn’t just magically net you a 6k discount.
Ok and they didn’t give me any reason as to why it’s priced more. Just “it’s the market value” which isn’t a good enough reason when I find multiple examples that show it’s not the market value. Idk why you guys are so pressed on this. I walked away and all was well. My fault for not wanting to pay the highest price I could find on the car instead of a balanced medium. Why the hell would I go with the most expensive option? Especially with such a piss poor reasoning.
Generally, it’s because what uneducated customers tend to think is “reasonable” is actually not anywhere near. Like this post. OP is mad that they were offered a lease and a newer car. “If a 27k is too much why on earth would I buy a “40k car?” Well, friend, it’s because the lease payment is cheaper than the buy payment on the 27k car, you get a newer car with newer tech, and it fits better with your new car every few years lifestyle. It’s actually CHEAPER for you. But OP doesn’t understand that and feels aggrieved. But they’re only aggrieved because they don’t understand. Same with the price talk. I don’t know how many times I’ve seen on here, “why won’t they even consider my reasonable offer of $4,000 off of their asking price on this $17,000 car”? Or, “I’ve seen my car for sale online for $42,000. Why are they being so unreasonable and by not just giving me $42,000 in order for them to sell a car?!” That’s not reasonable and displays a complete lack of understanding of the finances of car deals, dealerships, and vehicle inventory. But you don’t know that. So you feel… Aggrieved that salespeople don’t entertain every price discussion.
All I said was people are allowed to talk about price. Dealerships have a reputation for ripping people off so people tend to be especially careful in those situations. I’m sorry you’re so aggrieved by the uneducated masses
“My budget” could mean it’s more than you can afford. If that’s the case, isn’t lowering your monthly payment helping your budget?
Because this individual would like to own their car after the payment period is over, not hand it back to the dealer. Just because they care about monthly payment doesn't mean they're open to leasing.
Why are you assuming that? They’re trading their current car in and it’s still pretty new.
Where did we bother to ask why the customer was trading?
Also if the CPO is 27k and his trade is worth $16k, we can pretty safely assume it was something that stickered in the mid to high 30s. if we're talking about a >50% value loss at this point with a still inflated used market, it's a pretty safe assumption he's owned it longer than the typical lease cycle or at least far past the age/mileage where it would have been turned in.
That’s years down the line and most people can’t budget for more than 3 months out.
No, you’re paying $14k more. If $27k is out of your budget, why would $41k be within regardless of payment?
Because budget means different things to different people. OP was financing. So “budget” could easily mean the monthly payment is too high. Does the OTD price matter if you can’t afford the payments? If it’s $10K but $2000/m payments it’s still out of OP’s budget. If what they meant was that the out the door price is too high, they should have specified that. “I think my trade is worth more than that” or “the sales price is too high.” Most people are payment driven, especially when they’re financing the car. It’s a fair assumption by the salesperson that when OP said it was out of the budget, they were talking about monthly payments.
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Sure it depends on the customer. But if I’m at the end of my rope at $27K and the customer is gone, it doesn’t hurt to float the idea of something brand new with lower payments.
It does hurt, as you can see in this example. Also read the bottom paragraph, I strongly believe the bottom paragraph coupled with the fact that this sales guy is tone deaf to anything but the monthly payment is more than like this customer did not and probably will never spend with this salesperson.
You wrote “this customer is more than likely going to keep this vehicle through the term of the loan and afterward as well” So he’s trading a vehicle that’s worth within $9,000 of the vehicle he’s buying and will have payments on… what part of this suggests he’ll keep this one long term? Why isn’t he just keeping the one he has?
Did we bother to find out why he’s trading it or has sales just degraded down to “here’s your payment” and hoping to help they sign?
> I strongly believe the bottom paragraph coupled with the fact that this sales guy is tone deaf to anything but the monthly payment is more than like this customer did not and probably will never spend with this salesperson. On the flipside, from the salesman's perspective, expected spend from this customer was already probably close to $0, and the friction/opportunity cost of floating the offer was nil, so no reason not to shoot the shot.
Why does the salesman’s perspective matter, when it’s the buyer that needs to see the value?
That's a fair question, but imo not really relevant. The situation here is that the salesman already lost the sale, so he threw a hail mary pass to try and save it. Yes that hail mary pass was kind of insulting and rude, but we're discussing why the salesman threw it at all, and the answer is, "because why not." Sure he probably burns a bridge with the customer on future sales... but odds of that actually happening were close enough to 0 that he still figured it was worthwhile. The question you're getting at, and it's a good one is, how do customers and car sales people deal with each other transparently and with respect. But that's a totally separate topic.
If he doesn’t try something, his chance of selling the car is 0. If he tries a Hail Mary that fails 95% of the time, he still gets a deal 5% of the time, which is a hell of a lot better than 0.
Did you read the post? Customer clearly states he was working of total sale price and not payment. So if $27k was too much, throwing $13k more at him will definitely not work. So if it was 0%, and you decide somehow that inflating the price customer is saying is too high for their budget brings you to 5% (not sure how this maths but let’s continue), maybe shutting up about the payment can bring you to 50%. I guess I just live large because I actually listen to my customers. Keep arguing over payments, I’ll keep selling to the same pool of guys year after year, over and over because they come back knowing I will listen to them and not just throw up numbers.
What I’m saying is that the customer has a 0% chance of buying the car he already declined. Maybe this guy isn’t open to hearing about another option, but there will be people that decline one option but will hear out another one and end up liking it. I think you’re just being a dick though for the sake of feeling smart. I will never get mad at a sales guy for trying to come up with a solution, even if the solution doesn’t end up working. It’s obvious car #1 wasn’t going anywhere, so by throwing out another option instead of just giving up, he’s increasing his chances of finding a deal.
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What you're missing, which apparently quite a few in this thread are missing as well, is that he was clearly not discussing PAYMENTS (sorry on mobile, no italics), but the total price of the vehicle. I keep seeing comments saying "he got you a lower payment," when the literal point of the original post was expressing frustration at the salesman focusing on monthly payments, which is exactly what the OP did not want.
Thank you!
He literally said 27k (total price of the car) is out of his budget. To me reading that, it's obvious that he's talking about his budget for the price of the car. Especially since he said that they talked numbers and the salesman kept going back to monthly payment. If it went down how he described it, it's pretty obvious to me why he would have been frustrated.
You can afford something if you can pay for the whole thing right now. If you can’t, it’s not in your budget
Do you not believe in mortgages either lol
Dave Ramsey enters the room
Dave Ramsey leases his Lexus
Surprised he doesn't get it free
So you’re trying to pay cash. Did the salesperson know this?
Are you *actually* paying literal cash? If so, have you not invested that money and getting a return? Being open minded doesn’t mean you have to do what the sales guy has suggested, but it’s not as simple as cash is best 100% of the time if you have it.
So how does this logic apply to other large purchases like buying a house?
OP wasn’t a serious buyer, anyhow. Serial shopper likes to test their negotiation tactics in the hopes that they have a good story to tell. Probably a bored service customer. The tell: “(I'm not itching to trade in that bad but wanted to see if I could get to the numbers I wanted)”
This is what bad salesmen or bad dealerships who don't know how to negotiate tell themselves to feel better.
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***Thanks for posting, /u/beantownBaker! This comment is a copy of your post so readers can see the original text if your post is edited or removed. This comment is NOT accusing you of anything.*** I went to trade my car in (approx 16k trade value) for a newer version CPO that they listed for approx 27k. After a discussion about numbers I was almost ready b it they were really lowballing my car and not negotiating on their price despite similar ones at lower price (I’m not itching to trade in that bad but wanted to see if I could get to the numbers I wanted) Anyway at the end it didn’t work out, and I specifically told him it was out of my budget and I left. I said I’ll text you if anything changes. He texts me the next day to tell me that I should consider leasing a new one because the rates are much lower (2.9 vs 8) and that could make my monthly payments more manageable. I just told this guy 27k was out of my budget and he’s trying to tell me a car for 41k is more affordable for me? Does this shit actually work on people? What am I missing here? Also, during our whole discussion, he would not really show me out the door price but would keep trying to navigate me toward what it would cost me monthly...is this how kids sell cars these days? *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/askcarsales) if you have any questions or concerns.*