How much do you want your payments to be?

i sell cars---most cars come down off sticker, but a mustang gt probably wont. the dealer can hold points on your loan. if you have a 650 credit score, you qualify for a certain rate at the bank. the dealer can "hold" points on you for their profit. if you qualify for 6% based on your credit score and they can get you to agree with 8% during the negotations, then they profit on you from the bank because they got you to agree to a higher intrest rate. ask the desk manager to see the finance book for the bank that you will be doing business with and see for yourself what rate you qualify for. they might not let you see it, but it is worth a shot. you dont want to overpay on intrest for no reason. let me know if you need more information, as i realize i deal with this everyday and most others do not.....i might not be explaining it well enough.

bigcat said:

i sell cars---most cars come down off sticker, but a mustang gt probably wont. the dealer can hold points on your loan. if you have a 650 credit score, you qualify for a certain rate at the bank. the dealer can "hold" points on you for their profit. if you qualify for 6% based on your credit score and they can get you to agree with 8% during the negotations, then they profit on you from the bank because they got you to agree to a higher intrest rate. ask the desk manager to see the finance book for the bank that you will be doing business with and see for yourself what rate you qualify for. they might not let you see it, but it is worth a shot. you dont want to overpay on intrest for no reason. let me know if you need more information, as i realize i deal with this everyday and most others do not.....i might not be explaining it well enough.

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Are you familiar with Ford Motor Credit specifically? If so, can you list current rates their giving by credit score range?

If so, I really appreciate it, so thanks in advance - if not, no problem.

i will check into it for you in the morning

You work out the price first. Then shop the loan around, then you tell the dealers finance manager. If he wants you to finance through the dealership he's got to come in close to your lowest pre approved loan amount.

You can also use capital one blank checks as a chip against the finance manager.

Vandil said:

You work out the price first. Then shop the loan around, then you tell the dealers finance manager. If he wants you to finance through the dealership he's got to come in close to your lowest pre approved loan amount.

You can also use capital one blank checks as a chip against the finance manager.

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Well, I've already worked out my price, but part of the bargain was that I go through FMC. The whole deal is that I pay $500 over dealer's invoice and have to finance through FMC. But it looks like FMC will give me a better rate than Capitol One anyway, so I don't mind. I would like to have an idea of what I should be getting from FMC just so the dealer can't jack it up 2% or something. Just want to be an educated consumer, and think the savings on the price I worked out will far outweigh any difference in interest rates I get between FMC and a private bank, in any case.

bigcat said:

i will check into it for you in the morning

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Thanks. Do you also happen to know - or can you check - which credit agency FMC bases its decision on? (i.e. Experian, Equifax, or Trans Union)

Z GT: you can research on the internet before you shop, and arm yourself with info about what your trade is worth, what your credit score is, and what price you should pay.

But when you get in the pit - you're all alone against a team of people who know every game... every angle to trip you up, make you lose track of things, get impatient, etc. Next thing you know you're banging your head on the bar asking how it happened... how did you end up getting screwed when you had done all that research...

THAT'S why you shouldn't shop payment. Just don't let those guys get started at the game of confusing you. They are better at the game than you are - they will BEAT you at the game.

Good luck.

Listen for this the next time you're in the dealership:

Salesman: What do you want your payment to be?
You: $474.
Salesman: Up to?
You: Uh, $500.

Listen for the "Up to?" part. Most people, will automatically raise what their intended minimum was. Now you can just start laughing when you here them say "up to".

Regards

I never tell the salesman what I want to pay per month until a price has been set and they have given me an interest rate and payment amount. The numbers can be played with. A monthly payment means nothing in relation to the price I am willing to pay for the car.

You asked: "Wouldn't you be willing to pay more for the car if the interest rate was lower to end up with the same payment. Likewise, wouldn't you be willing to pay a higher APR if the sales price was lowered (or your trade-in allowance was increased to get you the same payment?" The answer is ABSOLUTELY NOT. If the sticker is 27K and I qualify for 4%, I'm not going to take 4.5% if the price drops a bit. People always seem to relate price, interest, and trade. They are all independent negotiations.

I watched a friend pay sticker on an SUV. The dealer offered 2,000 for his trade in (worth about 3500)He actually told the dealer, I'll pay sticker if you give me 3,000 for the trade. I want $1000 off sticker if you give me the 2,000. Now what good is that. He got suckered. I tried explaining it to him but he was just to happy to be buying a car.

I don't get it, people in a store will drive across town to another store to save 5 bucks on a pair of jeans, but then let dealerships take advantage of them on a car sale.

Just remember, negotiate each transaction seperately.

There are somtimes cash back incentives thru Ford to go with FMCredit. Shopping the loan may raise your payment price.

ILikeBond said:

Well, I've already worked out my price, but part of the bargain was that I go through FMC. The whole deal is that I pay $500 over dealer's invoice and have to finance through FMC. But it looks like FMC will give me a better rate than Capitol One anyway, so I don't mind. I would like to have an idea of what I should be getting from FMC just so the dealer can't jack it up 2% or something. Just want to be an educated consumer, and think the savings on the price I worked out will far outweigh any difference in interest rates I get between FMC and a private bank, in any case.

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It's not as if the cap one blank checks come with an APR printed on them. The finance manager only knows what you qualify for through his institutions. If you qualify for 5% and the cap one is 8% you tell the guy oh this cap one check is at 5.5%. It's a chip you never intend on using other than as leverage. The finance manager simply sees that check as his commision going good bye and he's going to do what ever he can do to keep you financing through him. Even if it means he offers you 5.4% instead of the original 7% he'd intended on. The point of shopping the loan around is to figure out what you qualify for because cap one is ALWAYS in my experience higher than CU's, FMC, bank's and you cannot trust dealer finance managers not to lie.

I agreed to finance through the dealer as well to get my 300 under invoice GT. That did not stop me from walking in there day of pick up with a blank check and a CU finance offer. Leveraging the finance manger into offering me a very competative rate his very first offer.

" How much do you want your payments to be?"

I want my payments to be $0.00 / month. Unfortunately, they are not.

I want mine @ $0 , which they are =)

Whenever a salesperson asks me, "How much do you want your payments to be?" I always answer "As low as possible." I don't give them any more information then I have to.

What amazes me about dealerships is when they ask you how much you owe on your trade-in. I always tell them that is none of their business right now and I want to know what THEY will give me for it. For some strange reason, this always, always puzzles them. They say "it doesn't matter to us how much you owe, it won't change the amount that we offer you". I end up laughing at them and saying yea right. I tell them that it makes no difference how much I owe on my vehicle, all that matters is what I am willing to take for it.

As another poster said, negotiate each deal separately. Negotiate a price on the car, negotiate a price in the trade in (if applicable), then sit with the finance office and negotiate a interest rate with them. Dealers love to lump everything into "what do you want your payments to be". It makes it easier for them to stick it to you. Get bottom dollar on the car, top dollar on the trade, and get at least 2 different financing options if possible.

On a side note I actually went to one of the most honest dealers that I have ever known a couple of weeks ago. When valuing my trade in, the manager actually brought me the kelley blue book trade in value printed off the internet to look at (it was 11K). Before I even said a single thing about it, he said that he could get it up to 12K, I said that I wasn't taking any less than 12.5K and he said ok. It was simply amazing. I didn't end up buying the new truck, but I know exactly where I am going when I am in the market again.

The point is you negotiate the price of the car and then worry about what you want your payments to be. I don't even tell the salesperson anything about how I'm paying for the car, until we've settled on a price.

Some dealers use a method called four / square. They will draw a big "plus" sign in the middle of a sheet of paper. They will start with payments. If you are a payment guy, they will do what ever it takes to get to the payment amount you have to have. they will write down the number in the uper right square formed by the plus sign. Next they go to trade in. What do have to have for your car? They do care what you owe, because most people are upside down, owing more than the wholesale value of the car. This number goes in the next square top right. Next comes interest rate. What number do you have to have? They will write the number in the lower left sqare. And finally it's the price. Where do we need to be? This number goes into the final square. By now the salesman knows if he can hit all of your numbers, he has a deal. Probably good for both of you, and if he can't hit them all, he should also know which one is the most important to you, and which one is least important.

Most people will say it's the price, but really it's the payment, and getting out from under the trade.

Car sales is really about selling cars. If you don't make the sale you make no money. The job of the salesman really isn't to gouge you, it's to close to the deal. They won't leave money on the table, and they won't lose money on the sale.

If you want to simplify the process, do your financing else where. Credit Unions are hard to beat. Don't have a trade in. If you are upside down, you really have no business in buying another car anyway. Negotiate strictly on price, out the door.

From experience as an old guy: Buy cars with money you have saved, not borrowed. You will earn interest instead of paying it, you will buy only the insurance that you feel is appropriate, and you will take better care of the car becuse you won't feel like it belongs to the bank. And you will always get the best price... This is a hard practice to start, but once you get there on your first car, it is easy to keep rolling. You just make the payments to yourself.

You are ignoring the power of car lust.

Vandil-actually the APR is on a Cap One blank check-I'm looking at one that I plan to use.

IMO the job of the saleman is to baffle you w/ bs. That way he can ignore all of the objective #'s that really matter. That's why they like to talk payment. There are many more ways to manipulate payment than the bottom line sales price. Once you establish that you are there to talk price only they treat you w/ a lot more respect. Then it is also easier to resist the Lojack & pinstripes & the ext warranty, etc. they beg you to buy.

I'm out of that game now but I used to love it (I'm a much nicer guy now ), best sale ever was a payment buyer that we flipped from an ad car sale(stripped Taurus, $50 commission) into a three year lease. He got his payment, I got my $2K for 2 hours work.... Like I said I'm a much nicer person now .

I remember asking a guy's buddy (guy gave him a ride to the dealership to pick up his new car) if he would buy him a soda a day so he could afford the payment that was $20 a month out of reach . BTW his buddy said, "ahhh OK".